Bitcoin security company BitGo has announced a new feature – BitGo Instant which promises instant settlement for bitcoin transactions. The service also guarantees recipients a compensation via a claim fulfilled by BitGo, if the transaction isn’t confirmed on the blockchain.
In an announcement via a press release today, BitGo has launched BitGo Instant, a service that allows users to transfer bitcoin for real-time settlement, before the transaction is confirmed on the blockchain.
The service is positioned to users who seek instant bitcoin transactions while securing the funds against the possibility of the sender spending the money elsewhere before transaction confirmation via the blockchain.
It is unsafe to rely on these transactions because it is possible for the sender to spend the money elsewhere before the transaction is confirmed. For this reason, most Bitcoin businesses require multiple confirmations to credit a customer’s account.
Unfortunately, due to the slow and unpredictable rate of block creation by miners, this results in customers experiencing wait times on deposits ranging from 30 minutes to multiple hours.
BitGo achieves instant settlement transactions using the crypto keys among participating users’ wallets.
The customer holds a key, BitGo holds one and another is held by a third-party Key Recovery Service (KRS). This service informs BitGo when a user is looking to use the KRS key. Fundamentally, BitGo will be informed of any attempt by the sender to spend money in multiple places at the same time with multiple keys and the algorithm prevents the second transaction.
Furthermore, BitGo guarantees its technology by guaranteeing all transactions. If, for any reason, the transaction isn’t confirmed on the blockchain and the user or company loses money, a filed claim will result in a full compensation by BitGo, the company adds.
With the launch, BitGo also revealed a list of major exchanges who have already signed up for the instant transfer service. They include Bitfinex, Bitstamp, Kraken and Unocoin, along with apps such as Fold.
The service also works away from BitGo’s wallet with its open-access API that enables businesses to make use of BitGo Instant.
The service is free for all transactions under 1 bitcoin. For transactions above 1 BTC, senders will have to pay a 0.1% fee.
Images from Shutterstock and Bitgo.
Last modified (UTC): January 19, 2016 15:00