To entrench the relevance of the cryptocurrency payment industry in the mainstream financial services space, cryptocurrencies, with Bitcoin (BTC) and Bitcoin Cash (BCH) at the forefront, need to add significant value and provide a service that far exceeds that offered by contemporary fiat currency.

Decentralized, non-censorable currencies that have no inflationary effect and enable low transaction fees all offer improvements over fiat currency. However, if the customer experience (CX) around using crypto is not orders of magnitude better, adoption will not scale.

(Read more about our views on the importance of instant tx enablement here)

While bank, cross-border or credit wire transfer services are not yet instant, often taking up to a few days or weeks to clear, the demand for instant payment services is on the rise. A growing number of payment processing applications and services are emerging that specifically target this pain point by enabling instant transactions (tx) with fiat currency, and this payment paradigm is therefore rapidly becoming the norm.

This has amplified the urgency and necessity for the enablement of instant crypto tx. These capabilities must span the spectrum of financial transactions if cryptocurrencies hope to reach the network effect and prompt greater adoption.

In this regard, the ability to enable instant payments and deposits are non-negotiables, because anything less is more of the same when compared to fiat options. Thankfully, this is functionality that the GAP600 solution already enables.

0.1% of transactions fail to reach the blockchain

At present, the norm is that merchants, crypto gaming providers, and crypto exchanges generally wait to receive multiple confirmations before completing a transaction to reduce the risk of fraud and double spend.

From our data, we’ve seen that only a small percentage of transactions – around 0.1% – published on the network fail to reach the blockchain. While this is an extremely low statistic, we have no way of knowing how much of those failed transactions are malicious or simply testing. Since most merchants or service providers that accept BTC payments don’t offer 0-conf services, there is no incentive for attackers to try and double spend.

Tx acceptance times are unacceptable

However, by design, the average time between BTC block publications is 10 minutes. Our own data reflects that the median time for a typical BTC tx to be accepted in a block was 8 minutes. Real transaction acceptance times can often take much longer, though – up to 16 minutes on average based on historical data. In extreme cases, tx acceptance can take days, or even weeks.

While BCH is more efficient – the average time for transaction inclusion in a block is around 10 minutes – this is still unacceptable in the modern context, where consumers demand instant tx for an enhanced experience, and merchants and service providers require instant payment enablement to bolster cash flow and liquidity.

Of course, as more businesses look to implement instant payments, mitigating fraud becomes a key consideration. In fact, we have seen on our platform that as soon as a merchant starts to accept zero-confirmed (0-conf) BTC transactions, they experience a rise in double spend attempts.