Bitcoin security firm BitGo has launched a new service that aims to allow clients to accept bitcoin transactions prior to their official confirmation on the blockchain.
Called BitGo Instant, the offering aims to allow users to accept transactions more quickly, while guarding against the possibility that funds could be ‘double spent’ or otherwise altered before they settle against the bitcoin ledger.
At launch, BitGo said major exchanges including Bitstamp, Bitfinex and Kraken had already signed on as users of the service. Other notable partners include altcoin trading service ShapeShift and the e-commerce app Fold.
In interview, BitGo CTO Ben Davenport said the service will help bitcoin companies better offer the user experience their consumers expect from the digital currency, which has been widely advertised as fast and free, yet can take 10 minutes and sometimes much more to be confirmed by the network.
Davenport further framed the service as one that would appeal to active bitcoin traders, who he said could take advantage of the ability to move funds more quickly.
Davenport told CoinDesk:
“This is about the speed, it doesn’t change the security. We’re trying to work around the shortcomings in bitcoin to provide finality in settlement, a process that today can take as long as 120 minutes.”
The service, BitGo noted, follows notable instances in which industry startups like Coinbase and ShapeShift have been the victims of double-spending. Davenport described the offering as one that would allow these firms to approve transactions quickly while receiving receiving a type of assurance should payments go awry.
“When someone wants to send an instant transaction, we do a certain amount of risk checks. We create a guarantee that is cryptographically signed by us that rides along with the transaction,” Davenport said, adding:
“Recipients who fail to receive funds can file a claim and we’ll back it fully.”
When a user executes a BitGo Instant transaction, BitGo co-signs the transaction with one of three of the keys in its multi-signature wallet. A third key is held by a key recovery service.
Davenport noted, however, the service is built to work without BitGo wallets, adding that “anyone can join to accept”.
Under the service terms, users will not pay to receive money, though senders pay a 0.1% fee on transactions above 1 BTC.
Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in BitGo.
Transaction image via Shutterstock