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Zero Confirmation/Unconfirmed Transaction

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A zero confirmation or unconfirmed transaction is defined as an exchange that has not yet been recorded or verified on the blockchain

What Is a Zero Confirmation or Unconfirmed Transaction ?

A zero confirmation or unconfirmed transaction is defined as an exchange that has not yet been recorded or verified on the blockchain. To understand it in context, it’s worth recalling a few of the basic principles of blockchain technology.
A blockchain is a distributed ledger composed of an ongoing sequence of blocks. The blockchain is maintained by a network of distributed nodes that arrive at a consensus about the integrity of the data recorded on this common ledger. Any bad actors that intend to manipulate the blockchain would have to control over at least 51% of the computing power on the entire network in order to sabotage its integrity. 

After sending data to the blockchain, users must wait for one of the modes that maintain the network to register and then verify the data before adding it to a block. As the blocks are connected to one another, each verified block confirms all prior blocks as well. 

A zero confirmation transaction refers to a transaction that has not yet been confirmed on the blockchain and, as such, is not yet part of the blockchain.

You can understand this as a transaction that has already been initiated but has not yet been confirmed by the network’s miners. Only the actor initiating the transaction is aware of it, and until a block is mined and the transaction has been confirmed by other network participants, the transaction is said to have zero confirmation. 

Keep in mind that the confirmation time of a transaction will vary depending on the volume of transactions on a given network. To use Bitcoin as an example, a Bitcoin (BTC) transaction that has been relayed to the nodes in the Bitcoin network but has not yet been incorporated into a block is referred to as a zero confirmation transaction. 

A zero confirmation transaction can be noticeable in certain scenarios, as with a seller who releases their goods before a Bitcoin payment has been confirmed by the network, with the assumption that the confirmation will, over time, actually end up being confirmed. Typically, at least six confirmations from the network are required for it to be fairly certain that the transaction has been verified.