Soft Confirmation

Centralized exchanges (CEXs) use soft confirmations to credit user deposits almost instantly. By monitoring the mempool and initial block inclusion, they can update account balances and allow trading before the transaction is deeply confirmed, drastically reducing wait times from ~10 minutes to seconds. This is a critical feature for user experience, though final settlement still requires full confirmation.

NFT marketplaces leverage soft confirmations to provide near-instant purchase feedback. When a user submits a buy transaction, the marketplace UI can immediately:

• Display a "pending purchase" state.
• Temporarily hide the NFT from other buyers.
• Update the user's inventory preview. This prevents front-running and creates a seamless experience, with the final transfer occurring upon block finalization.

In decentralized finance, protocols use soft confirmations for faster position updates. For example, when a user submits a transaction to add liquidity or adjust a leveraged position on a perpetual futures DEX, the interface can immediately reflect the estimated new position and PnL. This allows for quicker decision-making in volatile markets, while the underlying smart contract execution is secured by the eventual hard confirmation.

Blockchain-based games and virtual worlds use soft confirmations to maintain real-time interactivity. Actions like item trades, in-game purchases, or character movements can be reflected in the game state as soon as the transaction is seen in the mempool. This prevents gameplay from being bottlenecked by block times, creating a fluid experience. The game's backend reconciles these provisional states once the transaction is finalized on-chain.

Merchants accepting crypto payments can use soft confirmation services to approve transactions at the point of sale. A payment processor monitors for a valid, well-funded transaction hitting the mempool and provides a "payment received" signal to the merchant within 1-2 seconds. This is analogous to a credit card authorization, enabling checkout flows for physical goods and services without requiring customers to wait for block confirmations.

While powerful, soft confirmation carries inherent reorg risk and potential for double-spend attacks if not implemented carefully. Key considerations for applications include:

• Setting appropriate confidence thresholds based on transaction value.
• Monitoring chain reorganization depth.
• Using fee estimation to gauge miner extractable value (MEV) and replacement risks.
• Implementing fallback logic to revert provisional states if a transaction is ultimately dropped.

A soft confirmation is a preliminary, probabilistic indication that a transaction is likely to be included in the canonical chain, but it is not yet protected by the network's full consensus finality. The primary risk is that a soft-confirmed transaction can still be reorganized out of the chain if a competing block is found, leading to potential double-spends or failed state changes.

The security of a soft confirmation depends entirely on the probability of a chain reorganization. This probability is a function of:

• Network Hashrate/Power: A higher hashrate makes reorgs less likely.
• Confirmation Depth: Each subsequent block reduces reorg odds exponentially.
• Network Latency: High propagation delays increase the chance of competing blocks. A transaction with 1 soft confirmation is far more vulnerable than one with 6 confirmations.

Soft confirmations are deliberately used to enable near-instant user experiences where absolute finality can be temporarily sacrificed. Common applications include:

• Exchange Deposits: Crediting user balances for fast trading.
• Point-of-Sale Payments: Accepting blockchain payments for low-value goods.
• Game State Updates: Allowing immediate in-game actions. The accepted risk is managed by setting value thresholds and requiring final confirmations for large withdrawals.

Soft confirmations offer zero protection against a 51% attack (or Nakamoto Consensus failure). An attacker controlling majority hash power can:

• Reverse any soft-confirmed transactions at will.
• Double-spend funds that were credited based on soft confirmations.
• Censor new transactions. This makes soft confirmations unsuitable for high-value settlements without trusting the miner set.

This highlights the fundamental difference between blockchain finality models:

• Probabilistic Finality (e.g., Bitcoin, Ethereum PoW): Security increases with confirmations but is never mathematically absolute. Soft confirmations live here.
• Absolute Finality (e.g., Ethereum PoS, BFT chains): Once a block is finalized, it is irreversible under normal protocol operation. These chains may have their own 'soft' phases (like 'optimistic' confirmation) before finalization.

Services mitigate soft confirmation risks through several strategies:

• Confirmation Requirements: Mandating multiple confirmations for high-value transactions.
• Reorg Monitoring: Using services like Chainscore to detect deep reorgs in real-time.
• Checkpointing: Relying on trusted nodes or exchanges that broadcast checkpointed blocks.
• Time Locks: Delaying fund withdrawal until sufficient final confirmations are reached.

The irreversible guarantee that a transaction is permanently settled on the blockchain. Soft confirmations are probabilistic indicators that precede finality. Key types include:

• Probabilistic Finality: Used by Nakamoto Consensus (e.g., Bitcoin). Finality is not absolute but grows exponentially more certain with each new block.
• Absolute (Instant) Finality: Used by BFT-based chains (e.g., Ethereum post-Merge). Once a block is finalized by the consensus protocol, it cannot be reverted.

The Proof-of-Work consensus mechanism pioneered by Bitcoin, where soft confirmations are a core concept. It operates on the longest chain rule, where the chain with the most cumulative proof-of-work is considered valid. A transaction's security increases with each subsequent block, making reorganizations (reorgs) statistically improbable but not impossible. This is the classic environment for measuring confirmation depth (e.g., '6 confirmations').

An event where a blockchain node switches to a different, longer, or heavier chain, potentially orphaning blocks that were previously considered part of the canonical chain. Soft confirmations exist to quantify the risk of a reorg. The probability of a transaction being reversed decreases as more blocks are built on top of it. Major reorgs can occur during chain splits or 51% attacks.

A property of longest-chain consensus where the likelihood of a block being reverted decreases asymptotically toward zero as more blocks are added on top. Soft confirmations are a direct measure of this probability. For example, in Bitcoin, a transaction with 6 confirmations has a historical probability of reversion of less than 0.1%. This contrasts with deterministic finality used in BFT protocols.

A valid block that is not part of the main canonical chain, typically due to a block reorganization. Transactions in an orphaned block return to the mempool. The concept of soft confirmations helps services estimate when it is safe to consider a transaction's block as unlikely to become orphaned. Miners who produce orphaned blocks do not receive the block reward.

The protocol that enables distributed network nodes to agree on the state of the blockchain. The mechanism defines the nature of confirmations:

• Proof-of-Work (e.g., Bitcoin): Uses soft confirmations and probabilistic finality.
• Proof-of-Stake BFT (e.g., Ethereum, Cosmos): Often uses a finality gadget (e.g., Casper FFG) to provide absolute finality, making soft confirmations less critical after finalization.
• Proof-of-History (Solana): Provides a cryptographic record of time, enabling fast soft confirmations with different security assumptions.