BitGo Announces Instant Transactions Service

News and Analysis

BitGo announced lauching a new service, which would allow the company’s customers to accept bitcoin transactions prior to their official confirmation on the blockchain.

The new service dubbed BitGo Instant offers acceleration of transactions without affecting their security. According to BitGo’s statements, it excludes risks of both double spending and any alterations that may be introduced in the transaction. BitGo states that the list of companies that decided to employ the service includes such major exchanges as Bitfinex, Bitstamp, and Kraken, as well as altcoin trading company ShapeShift and e-commerce app Fold.

“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,” Ben Davenoprt, BitGo CTO, said in an interview to publication CoinDesk.

BitGo states that the service might be the solution for problems faced by such companies as Coibase and Shapeshift on numerous occasions. Most of those problems are related to double spending.

“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. Recipients who fail to receive funds can file a claim and we’ll back it fully,” Davenport added.

Upon transacting, BitGo signs it with one of three multisignature wallet keys. The third one is subject to storage with a key recovery service. Davenport pointed out that the service works well outside of domestic BitGo wallets and invites anyone to join in.

The service’s terms of use state that the receiving party pays nothing, while the sending party has to pay a fee to the tune of 0.1% for transactions in excess of 1 BTC.

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