Zero Confirmation, or 0-conf, refers to a transaction that has been broadcasted to the network but has not yet been included in a block. The security and acceptance of 0-conf transactions vary by blockchain and depend on several factors.
"When Alice sends Bitcoin to Bob, the transaction is initially a 0-conf transaction. It remains in this state until a miner includes it in a block."
The security of 0-conf transactions is a contentious topic. Some blockchains, like Bitcoin Cash (BCH), have mechanisms in place to prevent double-spending of 0-conf transactions, making them relatively safe. However, for significant transfers or purchases, it is recommended to wait for at least 2-3 confirmations.
2.1 Bitcoin Cash (BCH)
"On the Bitcoin Cash (BCH) network, once a transaction enters the mempool, it's not possible to re-spend those funds without significant effort and collusion with miners. This makes BCH suitable for everyday transactions."
On other blockchains, like Bitcoin (BTC), 0-conf transactions are considered riskier. Factors such as the Replace-By-Fee (RBF) flag and network congestion can make it possible to double-spend 0-conf transactions. Therefore, businesses should be cautious when accepting 0-conf transactions.
3.1 Bitcoin (BTC)
"On Bitcoin (BTC), if a transaction is in its 0-conf state with the RBF flag set or the fee is low in a large mempool, it is possible to re-spend those funds. Businesses should be wary of accepting Bitcoin (BTC) 0-conf transactions for anything more than nominal amounts."
* All terms and definitions may update as the Cryptionary improves.