GAP600 Blog

Why Cryptocurrency Is a Natural Fit for the Online Gaming Industry

The global online gaming and gambling industry has been experiencing significant growth over the past decade. The market was valued at approximately $78.6 billion in 2024 and is expected to reach over $153 billion by 2030, driven by digital adoption and global accessibility.

But behind the scenes, one of the most persistent operational challenges for gaming platforms is not gameplay… it’s payments.

The Payment Challenge Behind Online Gaming

Unlike many other digital industries, gaming platforms have to handle high-frequency, real-time financial transactions across multiple jurisdictions. Traditional payment systems were not designed for this level of speed or global accessibility, which has created friction.

Common challenges include:

Card declines that prevent players from funding accounts
Regional payment restrictions that limit access to entire segments of potential users
Fraud and chargebacks that increase operational risk
Slow settlement times delay the moment when players can actually begin engaging with the platform
Payment provider limitations in certain jurisdictions restrict what platforms can offer
Increasing cases of debanking, where regulated financial institutions are unwilling to support gaming-related businesses

This payment friction reduces deposit conversion rates as users abandon failed or delayed transactions, which ultimately impacts platform revenue. As a result, gaming operators have been forced to look for faster, more reliable, and globally accessible payment infrastructure.

This is where cryptocurrency comes in.

The Rise of Crypto in Online Gaming

Cryptocurrency introduced a completely different way to move value online — one that aligns closely with the needs of gaming platforms.

Unlike traditional payment methods, crypto allows players to fund accounts without relying on banks, card networks, or regional payment providers. This removes many of the barriers that have historically limited gaming platforms.

Key advantages include:

Borderless payments: players can transact globally without geographic restrictions
24/7 settlement: no reliance on banking hours or processing windows
Less dependence on traditional financial institutions
Reduced chargeback risk, since blockchain transactions are irreversible
Faster global deposits, enabling quicker access to gameplay

For gaming operators, crypto a way to expand globally, reduce risk, and improve the player experience. It’s therefore no surprise that the gaming industry became one of the earliest adopters of crypto payments.

From Early Adoption to a Full Ecosystem

The connection between crypto and gaming dates back to some of the earliest blockchain applications. Platforms like SatoshiDice demonstrated that gambling could operate directly on blockchain transactions. As adoption grew, more sophisticated platforms emerged. Gaming technology providers such as SoftSwiss and others started developing crypto-native casino platforms, blockchain-compatible payment systems, and dedicated games designed specifically for crypto users.

Over time, this led to the creation of an entire ecosystem around crypto gaming, including:

Digital wallets
Blockchain analytics tools
Payment processing layers
Risk and transaction verification systems

Crypto allowed platforms to scale, onboard more users, and operate more efficiently. However, one critical challenge remained.

The Remaining Challenge: Deposit Speed

While cryptocurrency significantly improves payment accessibility and flexibility, it does not automatically guarantee instant transactions.

Most blockchain networks require transaction confirmations before funds are considered secure. Depending on the network and conditions, this process can take anywhere from seconds to several minutes — or even longer during periods of congestion.

For gaming platforms, this creates a problem.

Gaming is inherently a real-time experience. When a player decides to deposit funds, their intent to play right now. Any delay between deposit and gameplay introduces friction. Waiting for confirmations can disrupt the seamless experience players expect. But moving ahead without the confirmation introduces a level of risk that the platforms cannot afford to take. So, how can platforms deliver instant deposits while still managing transaction risk?

The Role of Infrastructure Providers Like GAP600

To bridge this gap, gaming platforms increasingly rely on specialized infrastructure providers like GAP600 to enable real-time transaction decisioning.

By performing real-time risk analysis of blockchain transactions, GAP600 allows platforms to:

Accept deposits instantly, without waiting for confirmations
Determine transaction reliability and security in real time
Reduce delays that impact user experience and give players the thrill of instant play
Improve deposit conversion rates and player retention

Instead of forcing users to wait, platforms can deliver a frictionless, instant funding experience… while still maintaining control over risk. For more information about how easy it can be to start accepting crypto on your gaming platform, contact GAP600 for a demo. https://www.gap600.com/contact/

Daniel Lipshitz

CEO GAP600 Ltd

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GAP600 Blog

Why Instant User Experience Is Critical for Trading Platforms

For trading platforms, timing is everything. No matter if it is crypto markets, derivatives trading, or forex, the ability to act quickly can determine whether a trade is profitable or missed entirely.

This is true across both custodial platforms, where exchanges hold user funds, and non-custodial platforms, where users maintain control of their assets. While the underlying models differ from each other, both rely on one critical factor: how quickly users can fund their accounts and begin trading.

Why Deposit Speed Matters in Trading

Traders often deposit funds when market conditions shift, such as during periods of volatility, price movement, or emerging opportunities. At that moment, their intent to act is at its highest. If deposits are delayed, opportunities may disappear, price movements can shift unfavorably, and trading windows can close.

This has a direct effect on platform performance.

Slow funding increases trader frustration, and ultimately leads to platform switching. Traders naturally gravitate toward platforms that allow them to fund accounts and execute trades without delay.

Crypto Payments and Trading Platforms

Cryptocurrency has significantly improved how trading platforms handle deposits.

Compared to traditional banking systems, crypto enables 24/7 funding, access from anywhere on the globe, and faster settlement times. Traders are not limited by specific banking hours, regional restrictions, or delays caused by intermediaries.

However, crypto is not instant.

Most blockchain networks require transaction confirmations before funds are considered secure. Depending on network conditions, this can introduce delays that are especially problematic in trading environments. For example, Bitcoin deposits can require 1–6 confirmations, which can take roughly 10 minutes to over an hour before funds are considered usable.

Infrastructure for Instant Trading Deposits

To address these challenges, platforms need more than fast payment rails — they need instant transaction decisioning infrastructure.

This includes the ability to detect transaction risk in real time, analyze blockchain activity as it happens, and approve deposits without waiting for traditional confirmation cycles.

Without this layer of instant deposit infrastructure, platforms are forced to choose between speed and security. With it, they can deliver both.

How GAP600 Solves This Problem

GAP600 enables trading platforms to bridge the gap between blockchain speed and real-time trading requirements.

By performing real-time blockchain transaction analysis and risk verification, GAP600 allows platforms to accept deposits instantly — without waiting for confirmations.

This approach delivers several key benefits.

Immediate funding, allowing traders to enter positions at the moment opportunity arises
Higher execution readiness, ensuring capital is available when markets move
Reduced funding friction, minimizing drop-off at the point of deposit
Increased trading volume, driven by faster capital deployment
Real-time risk control, enabling instant decisions without compromising security

For more information about how easy it can be to start accepting crypto on your trading platform, contact GAP600 for a demo. https://www.gap600.com/contact/

Daniel Lipshitz

CEO GAP600 Ltd

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GAP600 Blog

How Blockchain Prevents Double Spending

The Double Spend Problem and the Reality of Instant Crypto Deposits

Cryptocurrency has built a reputation on the promise of fast, digital, borderless transactions. Users expect deposits to be recognized immediately — especially when trading, funding accounts, or accessing liquidity.

But blockchain transactions don’t become final the moment they are broadcast to the network. Finality only comes once a transaction is confirmed and written into the blockchain.

That gap between transaction broadcast and transaction confirmation creates a real operational risk for platforms that want to offer instant crediting. At the center of this risk sits a foundational concept in digital payments: the double spend problem.

What Is the Double Spend Problem?

The double spend problem refers to the possibility that the same digital funds could be used more than once.

Because digital information can theoretically be copied, any digital payment system must ensure that a single unit of value cannot be spent twice. This challenge is not unique to cryptocurrency — it is an issue across digital payments in general — but decentralized systems have to solve the problem without relying on a central authority.

In simple terms, double spending means attempting to use the same funds in two different transactions. Preventing that outcome is essential for any system that wants to function as reliable money.

How Blockchain Prevents Double Spending

Blockchain technology addresses the double spend issue.

First, transactions are recorded on a shared distributed ledger, which means that all participants in the network can verify transaction history. This prevents hidden or conflicting ownership records.

Second, blockchains use consensus mechanisms, such as Proof-of-Work or Proof-of-Stake, to determine which transactions are valid. Only one version of a transaction can ultimately be accepted into the official chain.

Third, confirmations are final. Once a transaction is included in a confirmed block, it becomes difficult to reverse it. With each additional confirmation, the transaction’s permanence is more and more likely.

In this way, blockchain largely solves the double spend problem, but only after confirmation has occurred.

The Risk Before Confirmation

The practical risk for businesses happens right before that final confirmation.

When a transaction is first broadcast, it enters the network’s mempool, where it waits to be selected for inclusion in a block. During this stage, the transaction is visible but not yet final. Under certain conditions, it can be replaced, reprioritized, or dropped entirely.

Network congestion can further extend this waiting period, sometimes significantly. Fee competition can also influence which transactions are confirmed first.

For example, a trading platform credits a customer’s deposit immediately after seeing the transaction broadcast. The customer uses those credited funds to begin trading. If the original transaction is later replaced or fails to confirm, the trading platform carries the financial risk.

This is not a theoretical scenario — it represents the core challenge behind instant crypto deposit recognition.

Why Instant Deposits Still Matter

Despite these risks, instant deposits are still expected.

In traditional financial transactions, immediate credit recognition is common. For example, credit card payments are approved instantly even though settlement occurs later. Cash payments are accepted immediately because verification mechanisms exist to check for counterfeit vs authenticity.

It is therefore not surprising that crypto users expect the same experience. Waiting for confirmations — which may take 10 minutes or much longer depending on network conditions — can introduce friction, delay trading activity, and make the platform less competitive.

For exchanges, processors, and liquidity providers, speed is a significant part of the customer experience. The challenge is figuring out how to deliver that speed without relying on guarantees from centralized systems.

Why the Risk Is Growing

In recent years, it has become more and more complex to assess unconfirmed transactions. Why?

Transaction replacement features such as Replace-By-Fee (RBF) allow users to modify or replace transactions before confirmation.
Automated wallet behavior may resend transactions with updated fees or parameters to speed confirmation.
Competition for block space has intensified, making confirmation order less predictable.
Higher mempool volatility means confirmation times can fluctuate significantly depending on network conditions.

It is important to keep in mind that many conflicting transactions are not malicious. They often result from normal user actions or network optimization mechanisms. But regardless of intent, platforms offering instant credit are still exposed.

What Businesses Need to Manage This

To safely offer instant crypto deposits, platforms have to move beyond simple transaction detection. Effective risk management now requires:

Real-time transaction analysis
Instead of treating a broadcast transaction as automatically valid, systems must continuously evaluate it from the moment it appears until confirmation. This means tracking updates, replacements, and network behavior even though the transaction remains unconfirmed.

Network-aware risk scoring
Blockchain conditions are not static. Confirmation likelihood depends on factors such as current mempool congestion, fee competition, and transaction priority. Effective risk models have to account for the network’s live state, not just the transaction itself.

Behavioral signal monitoring
Reliability is influenced by patterns in wallet activity, rebroadcast behavior, fee adjustments, and transaction history. Monitoring these behavioral signals helps distinguish between stable transactions and those more likely to change before confirmation.

Replacement probability modeling
It’s important to understand how likely a transaction is to remain valid until it is included in a block. Businesses increasingly need models that dynamically estimate this probability, allowing them to make informed crediting decisions rather than relying on fixed rules.

Where GAP600 Fits

GAP600 was built to operate in this pre-confirmation window.

Instead of treating all unconfirmed transactions equally, GAP600’s proprietary risk engine analyzes each transaction as it reaches the mempool, evaluating network signals, transaction characteristics, and behavioral indicators to estimate the likelihood that the transaction will finalize successfully.

This allows platforms to make informed decisions about whether to recognize a deposit immediately, instead of relying on fixed confirmation rules or waiting for blocks to be mined. Exchanges, payment processors, liquidity providers, and wallets can now offer instant deposit recognition while maintaining controlled operational risk.

The Future of Instant Crypto

Crypto infrastructure continues to evolve toward faster user experiences. At the same time, blockchain finality will always require some degree of confirmation time. This tension between speed and certainty is not going away.

The platforms that succeed will not be those that wait for perfect finality, nor those that ignore the risk entirely. They will be the ones who build systems capable of managing the gap between transaction broadcast and confirmation.

Daniel Lipshitz

CEO GAP600 Ltd

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GAP600 Blog

2025 in Review: How GAP600 Adapted to a Changing Crypto Reality

2025 was a busy year for crypto infrastructure. It was a year that witnessed protocol-level change, changing user behavior, and a growing gap between how blockchains work and how businesses actually need them to work.

For GAP600, it was a challenging, interesting, and ultimately formative year — one that forced deep changes to how instant deposit risk is understood, modeled, and mitigated.

GAP600 enables instant crypto deposit recognition by analyzing transactions in real-time and providing a financial guarantee on trx confirmed by our platform at 0-conf level.

A Protocol Shift That Changed the Rules

One of the most significant developments impacting the industry in 2025 was the continued integration and adoption of Full Replace-By-Fee (RBF) on Bitcoin.

Originally, Bitcoin followed a “first-seen” rule: once a transaction was seen on the network, it was often treated as “good enough” when applying certain propagation and risk-assessment tools to credit a user. Initially, Optin RBF and now Full RBF change that assumption. Today, transactions can be replaced minutes later (sometimes multiple times) with a higher-fee version — or disappear entirely — before they are confirmed.

The practical implication is simple: a Bitcoin transaction is much riskier for 0-conf use or instant crediting, finalizing only when it is mined into a block. And also before we have the lightning response we are referring the main net transactions in this case

What This Meant for GAP600’s Risk Engine

GAP600 had to reconsider how risk is measured in real time.

Instead of looking at a single transaction in isolation, the risk engine now evaluates behavior over time. For example:

A user submits a transaction and then rebroadcasts a slightly modified version with a higher fee
A wallet repeatedly replaces transactions under network congestion
A deposit looks valid at first, but then shows patterns commonly associated with replacement activity

None of these signals alone point to fraud. But together, they help indicate whether a transaction is likely to survive until confirmation.

This required GAP600 to collect more contextual data, continuously refine scoring models, and redesign parts of the engine to react dynamically — adjusting confidence levels as network conditions and user behavior change.

The question is no longer “Did we see the transaction?” but rather “How likely is this transaction to still exist in ten minutes?”

That shift has defined how GAP600 approaches instant deposit risk going forward. This work is ongoing, and it has become a core area of innovation for GAP600.

Double Spends: A Growing Reality, Not Always a Malicious One

One of the clearest trends in 2025 was the sharp rise in double-spend-related transactions affecting the ecosystem.

It’s important to clarify: not all double spends are intentional fraud. In many cases, they result from user behavior, such as fee adjustments, wallet retries, or automated transaction replacement logic. On a protocol level, many of these transactions simply fail, even though the original transaction still pays out successfully.

However, the frequency of double-spend scenarios has increased dramatically, creating real operational and financial risk for payment processors and liquidity providers offering instant credit.

Market Dynamics: Pressure, But Also Opportunity

Despite these challenges, GAP600 continues to actively serve — and grow within — this space.

We’re seeing renewed demand for instant deposit solutions, new players entering the market, and increased sophistication among buyers, particularly on the risk side.

Our primary clients remain payment processors and a selection of non-custodial liquidity providers who view customer experience as a competitive advantage.

Custodial exchanges, by contrast, continue to move more cautiously. Many still shy away from investing heavily in instant user experience, prioritizing operational simplicity over speed.

Network Support and Service Expansion

From a service perspective, 2025 also marked continued expansion for our business.

Bitcoin remains the dominant demand driver, but GAP600 now supports Litecoin (LTC), which we launched in response to clear market demand. We also offer ongoing support for Ethereum (ETH), USDT, and Bitcoin Cash (BCH).

Each network behaves differently, with its own risks, confirmation speeds, and range of user habits. That’s why risk models need to adapt to the specific network they’re operating on.

Scale as a Signal of Demand

In 2025, GAP600 surpassed $1B USD in processed volume and millions of address queries, reinforcing what the market has been signaling for years: Instant deposits are a core infrastructure requirement. Even as protocol complexity increases, the demand for speed has not slowed. If anything, expectations continue to rise.

Looking Ahead

If 2025 taught us anything, it’s that instant deposits can’t rely on old assumptions.

Blockchains are changing, user behavior is changing, and new risks are emerging. That means instant deposit systems have to keep evolving… constantly updating how risk is measured, monitored, and managed.

GAP600’s focus going forward is clear: adapt to protocol changes as they happen, respond to real-world user behavior, and help clients offer fast deposits without taking on unnecessary risk. The work we’ve done in 2025 has laid critical foundations for what comes next in 2026.

Daniel Lipshitz

CEO GAP600 Ltd

GAP600 in the news

Crypto’s primary use case remains speculation, with recent developments enabling investors to leverage and earn interest around their viewpoint of price developments. Another compelling use case and immense value lies in its application as a means of exchange or payment method.

While cryptocurrency transactions have gained traction in the gaming and gambling sectors, adoption and usage in consumer and merchant payments lags.

However, this prevailing digital payment status quo does not stem from a lack of functionality, capacity or technological capabilities. The fact is that cryptocurrency can already meet consumer and business payment needs – the capacity to support fast, secure and reliable crypto payments already exists.

It is a lack of widespread adoption and usage that currently constrains crypto’s rise as a popular and pervasive payment method, partly because developments and advancements in fiat-based digital payments have diluted the crypto payment value proposition.

Additionally, there is no compelling reason to use crypto as opposed to fiat. In industries where there is a compelling reason, like the online gaming sector, adoption has shown significant strength. But before the value drivers of a higher quality form of money can gain relevance among a mainstream user base, the money needs to be trusted and ubiquitous.

Cryptocurrency already offers many benefits and greater value over fiat currency because it is a higher quality, non-inflationary form of money that gives users complete control over their transactions. Transacting with cryptos also globally accepted, and fast when transacting with scalable networks like Bitcoin SV..

Despite these benefits, mass adoption has not taken off in development around the Bitcoin payment ecosystem and has stiff competition from developers of fiat-based applications, who have and are responding to the disruptive industry threat posed by cryptocurrency. In short given that money is a tool, there is no compelling reason to move across and start using Bitcoin as a means of exchange.

Before even arriving at the point where we can choose Bitcoin as a form of payments, we need to have it and trust it. Only then does the question of user experience, high quality of money, self custody and borderless transacting become relevant. Essentially, only at that point will Bitcoin be ready to compete in payments and the global financial system

Ultimately, consumers don’t really care what technology they use to pay. Money, in whatever form, is a means of exchange – it’s a tool and a means to an end. As long as we are comfortable with the mechanism, it is convenient and frictionless, and we trust the system, people will willingly use one form of payment over another.

The route to establish Bitcoin as a ubiquitous and trusted form of payment is via the blockchain, with enterprise services playing a major role. Embracing blockchain technologies at an enterprise level to address specific challenges and pain-points would create and entrench trust and familiarity with these services and solutions to ultimately drive adoption.

In this scenario, the technology behind the service becomes irrelevant, as long as it works and integrates seamlessly into daily life. A great example is the Linux operating system. Most people don’t know they use Linux when, in fact, most popular online services like Google, Facebook and Twitter run off that technology.

Bitcoin SV (BSV) is the ideal candidate to build out these capabilities. It offers various strategic and sustainable advantages over other blockchain projects because it is the original design of Bitcoin, which birthed the whole industry – BSV is Turing complete with computing language enabled, it is non-custodial in nature, has a stable protocol, is massively scalable, supports micropayments, and is non-inflationary.

Because BSV leverages the original Bitcoin design, it offers a proven stable and massively scalable network that can truly support global enterprise usage. The most compelling route to BSV adoption and use as a payment method or means of exchange is via blockchain services or the global ledger.

In summary, our view is that the route to mass BSV adoption, and realizing the promise of greater economic freedom that this brings, is via blockchain services, rather than an incremental route of speculation and converting one merchant at a time.

Building blockchain solutions that add value as technological platforms to a range of services within enterprises and growing companies will engrain Bitcoin as an everyday tool, which will make end-users comfortable with using it, just like we view and use email technology today.

From this point, the jump to mass adoption of this technology as a tool for transacting with money becomes obvious and easy. When this happens, the world will benefit from numerous other added advantages, such as transparent transactions and non-inflationary peer-to-peer transactions for global money transfer. When these services come into play, they will further naturally accelerate mass adoption.

Check out below our CEO discusses GAP600 and the route to mass adoption for payments via blockchain services on a panel at Coingeek Conference Live Oct 2020.

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Daniel Lipshitz

CEO GAP600 Ltd

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As previously published on Coingeek, GAP600 takes a look at how cryptocurrency is supporting the surge in online online gambling and gaming. The global COVID-19 pandemic and the resultant lockdowns and shelter-at-home orders, which shuttered casinos and brick-and-mortar betting stores, could prove to be the tipping point for online gaming and gambling.

A GamesIndustry.biz analysis showed that game sales across 50 key global markets rose by 63% in 2020, with sharp spikes experienced as countries went into some form of lockdown. For instance, digital downloads increased by more than 180% in France during the country’s first week of lockdown (16 – 22 March). Similarly, digital sales rose 142.8% in Spain and 174.9% in Italy as these countries went into their respective lockdowns.

Gaming portals such as Paytm First Games and Gamerji also experienced significant increases in online gaming portal users, with 200% and 50% spikes, respectively.

And while regulations constrain online gambling growth, the sector has also surged after the COVID-19 pandemic swept the globe.

For example, a report published on Nasdaq.com shows that internet gambling revenues (excluding sports betting) in New Jersey rose 66%, to $65 million in March. Revenues are on track to exceed $700 million this year, up from $483 million in 2019. https://www.nasdaq.com/articles/online-gambling-is-booming-amid-the-lockdown-2020-04-20

A joint study conducted by AlphaBeta Australia and credit bureau illion Australia Pty Ltd., also revealed a 67% increase in online gambling in April 2020, following the shutdown of all non-essential services in Australia.

https://europeangaming.eu/portal/latest-news/2020/08/27/76712/new-report-predicts-online-gambling-market-growth-at-over-16-through-2026/

Furthermore, a recent Global Market Insights Inc. report on the online gambling market suggests that the market value of online gambling will continue to grow, exceeding $160 billion by 2026. The report attributes this continued rise to smartphone adoption, improvements in internet infrastructure, easy accessibility to casino gaming platforms, and advances in technologies such as virtual reality (VR), the Internet of things (IoT), and cryptocurrencies and blockchain.

Cryptocurrency-based gambling and gaming sites have increasingly gained favor among punters and players. As an example, Cointelegraph reported that US-based crypto gaming company Bling experienced an almost 50% increase in users during March, with the platform “reaching 70,000 users per day and over 400,000 active users per month.”

https://cointelegraph.com/news/crypto-gaming-seems-to-be-exploding-during-covid-19

There are many reasons for crypto gaming’s rise in popularity, including the blockchain’s ability to provide secure and transparent transactions, with better house odds over conventional gambling sites – around 1.5-2% – and with provably fair results that are recorded immutably on the blockchain and are therefore easily auditable.

Many players also prefer to transact using digital currencies like Bitcoin for enhanced security to minimize the risk of hacking and identity theft, while the decentralized nature of cryptocurrency also provides anonymity to gamblers and players.

Bitcoin SV ($BSV) in particular is an increasingly popular industry option. BSV offers a compelling use case due to its superior back-end security, its tokenization capabilities, robust authentication protocols, transparency and its cost and operating efficiencies, which is why more gambling and gaming platforms choose to set up their operation using the BSV blockchain.

A prime example is BitBoss, which is leveraging the BSV network to revolutionize the online gaming industry. The company offers bridge technology for casino games, which proves games are fair by allowing players to reproduce results on the WhatsOnChain third party website.

BSV also offers unbound scalability as the blockchain can handle a significant volume of transactions simultaneously while keeping fees low and the blockchain secure, stable and efficient.

Also, it is a smart contract platform, which offers benefits over more traditional blockchains. In addition, and possibly most importantly, making gaming work on the BSV blockchain delivers a better user experience, which helps to drive adoption and usage.

The traditional gambling and gaming industries have always focused intensely on delivering exceptional customer experiences, and the online crypto gaming sector must meet customer expectations around transaction speed and safety.

Punters and gamers want to make deposits or withdrawals instantly. However, this can prove exceptionally challenging for cryptocurrency payment gateway providers because multiple confirmations may be required before a transaction can be processed. This can take anywhere from 10 minutes to a few hours, which severely compromises the customer experience.

But by combing the strengths of the BSV blockchain with a solution like GAP600, which has already been implemented and tested in real-world crypto gaming platforms and casinos (read more about how we helped DuckDice and CoinsPaid revolutionize their CX), platforms can create a customer experience that meets player expectations and their demand for instant gratification.

https://www.gap600.com/uncategorized/duckdice_integrates_gap600/

https://www.gap600.com/uncategorized/coinspaid/

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Daniel Lipshitz

CEO GAP600 Ltd

GAP600 in the news

In the second installment of this two-part blog series, GAP600 expands on the state of 0-conf and instant deposits in the cryptocurrency and Bitcoin space by delving into the different characteristics of coins and how these impact 0-conf transaction (tx) enablement.

The GAP600 approach to 0-conf

In part 1 of the report, we outlined the technical workings of the GAP600 solution and how it enables instant 0-conf payment and deposit acceptance across Bitcoin SV (BSV), Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH) transactions, while protecting businesses against risks such as fraud and double-spend when accepting instant crypto payments and deposits.

It is, however, pertinent to expand further on the technical aspects by outlining GAP600’s approach and philosophy in the context of 0-conf enablement.

GAP600 currently offers 0-conf tx services for BTC, BCH, BSV and ETH. As already outlined above, we look for a reasonable fee/size or fee/weight and monitor for any propagation issues or conflicts and no other issues when guaranteeing 0-conf transactions made using Bitcoins.

Among the Bitcoin fork coins, the first-seen rule is generally respected by mining pools once a transaction is received . This rule implies that once a mining pool has received a tx, they will not replace it with a conflicting tx.

This rule is generally followed, except where we see a great variance in fees over time of stress in the BTC network. A transaction with an unreasonably low tx will be susceptible to double spend on the BTC network. The network topography that makes up the Bitcoin network is also a small world design or Mandella network, which ensures fast transaction propagation, as well as a very close singularity regarding what everyone sees in their mempool.

Bitcoin is designed in a UTXO (unspent transaction outputs) format, in which transactions or address capability is defined by valid transaction outputs. This design is very efficient and scalable as it does not require constant account status monitoring to validate a transaction.

The ETH approach, on the other hand, is account-based, which means each transaction has an associated number that can be processed on the account and ordering system. Furthermore, the ETH blockchain does not lend itself to a small world structure. As such, there is no clear picture available of all transactions at any given time.

Consequently, on Ethereum, we experience differences in what our various nodes see at the 0-conf level. This adds complexity to our processes when we aim to monitor propagation and conflicting transactions. Through reasonable fee monitoring propagation and waiting for one confirmation, we can currently guarantee 1-conf ETH transactions.

GAP600 is currently researching how to support omni token transactions. Omni is a protocol that runs on top of BTC and also uses an account-based model, with the sequence of transactions defined by the order they are included in a block on the BTC network.

The challenge regarding omni from our perspective is that any tx with an output of a specific address can be used to move omni coins. As such, if an omni account has more than one valid UTXO, the capacity to guarantee 0-conf transactions becomes limited.

Ultimately, though, the ability to enable safe and secure instant or near-instant 0-conf payments or deposits already exists. By removing the inherent risk of double-spend, we believe that 0-conf can and should become the industry standard for cryptocurrency transactions. Only them will cryptocurrency realize its potential as a replacement for fiat currency.

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Daniel Lipshitz

CEO GAP600 Ltd

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This is the first in a two-part blog series in which GAP600 takes an in-depth look and shares insights into the state of 0-conf and instant deposits in the cryptocurrency and Bitcoin space.

Modern consumers and businesses demand instant, real-time transactions (tx) across payments and deposits, making it the new normal for both fiat and crypto financial services providers.

Consumers demand speed and convenience for seamless and frictionless customer experiences (CX), while businesses and merchants want transfer and payment transactions to reflect in their accounts immediately to improve cash flow and boost operating capital availability.

In response, tx enablement with fiat currency and traditional payment methods has advanced at pace as a wave of fintech innovation disrupted the market and forced incumbent financial services providers to respond.

A world of fiat

The need to keep pace with these developments has amplified the urgency with which the cryptocurrency industry must enable instant tx capabilities to maintain market relevance.

Decentralized, non-censorable cryptocurrencies have no inflationary effect and enable low transaction fees, which offer distinct improvements over fiat currency. However, if the crypto CX across the spectrum of financial transactions is not orders of magnitude better than fiat, adoption and usage will not scale.

And safe, secure 0-conf tx enablement is the foundation on which the industry must build cryptocurrency’s instant tx value proposition because anything less is more of the same when compared to fiat options.

The GAP600 approach to 0-Conf

The GAP600 solution enables instant 0-conf payment and deposit acceptance across Bitcoin SV (BSV), Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH) transactions, protecting businesses against risks such as fraud and double-spend when accepting instant crypto payments and deposits.

Launched in 2016, GAP600’s team of data scientists, network engineers and software developers build real-time risk engines that model Bitcoin transactions using deep learning data science models, and construct financial-grade platforms. These solutions meet a growing demand for instant crypto tx enablement primarily in the online gambling and gaming industries and on cryptocurrency exchanges.

Thankfully, it is achievable to perform safe and secure 0-conf transactions by following basic guidelines. GAP600 mitigates 0-conf transaction risk with a proprietary risk engine that analyses and performs live risk scoring for each transaction as it reaches the mempool.

This is achieved by analysing a transaction’s static information, weighted more heavily towards the fee weight or size ratio and the input characteristics. The solution also looks at historical tx and ancestral aspects, as well as its propogation on the network to determine how it was transported.

GAP600 uses this data to assess conflicts and test against thresholds with probabilistic models to confirm or reject the transaction.

This enables us to guarantee cryptocurrency payments before they reach the blockchain, which enables exchanges, payment services providers, and other operators and merchants that accept cryptocurrency to recognise unconfirmed BSV, BTC, BCH and ETH transactions as final.

This solution is revolutionising the speed of cryptocurrency transactions and adds significant value to a range of commercial environments by enabling instant, risk-mitigated cryptocurrency commerce that is safe and secure, yet still offers a simple, more efficient user experience.

The company currently confirms over 400,000 transactions a month, saving customers over 28 minutes on average in transaction time.

So how effective is this approach? And how safe are 0-conf transactions?

The state of 0-conf

In our first quarterly State of 0-Conf report, we have analysed transactions that were processed and guaranteed on the GAP600 platform, or rejected based on the system’s risk analysis, to deliver insights and industry-related statistics. We have looked primarily at BTC transactions because Bitcoin BTC is still the dominant coin used for monetary transactions.

Approach and methodology

It is difficult to differentiate all transactions on a blockchain based on their end-use. Therefore, we have focused on transactions that we know were for exchange, teller, and payment processing services to analyse a more accurate data sample.

We analysed a sample of 1.2 million transactions across our client base, which includes payment processors and exchanges, which produced the following statistics:

0-conf throughput

+/- 0.1% of transactions GAP600 processed failed to reach the blockchain. This figure has generally remained constant throughout our operational experience in the industry. These represent transactions which in essence were fraud attempts and were initially published as desired transactions but failed essentially at realizing the double-spent attempt.

While this statistic may appear to be minimal and insignificant, all businesses operating in the crypto space have a low tolerance to fraud. In addition, when a vulnerability is discovered, it is heavily exploited. As such, proactive prevention is vital. Actual double-spend numbers would be much higher if there were no mitigation measures in place.

To contextualise this figure, it is important to understand the transaction process. Every new Bitcoin tx comprises previous transactions, which creates a chain link. The GAP600 system performs a backward analysis of these chain links to identify potentially suspicious transaction ancestors or inputs that could indicate an attempted fraudulent double-spend attempt.

Another interesting statistic based on historical analyses performed by the GAP600 system indicates that only 1.5% of transactions had transaction ancestors or inputs that were too suspicious to confirm instantly.

While suspicion does not necessarily imply a nefarious purpose, the presence of these factors places numerous transactions outside GAP600’s parameters. They are, therefore, considered too high risk to guarantee.

Tx speed

The time we save on the platform varies according to stress periods on the network. For instance, significant backlogs still occur periodically on the BTC network. On average, it took 15 minutes for transactions from the sample set to be included in a block and be considered as almost final.

Payment processors generally wait for 1 block confirmation, while most crypto exchanges wait for between 3-6 block confirmations before processing a transaction. This means transactions can take between 15 minutes to 1h05 to complete, but certain transactions have taken a day or more depending on network stress conditions.

A simple solution is just to wait the equivalent of 3-6 confirmations on the BTC network, but this obviously degrades the experience and fails to meet the demand for instant transactions.

Double spend

As previously stated, GAP600’s experience indicates 1.5% of transactions include ancestors or inputs that are too suspicious to confirm, but not every suspicious input indicates a double-spend attempt.

When GAP600 does not confirm these transactions for ancestral or other reasons, there is no incentive for the attacker to follow through with the second transaction, which is required to confirm if the first transaction is a double-spend attempt. As such, in many cases, there are no attempted or completed counter double-spend transactions after the initial transaction is not confirmed by the platform.

In addition, the sensitivity around money, especially digital money, necessitates that responsible services providers mitigate risk wherever possible. This ensures that they generally have clear control of their revenue streams, especially when offering this as a commercial service.

GAP600 has in the past guaranteed 0-conf transactions which failed to reach the blockchain. In each case, we perform a rigorous analysis to determine the causes and implement changes on a granular level to ensure we don’t experience them again.

Tx fees

Our statistics reveal that fee/size or fee/weight requirements increase in relation to countering the risk of attempted double-spend. A transaction with a reasonable fee relative to current stress in the network and with nothing out of ordinary involved in the transaction, should be able to benefit from instant deposit recognition.

Key insights

Despite the perceived prevalence and risk of double-spend on Bitcoin transactions, safe and secure instant deposits are possible using a solution like GAP600. In future articles, we will explain how the main Bitcoin versions – BTC, BCH and BSV – each approach instant transaction experience enablement on a protocol level.

And while the real risk is low, it is vital that the industry adopts best practices in mitigating double-spend attempts to discourage increased exploitation of any vulnerabilities.

The GAP600 model is designed to be as accurate as possible. We run a significant network of node clusters and do a great deal of analysis to avoid any amount of fraud, no matter how small. By rejecting transactions based on specific thresholds, we effectively mitigate opportunities to exploit vulnerabilities.

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Announcement

The industry standard for instant transactions

At GAP600, we believe that cryptocurrency offers a path to economic freedom and is the medium with which the world can transact and trade. However, if cryptocurrency hopes to entrench its relevance and ultimately drive adoption among end-users, service providers must create a seamless, secure and instant transactional experience.

GAP600 already enables instant cryptocurrency payments and deposits made in Bitcoin (BTC), Bitcoin Cash (BCH) and Bitcoin SV (BSV) for any wallet, with support for Ethereum (ETH) rolling-out soon.

Instead of trying to effect the protocol in any way, we have focused on accepting the network consensus to add value by allowing service providers to instantly confirm (0-conf) certain transactions (tx).

By analyzing actual events and failed transactions, we’ve created predictive and preventive tools that enable us to guarantee 0-conf transactions, particularly for specific transactions with straightforward characteristics (while we can also accommodate certain edge cases, this article will only focus on the former tx types).

GAP600 clients, which comprise payment processors and exchanges, query our API upon an inbound tx reaching the client’s platform. GAP600 then responds with a confirm/not-confirm for that specific transaction. Once GAP600 responds with a confirm, we financially guarantee the value of the transaction should it fail to reach the blockchain.

Tx confirmation guidelines explained

To ensure the maximum amount of transactions are confirmed by GAP600, we provide clients with an API call that provides a fee recommendation which, if used (and in the absence of other abnormal variables), will ensure the algorithm instantly confirms a transaction.

We apply a straightforward fee/size ratio and fee based on the specific tx size that our clients generally process. This fee recommendation is in line with other standardized industry fee recommendations and is very similar to https://bitcoinfees.earn.com/, although we only provide one option to keep it simple.

In this regard, any tx from almost all standard wallets that offer a high priority service or create a dynamic network fee calculation, will almost certainly be approved and guaranteed with 0-conf requirements by the GAP600 system.

Based on our considerable industry experience since launching in 2016, we’ve established various simple best practice guidelines for service providers to communicate to their depositors & payees to ensure instant confirmation by the GAP600 service. Here they are:

BTC

Use the GAP600 recommended or industry priority fee for the transaction based on current network status – note, the BTC network fee has high volatility as the network moves from high activity to low activity.
Do not use RBF (replace by fee) transactions.
Transaction inputs should be confirmed.

BCH, BSV

Use the GAP600 recommended or industry priority fee for the transaction. BCH and BSV networks are stable, and required network fees do not change significantly.
Transaction inputs should be confirmed.

ETH (coming soon to GAP600)

Use the GAP600 recommended or industry priority GAS fee for transactions.
Ensure that the GAS limit is at the minimum level required for ETH transaction or for an ERC20 token transfer.

Benefits exceeding fiat currency

In our view, cryptocurrency use, led by Bitcoin, already offers many benefits and greater value over fiat currency because it is an open source, decentralised platform that gives users complete control over their transactions.

However, to realise its potential and gain traction within mainstream markets, the experience of transacting with cryptocurrencies – whether that is a payment or deposit – must exceed that offered by incumbent payment and fiat services.

And the key to crafting the type of customer experience that will add value to the payment transaction process is the ability to enable instant transactions.

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GAP600 adds support for Bitcoin SV

GAP600, a global pioneer in cryptocurrency payment transaction enablement, today announced that the service will also support Bitcoin Satoshi Vision (SV).

GAP600 facilitates instant, risk-mitigated cryptocurrency commerce by enabling exchanges and payment processors to recognize unconfirmed Bitcoin, Bitcoin Cash and now, Bitcoin SV transactions as final. The company’s proprietary risk engine analyzes and performs live risk scoring for each transaction as it reaches the mempool, which enables the company to guarantee cryptocurrency payments before they reach the blockchain, providing an instant customer experience for crypto deposits and payments.

The Bitcoin SV approach is focused on leaving the protocol and consensus layer unchanged and in line with Bitcoin version 0.1. “This ensures a stable protocol, while all protocol development focuses on massive scalability,” explains Daniel Lipshitz, GAP600 founder and CEO.

Lipshitz explains that Bitcoin SV’s approach is to function as a means of exchange and as a public blockchain. This includes enabling features on the blockchain that will facilitate use cases across data storage and smart contracts, while entrepreneurs and enterprises will build on top of the stable protocol as applications to meet market demands.

“By providing a stable and massively scalable protocol that enables blockchain features, Bitcoin SV offers a fresh approach, despite it essentially being the oldest designed protocol in the crypto space,” continues Lipshitz. Add to this the fact that the Bitcoin SV ecosystem is robust and well supported and Lipshitz believes that Bitcoin SV has a great chance at mass adoption.

And because GAP600 is passionate about the potential of cryptocurrencies to deliver on its promise of economic freedom, the company will continue to support the entire community, without favor or bias, until free-market dynamics determine the eventual winner.

“As such, future developments at GAP600 will focus on broadening our services to clients by adding support for a pipeline of additional cryptocurrencies. This will enable clients to accept instant crypto deposits to deliver an enhanced customer experience to their clients,” concludes Lipshitz.

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