I tried to explain the issue with change on Twitter earlier and got a few Bitcoin advocates hot under the collar, but here it is: Say you receive 10 Bitcoin as

I tried to explain the issue with change on Twitter earlier and got a few Bitcoin advocates hot under the collar, but here it is: Say you receive 10 Bitcoin as, I don't know, your salary. You then spend 0.01 Bitcoin on a sandwitch, leaving you with 9.99 in change. Because you cannot safely spend change until after the sandwitch transaction is fixed in the block chain, this freezes your 9.99 remaining Bitcoin for about an hour. They're still yours, you just can't spend them. If you hypothetically try to spend one after 10 minutes (maybe you need to, I don't know, pay rent or do something people routinely do with actual money), you have two options: 1) If your counterparty is on the ball, they'll say "Nope, you don't have a single Bitcoin to your name right now." (You know you do, but he can't prove it, as 100% of your Bitcoin are currently in flight rather than being in accounts demonstrably under your control.) 2) If your counterparty is not on the ball, two outcomes: a) If your sandwich transaction is mutated and the mutated version makes it onto the block chain first, or if it is mutated and the mutated version loses the race to be confirmed but the confirmation of your original transaction happens on a block that doesn't end up in the block chain due to reorganization [+], then your rent payment fails. Your counterparty will discover later that they don't have the money that they expected, even if they watched you send it. b) If everything goes right, your transaction succeeds, and your counterparty does not realize that you just paid your rent with the Bitcoin equivalent of "The check's in the mail! Honest!" This continues happily until the check is, well, not in the mail. Bitcoin is currently undergoing active attack, causing many transactions by people who don't understand the inner workings of the system to fail. This attack is capable of disrupting (a portion of) transactions worldwide on Bitcoin for about a few tens or hundred dollars a day in botnet renting cost and could be coded by a CS102 student, if you told them where to look and what to do. [+] "What?" Glad you asked. See, the fundamental theory of Bitcoin is that miners throw immense amounts of hashing power to create "blocks" in a sequence. Each block references the last block. Each block also encodes transactions. However, everyone is racing to discover the N+1 block after N is released, so there can actually be multiple N+1 blocks. Only one of them will eventually win. (Bitcoin breaks ties based on height, so if N+1 #1 gets another block concatenated to it before N+1 #2, then it is much more likely to be the block which actually matters. #2 vanishes from consensus history, along with all of the transactions inside of it. That normally isn't a problem if you just rebroadcast your transaction, but if N+1 #2 had "your" transaction and #1 won with the mutated version of your transaction, then the transaction which you actually made is suddenly, retroactively, different from the one you think you made.) The reason everyone keeps talking about "roughly an hour" is because blocks happen at plus or minus every ten minutes, and after N+6 blocks, it is vanishingly unlikely that a transaction in block N will be removed from history by block N being replaced by a totally new chain. You could, for lower risk transactions, count it as "Probably good enough!" after N+2, as long as you're OK with occasionally having your transactions retroactively vanish.