Configuring Blockcypher for 0-conf cash-out

Cash-out Bitcoin transactions which are below your 0-confirmation limit can have their confidence checked by Blockcypher. Doing so automatically discriminates against risky deposits from customers which have the potential to either never confirm, or which could be maliciously diverted.

Using this plugin helps protect you against cash-out attacks, while still providing immediate dispenses to customers who send with proper fees.

When enabled, transactions are confidence scored below the 0-conf limit set here.

If the incoming transaction is below a 'Confidence factor' threshold you set within the Blockcypher settings box, after detecting the user's deposit the machine will divert them instead to the 1-confirmation flow which requires their phone number and to await the first confirmation before redeeming cash.

WARNING: Dispensing cash upon a zero-confirmation Bitcoin deposit is inherently a risk. Blockcypher scoring mitigates but does not eliminate the chance that your customers' deposits may not confirm. Do not set a '0-conf Limit' for more than you are willing to risk for the sake of facilitating small, immediate cash-out transactions.

Creating a Blockcypher account

Blockcypher's services are free for 15 confidence checks per hour. Beyond that, you may need to upgrade to a paid plan. Their portal will indicate how much your API token is being used.

To create an account, visit: https://accounts.blockcypher.com/signup

After confirming your email address, the main page of the Blockcypher portal will show your API token:

Enabling Blockcypher in the Lamassu Admin

Input this and a confidence factor threshold (0-100) into the Blockcypher option on the  'Settings > 3rd Party Services' panel. A confidence of 50 would be a reasonable value to start with.

If you are using bitcoind as your BTC wallet, you also have the option of lowering the confidence of deposits which have been flagged RBF. (These can be more easily diverted by the user away from your wallet and back to theirs before they confirm.)

Click the Save changes button.

Then, within the 'Settings > Wallet' panel, select Blockcypher from the dropdown menu on the 'Zero Conf' column, and click the Save button.

Now, future transactions for amounts below the 0-conf limit will have their confidence checked.

If you find that too many transactions with reasonable fees are flagged by Blockcypher, you can adjust the confidence factor downward.