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Bitcoin blocks take ten minutes on average, and prudent recipients wait for multiple confirmations before considering a transaction final. For many applications—exchanges, point-of-sale, real-time trading—this latency is prohibitive. Kontor’s optimistic consensus provides intra-block confirmations while preserving Bitcoin as the ultimate source of truth. This is possible because stateful metaprotocols have an extra degree of freedom that Nakamoto consensus leaves unspecified: the ordering of transactions within a single Bitcoin block. Two transactions that modify the same contract state produce different results depending on which executes first. Since all transactions in a block appear to the network simultaneously, this ordering is semantically arbitrary—it must be resolved by some rule, but the choice of rule is up to the metaprotocol. Rather than waiting for Bitcoin confirmation to determine ordering, a network of KOR stakers runs BFT consensus to produce signed transaction batches that assign deterministic positions before Bitcoin confirmation. Users can transact with confidence after batch inclusion—typically within 1–2 seconds—because the ordering is already fixed. When the underlying Bitcoin transaction eventually confirms, execution proceeds at the pre-assigned position.

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A Virtual Prediction Market

When stakers sign a batch, they are participating in a virtual prediction market. Each signature is a prediction backed by slashable collateral: “these transactions will confirm on Bitcoin without conflict before this batch expires.” The staker is betting their capital on this outcome. If the prediction holds—the batched transactions confirm normally on Bitcoin—stakers earn fees and protocol emissions. If the prediction fails—a conflicting transaction confirms on Bitcoin instead—the batched transactions are rolled back and stakers are slashed. This creates strong economic incentives for stakers to only sign batches they believe will succeed. The market structure provides several properties: Economic finality. When a quorum (>2/3 of total stake) signs a batch, the transaction has economic finality proportional to the total stake at risk. Recipients can calibrate their acceptance threshold based on transaction value—small payments may accept minimal stake backing, while large transfers may require the full quorum. Measurable risk. Unlike vague “pre-confirmation” signals, optimistic consensus makes the remaining risk explicit and quantifiable. The stake backing each batch is public. The slashing conditions are deterministic. Recipients know exactly what is at risk and can make informed decisions. Graceful degradation. If stakers fail to reach consensus, or if the staker network goes offline entirely, transactions still confirm on Bitcoin normally. Unbatched transactions execute at block-end using standard lexicographic ordering. The staker layer accelerates finality but never blocks it.

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Protocol Flow

  1. User submits transaction. The user broadcasts their Kontor transaction to the staker network (and to Bitcoin).
  2. Stakers validate and batch. Stakers validate the transaction and include it in the next batch via BFT consensus.
  3. Quorum signs batch. A quorum of stakers (>2/3 of total stake) signs the batch, each committing slashable stake on the batch’s success.
  4. User receives confirmation. The signed batch assigns the transaction a deterministic position. The recipient can now treat the transaction as confirmed, backed by the bonded stake.
  5. Bitcoin confirmation. When the transaction confirms on Bitcoin, it becomes Batch-Confirmed—both batched by stakers and confirmed by Bitcoin. The transaction executes at its batch-assigned position.

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Ordering

Each transaction in a batch receives a position: (batch_id, index). Positions are totally ordered—earlier batches come first, and within a batch, earlier indices come first. Execution proceeds strictly by position, ensuring deterministic execution order even as transactions confirm on Bitcoin out of order. Unbatched transactions (those that confirm on Bitcoin without being batched) execute at “block-end”—after all batched transactions, ordered by their position within the Bitcoin block.

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Conflict Resolution

Bitcoin is the ultimate arbiter. When a batched transaction confirms on Bitcoin, it becomes Batch-Confirmed and executes at its assigned position. If a conflicting transaction confirms instead (one that spends the same inputs), the batched transaction is rolled back and stakers who signed the batch are slashed.

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Security Guarantees

The protocol’s core properties have been formally verified: Safety. No two valid batches contain conflicting transactions, under honest supermajority (>2/3 stake). This follows from quorum intersection: any two quorums overlap in at least 1/3 stake, and honest stakers refuse to sign conflicting batches. Liveness. Valid transactions are eventually included in batches. If stakers fail to reach consensus, transactions still confirm on Bitcoin and execute at block-end. Accountability. Any safety violation is attributable to at least 1/3 of total stake with cryptographic evidence—the violating stakers’ signatures on conflicting batches serve as proof.
For the complete specification, see Optimistic Consensus Specification.