Bitcoin Forum

As that aspect of Bitcoin severely limits it's "world currency status" potential. (If that is the direction that Bitcoin is heading or being pushed towards, that is.)

I would imagine that one transaction occurring every second would suffice for using Bitcoin as a replacement for the debit/credit/cash system.

If transactions can only be processed every 10 minutes: Bitcoin will be good for purchasing intangible goods and storing a value (http://en.wikipedia.org/wiki/Store_of_value) imho.

Blocks will never be created faster.


Not really. You don't have to wait for blocks, you just have to check that no double spending transaction was published at the same time. That way a transaction is verified in seconds.

When wallets become more widespread and trustworthy, the wallets could transfer money within themselves or to another wallet instantaneously though AFAICT.

Gluskab - You're probably referring to eWallets like MyBitcoin.com - you're correct that mybitcoin users can instantaneously send money to other mybitcoin users, and in the future it's likely that similar, interoperable services will arise.

see also, https://en.bitcoin.it/wiki/Myths#Point_of_sale_with_bitcoins_isn_t_possible_because_of_the_10_minute_wait_for_confirmation

I guess he spokes of private key transfer from one wallet to another => instant tranfer.

keypair transfers will probably be possible in the future, but they are not a secure way to move bitcoin.

Huh.  One-to-three day transfer times doesn't seem to have hurt the dollar much: http://www.depositaccounts.com/blog/inside-look-at-ach-transfer-speeds-at.html

"Instant" payments with world currencies is an illusion created by your bank of financial institution based on how much they trust the person or institution sending the money.  There is nothing stopping bitcoin financial institutions from using the same trick, and I think as the bitcoin economy grows and companies start to trust each other instant transfer times will happen.

It shows how much the Big 4* in Australia 'trust' each other... since there's no instant transfers between them even though it would be a trivial thing to set up. Amazing that it can still take 3 days in 2011.

*
National Australia Bank
Commonwealth Bank
ANZ
Westpac

Try 3 to 5 working days in the UK.

It typically takes three working days to transfer money between two different banks, assuming both banks are in the same "country" (e.g. both are in England, or both are in Scotland). If one was a Scottish bank (let's say the Clydedale Bank) and one was an English bank (let's say Yorkshire Bank) it would usually take a minimum of four working days.

And now the punchline: Clydesdale Bank and Yorkshire Bank are both subsidiaries of National Australia Bank.

So, I should be able to send instantly between Australia and Scotland.

How to set it up isn't even a secret... Western Union and Moneygram are obviously very capable.

I wouldn't count on it, and would recommend checking with NAB first (I assume you're sending from Oz?) That said, my experience of transfers between AUD and GBP is very positive - quicker than GBP transfers within the UK. The UK banking system seems to be more broken than the international banking system (if you can believe that...!)

I was kidding. If I asked NAB to do an instant transfer, they just laugh at me.

Ah, with you now. I suspect they could do it instantly, but they'd want a second mortgage and your first born child.

Slightly related: many, many years ago I had a communication problem with an Irish bank clerk. I wanted to know how long it would take for my cheque to clear. Eventually she snapped and explained that in Ireland they had these things called "computers" and as a result cheques cleared instantly. We're just phasing out cheques in the UK, just as it becomes possible for cheques to clear in less than three days - I suspect the UK has moved to steam-powered abacuses... :-)

I worked as an architect for the biggest subsidiary of Erste Bank Group (Europe), so I'm pretty familiar with the banking systems. I can say banks _want_ instant payments, but those systems are usually so old and inflexible that it isn't easily possible. I especially mean daily batch processing of payment queues between internal systemts etc. Thanks to their historical architecture, support for online transfers  == completely new implementation of core systems. So we're talking about milions or even bilions euros.

Younger banks are using newer technologies (obviously), so it's pretty common that small players have much faster payment processing.

I think there is something to be said for longer transactions. Banks really don't take 10 days to process a check from out of state or another country. It is done as soon as it is posted. They just hold the money in escrow to make sure everything is on the up and up. Then they give you the money. Of course they get to keep the interest from that escrow, which batched together over a large bank can be significant.

Personally I thing the decentralization and p2p nature of trades that take 10 minutes will provide a more stable system that is not inclined to be taken advantage of by "day traders" in the ForEx market. Today small differences in the Bid Ask price can be taken advantage of by instant trading. A difference of a couple pennies can be turned into a sustained flow of cash.

A person that has 10,000 shares of a stock with a Bid Ask difference of .02 slowly such our $2 per 100 shares, or $200 - $100 dollars for commissions = $100 profit. All within 10 minutes. So on an average workday, he could tons of profit.

It is the "New" buy low, sell high with instantaneous transactions.

Personally I don't like looking at the screen every second, so I look for Bid Ask difference of .10¢ or higher.

But if it took 10 minutes for transactions to be processed, this would not be feasible. Which I think is good for stability.

Without major modifications the average time between blocks will be 10 minutes. This does not mean that the average time from you making a transaction to it getting it's first confirm will necessarily be 10 minutes. This is because in the future when the fixed block reward is less important and fees are more important hashing power supplied will be variable and the more fee tx that are queued up they faster they get confirmed. There will probably be some time of day and day of week effects too, but maybe only minor. You can even have some control by offering a huge fee that will get previously marginally unprofitable miners to switch on.

Is there a time stamp of when the transfer was initiated?

I believe the client timestamps every transaction it receives at the time it first gets it.

No. The only timestamps in Bitcoin are in the blocks.

I was wrong - the client does add a timestamp to transactions it puts into its wallet. I was only looking at transactions as they appear "on the wire" - i.e. being broadcast just after they're created.

So is it possible to independently verify when someone initiated a transfer from the client?

I've thought about it too for when stores/fast food places start using Bitcoin. I think it could work. Say I go to a store. I have my smart phone with Bitcoin running. Since I would be used to buying stuff with Bitcoin one of the first things I would do is 'make funds available' for the store when I enter. The app would communicate with the store and get a unique address and I'd give a refund address. I'd then send a max amount I intend on spending. Send the BTC and start shopping. Then when I go to the checkout after the total is calculated the remainder is sent back. Something like that. If I didn't make enough available I guess I'd have to hang around. It would remind me to always over guess the amount so I don't wait next time. That way the user just has to trust the store and not the store trust everyone who enters. 

This is an interesting perspective.  BTC crushes similar systems with actual transactions.  10 minutes or an hour or whatever it takes, is far, far superior to the systems in place for actual transfers of money.  But of course it's often compared to the methods of instant transactions, which of course are not really instant, but can be instantly verified by the agencies that handle this.

This does leave a huge growth opportunity for the BTC economy to grow by having institutions being able to provide these services, and then square up at the end of the day/week/month.

But another question is, why does it have to be that way?  Was it based on technical limitations of having too many blocks if there was 1 per minute or 1 per second?  Is it possible to change the difficulty and rewards by making blocks more often if that was needed?  I'm sure there's a good reason.  It just is unfortunate that the model seems to have been based upon the outdated banking model rather than the more modern reality.  But even with a modern banking system, I can hand a cashier $10, and he gives me change and my food.  I can't hand him 10BTC and get change back for in person transactions.  BTC seems to serve a more niche need rather than being a full-service currency.  Which isn't a bad thing, but maybe it would have been nicer if it could handle such things.

It's to allow for high latency between nodes. If it was one minute, a few seconds of latency between ends of the network could give someone with good network resources a better chance of winning blocks, damaging the "one vote per CPU" principle.

Also, remember that a confirmation is valuable because it represents some CPU power. If it took a minute on average to get a confirmation, you'd have to get 10 confirmations to match the protection of a single 10-minute confirmation. 1-minute confirmations might even be less valuable than 0 confirmations in such a system because it could be cheaper for an attacker to solve the required number of blocks than to overcome the TCP network.

The only independent timestamp is the one in the block, since the transaction is only timestamped upon receipt, and that timestamp isn't shared with other clients.

The block timestamp will indicate a "not later than" date, i.e. it will indicate the latest time that the transaction could possibly have been created (within the margin of error allowed by Bitcoins, which is I believe two hours).

So, there's a service to offer - set up a reputable, highly-accurate timestamp service. Basically, as long as you ensure your workstation's clock is accurate, you could use the standard client, and charge someone a fee to "prove" the timestamp of the transaction. Of course, even then you'd be subject to network latency, so the timestamp will still have a margin of error, but it will probably be under a minute or two.

Perhaps the one vote per CPU principle is wrong.  Network speed is a hugely valuable part of the system.  I want those finding blocks to have fast connections.  I need to really put effort into understanding how someone could double-spend to really understand the problem well, though.

But perhaps it's better to think about BitCoin as a "between-bank" system for larger transfers done less often, rather than down to the individual.  You of course could do it down to the individual for transactions that may take a while and you don't care (which actually is a lot of them, any time someone writes a check, it's pretty much the same thing).  A separate solution would be needed for more instant purchases, which may be fine, but if you end up with 50 different implementations, it starts to look more like the current system, transaction fees will creep back in, etc...  But maybe that's ok.

You can just connect to the backbone nodes and verify that they have received and accepted the transaction you're interested in. If enough miners expose the fact that they are miners and let people check their tx acceptance easily, you can be pretty sure it'll confirm sooner or later, even if there are no confirmations.

Exception: Finney attack. Solution: don't rely on 0-conf spends for high value transactions.

Care to offer an alternative?

I'm just starting to understand how it works.  However, I don't think we should assume everything is perfect as is.

I, for one, never assumed that until after I understood the system, and realized it's elegance.  I seriously doubt that anyone can come up with a better system.

Really?  It might be the first time in the history of computer software that a 0.x release was perfect.

I'm not saying the design is perfect, but there's a big difference between the principle rules of the design and the actual coded and released software.

p.s. Can you design a better formula for the area of a circle than pie are squared?

We were not discussing the code, but the protocol.

10 Print "Hello World";
20 Goto 10


Hello World.bas v0.1   It was Perfect.  ;D

Even protocols are improved upon all the time.  They work *good enough* for a while, then someone comes up with something better.  I'm not trying to badmouth bitcoin.  Everything I've seen with it so far is *really* good.  But there's almost always room for improvement.  Unless you want to talk about trivial hello world programs.

No, not perfect.  Performance is not optimal, for example (it might be for Basic).  Plus the semi-colon is valid syntax?   If you want to get into nittery, I can too.