BIP0074 draft proposal (dynamic rate lookup)

[dave111223]

Please take a look at my BIP0074 draft proposal (this is my first one so may be incorrectly formatted)
https://github.com/bitcoincoltd/bips/blob/master/bip-00xx-dynamic-rate-lookup.mediawiki

This proposal will make it possible for a simpler form of Bitcoin payment at physical shop locations.

Currently when making a Bitcoin payment at a shop the merchant needs to have an app of some kind so that they can calculate the amount of bitcoins you need to pay them to cover your purchase (of for example: $9.99).

The problem is that many employees are not properly trained on the Bitcoin app, or the owner is the one with the app and he is often notthere.  When visiting "Bitcoin Accepting" estabishments you will often run into this problem.  The businesses often don't get enough Bitcoin business to warrant training sessions or dedicate hardware to run the app.

A simpler way to accept payments would be for the merchant to have a fixed QR code, and no app at all.  However a printed QR code can't calculate any exchange rates, and so it would be up to the customer to choose how much to pay.

This can result in some problems as the customer may be using their default wallet exchange rates, or their preferred international exchange. While the merchant may be actually using a local exchange or service to exchange the coins to local currency, and there may be some discrepancy between what the customer thinks the rate should be and what the merchant thinks the rate should be.

Enter BIP0074, so that the merchant can specify which exchange rates they are using, and the customer and then look up the rates from this source and pay according to these rates.

*Note: The merchant would need to use some 3rd party service to receive SMS transaction notifications to be sure that the customer had actually paid; assuming they did not have internet to check the blockchain and did not trust customer.

[kalon]

This BIP seems like it could also be usful in instances where automation is desired but without the need for dynamic qrcodes to be generated eg. vending machines and such.

[edmundedgar]

This is cool. I'm not normally a big fan of bitcoin for point-of-sale but where I think it's really nice is for trust-but-audit-or-shame scenarios. The classic one would be a bitcoin parking meter, consisting of... a QR code in front of the space.

That said, I wonder whether people would rather use this than just use the QR code to send the customer to a web page.

[dave111223]

That said, I wonder whether people would rather use this than just use the QR code to send the customer to a web page.

Sending the customer to a website is going to be quite a process for the customer.

For example instead of address + rate-lookup the QR code just contained a website URL then the customer is going to have to somehow get the information from the webpage back into their wallet app.

Let's compare the flow between using a wallet with BIP74 and using a QR with a website URL:

With BIP74:
- Customer scans QR code in wallet app (such as mycelium)
- Enters amount (ie $3 for parking)  
- Customer sends BTC (with BTC amount automatically calculated at the DRL rates)

With website redirect:
- Customer scans QR code
- Is redirected to a webpage with form to enter the amount
- Customer enters $3 for parking
- Webpage shows address and amount in BTC
- Customer now has to try to get the amount and address into their wallet app, but seeing as they are using the webpage and wallet on the same phone they cannot scan it so have to copy/paste this into between apps (PITA)
- Customer sends BTC

Not to mention that if each merchant has their own webpage for calculating the exchange rates the customer may not be familiar with the merchants system; there is going to be some confusion each time as to what they are supposed to do.  Whereas the Dynamic Rate Lookup is almost completely invisible to the customer, and they just use their wallet as they would normally use it.