Hi, I am new here and already did a lot of reading on the bitcoin. One of the main issues I can't understand is why confirmation takes so long (yes, 2-3 minutes is a LONG time, not to mansion 6 confirmations which can take hours). In today's eCommerce system, when I pay for something, confirmation is instant i.e., I click "confirm" and I am done and can continue about my business.
You are mistaken. In today's eCommerce system, merchants are willing to accept a certain amount of risk to provide you with instant access even though the payment you have made will continue to be reversible (possibly for up to 18 months).
With bitcoin, how does it work? When I pay to a certain wallet,
You don't pay to a wallet. You pay to an address.
after how long can I be "sure" the payment arrived?
You will generally be sure that the transaction has been transmitted and seen by the network within a couple of seconds.
How long will I be hanging in the air until the transaction is complete?
It is up to the merchant how much risk they are willing to accept. Merchants wait 24 to 48 hours with credit cards before "settlement" when the money shows up in their bank account, even though they accept the transaction the moment they receive it. Beyond settlement, the transaction can be reversed for months. Bitcoin is much faster than this. The transaction is seen within seconds. The first confirmation happens on average in about 10 minutes, and within a few hours the merchant can be certain that the transaction won't be reversed.
What if I choose to make the transaction without a miner's fee?
It really depends on the details. How big is the transaction, how old are the coins, what is the value of the various outputs? There are several technical solutions to this issue, they simply haven't been implemented by miners and/or merchants yet. There is no reason to think that they won't be implemented eventually. A coupe possibilites are:
- Large scale merchants can start up their own mining operations or can contrat with other mining organizations to ensure that their transactions are confirmed as quickly as possible.
- Miners can look at fees on transactions that are built on top of unconfirmed transactions which would allow the recipient of a transaction to add their own fee to improve the odds of getting a confirmation.
What fee will make the confirmation instant?
None. The fastest that a confirmation can occur is the next solved block. The network adjusts difficulty to keep the average time between blocks close to ten minutes.
If I take it a bit further into the future and want to pay for my groceries in the supermarket, I can't hold the line waiting for a confirmation...
Certainly not, which is why the grocery store doesn't make you stand around in the line until 3am when they get their settlement from the credit card company. Instead they are willing to accept a small risk of theft and fraud for an increase in transaction speed and convenience. They take the cost of that fraud and bury it in the retail cost of the products they sell. There is no reason they can't do the same with bitcoin.
