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Author Topic: Isn't the transaction delay very unpractical for over-the-counter sales?  (Read 1074 times)
DDreez
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June 24, 2011, 11:12:12 PM
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Will there be a way to speed transactions confirmations up? Will Bitcoins ever be practical for use in stores, markets or private quick transactions IRL via say your cellphone?
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dutt
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June 24, 2011, 11:15:33 PM
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I think the wiki said that confirmations aren't that big of a deal for small amounts. More info can be found here:

https://en.bitcoin.it/wiki/In-store_Transactions
https://en.bitcoin.it/wiki/FAQ#Do_you_have_to_wait_10_minutes_in_order_to_buy_or_sell_things_with_BitCoin?

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June 24, 2011, 11:43:15 PM
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0/conf will work for retail transactions.  I bet the rate of people using a double-spend technique to screw people out of money would be roughly equivalent to the rate of people using counterfeit bills for a cash transaction.  And whoever the retailer is can use security cameras or other techniques to track the perp down and prosecute them.
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June 24, 2011, 11:54:56 PM
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0/conf will work for retail transactions.  I bet the rate of people using a double-spend technique to screw people out of money would be roughly equivalent to the rate of people using counterfeit bills for a cash transaction.  And whoever the retailer is can use security cameras or other techniques to track the perp down and prosecute them.

...unless you're buying something expensive, like a big-screen TV.
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June 24, 2011, 11:56:34 PM
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But the _real_ unpractical bit is that you need a Bitcoin client connected to the network to spend Bitcoins. Cell phones don't have the bandwidth to be constantly downloading everybody's blocks.
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June 24, 2011, 11:57:20 PM
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0/conf will work for retail transactions.  I bet the rate of people using a double-spend technique to screw people out of money would be roughly equivalent to the rate of people using counterfeit bills for a cash transaction.  And whoever the retailer is can use security cameras or other techniques to track the perp down and prosecute them.
Ok so maybe not a big problem then after all. Thanks for thr quick answer.
DDreez
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June 24, 2011, 11:59:09 PM
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Will there be a way to speed transactions confirmations up? Will Bitcoins ever be practical for use in stores, markets or private quick transactions IRL via say your cellphone?

Bitcoin will never be practical for use IRL.


At least not until they come up with some real simple and smart mobile apps I guess.
DDreez
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June 25, 2011, 12:01:50 AM
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But the _real_ unpractical bit is that you need a Bitcoin client connected to the network to spend Bitcoins. Cell phones don't have the bandwidth to be constantly downloading everybody's blocks.


How much data are we talking about here? You "only" need to sync whatever's been added since the last time you used the client right?
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June 25, 2011, 12:05:50 AM
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0/conf will work for retail transactions.  I bet the rate of people using a double-spend technique to screw people out of money would be roughly equivalent to the rate of people using counterfeit bills for a cash transaction.  And whoever the retailer is can use security cameras or other techniques to track the perp down and prosecute them.

...unless you're buying something expensive, like a big-screen TV.
Are you really willing to risk jailtime to try and steal a couple grand from a retailer who probably has security cameras aimed at your face?

Besides, retailers expect a certain percentage of fraudulent transactions with all current transaction methods.  Credit cards (chargebacks), checks (NSF), cash (counterfeit), etc.  As long as that percentage doesn't increase with bitcoins, they'd probably be fine with it.
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June 25, 2011, 12:13:12 AM
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0/conf will work for retail transactions.  I bet the rate of people using a double-spend technique to screw people out of money would be roughly equivalent to the rate of people using counterfeit bills for a cash transaction.  And whoever the retailer is can use security cameras or other techniques to track the perp down and prosecute them.

Plus, with online wallets like MyBitCoin, if you trust them and their API, you can have 'instant' transfers and all payments can be forwarded to a different address so I think the practicality of instant payments can be solved via the market even though there is the problem built into the BitCoin software. Heck, banks do not settle for over 24 hours with leads to Herstatt risk (after the German bank regarding settlement risk issues and time zones).

edd
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June 25, 2011, 12:16:46 AM
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0/conf will work for retail transactions.  I bet the rate of people using a double-spend technique to screw people out of money would be roughly equivalent to the rate of people using counterfeit bills for a cash transaction.  And whoever the retailer is can use security cameras or other techniques to track the perp down and prosecute them.

...unless you're buying something expensive, like a big-screen TV.
Are you really willing to risk jailtime to try and steal a couple grand from a retailer who probably has security cameras aimed at your face?

Besides, retailers expect a certain percentage of fraudulent transactions with all current transaction methods.  Credit cards (chargebacks), checks (NSF), cash (counterfeit), etc.  As long as that percentage doesn't increase with bitcoins, they'd probably be fine with it.

Even if the percentage does increase, the savings on credit card processing should balance at least some of it. In any case, these expenses just get passed along to the customer.

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June 25, 2011, 12:19:10 AM
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somebody has suggested the idea of "proxy bitcoins", another digital currency that is simply backed up by bitcoins as the "hard currency".

e.g. you deposit bitcoins into a proxy-account and whenever you need to do fast transactions (like POS/point of sale) the proxy-service immediately transfers your proxy-bitcoins to the sellers proxy-account. this would have to be a widely accepted service or standard to be practical.

anything from over-the-counter sales to mobile phone or device-to-device transactions would then be possible with no delay.

that proxy currency would still look and feel like actual "bitcoins".

it's probably gonna happen.

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June 25, 2011, 12:27:44 AM
 #13

In the future I think it could be doable.
A way it could work is when someone enters a store or is planning on buying something they use their smart phone and access the stores website. They then pre-load any amount into an account. Once they are done shopping the store then refunds the difference. If they don't want anything they just empty the account back to themselves. Using smart phones and some type of scanner to scan a picture/text on the smart phone it could probably work. The store wouldn't have to worry about being ripped off and the customer would be the only one taking a risk but people would be ok trusting big stores with a bit of BTC.

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Michiko
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June 25, 2011, 09:21:29 AM
 #14

0/conf will work for retail transactions.  I bet the rate of people using a double-spend technique to screw people out of money would be roughly equivalent to the rate of people using counterfeit bills for a cash transaction.  And whoever the retailer is can use security cameras or other techniques to track the perp down and prosecute them.

Plus, with online wallets like MyBitCoin, if you trust them and their API, you can have 'instant' transfers and all payments can be forwarded to a different address so I think the practicality of instant payments can be solved via the market even though there is the problem built into the BitCoin software. Heck, banks do not settle for over 24 hours with leads to Herstatt risk (after the German bank regarding settlement risk issues and time zones).

I can imagine markets where instantaneous confirmation would be absolutely crucial. Less critical when you can delay shipping something physical via mail, or offering the client who just bought that mega flat screen TV a coffee and a seat. But how about prediction markets or betting exchanges settled in BTC? Here the counterparty wants to know immediately if the deal will go through, otherwise the price might have changed once they realise they need a new match on the exchange for their deal.

I don't understand how that proxy-bitcoin concept would work in reality - either it is doing the same thing as Bitcoin and is slow, or I have to trust it (for small amounts) and then I could simply use small Bitcoin transfers?

Somehow banks delaying payments for 2-3 business days (for technical reasons, if you are one of the many dud banks with ancient systems, or because you just happen to like your free lunch:) should not be the benchmark for Bitcoin. Wasn't the key concept that it is a lot faster (as long as you need to be convinced by confirmations) and doesn't require specific trust in one specific, reputable 3rd party (like Mt Gox or Gavin), only the nodes?


edd
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June 25, 2011, 05:46:15 PM
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Wasn't the key concept that it is a lot faster (as long as you need to be convinced by confirmations) and doesn't require specific trust in one specific, reputable 3rd party (like Mt Gox or Gavin), only the nodes?

That's the trade-off: decentralization means verification can only be through the nodes, which requires some time. This is also why transaction fees are still a necessary evil, even with bitcoins; miners need some kind of incentive to process the blocks. Maybe once all the BTC have been mined transactions can be verified more quickly.

Still around.
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