What exactly is the reason bitcoin processes transactions so slowly?

[torba]

Slowly as in not comparable to say the transaction speeds you can accomplish with a credit card.
I've been searching for answer to this. Is there a specific component like network propagation that severely effects processing time?

[r3wt]

Slowly as in not comparable to say the transaction speeds you can accomplish with a credit card.
I've been searching for answer to this. Is there a specific component like network propagation that severely effects processing time?

encryption

[01BTC10]

Miners need to include the transaction in a block to confirm it. It takes times and processing power to find a 'block'. Average time between block is about 10 minutes.

https://en.bitcoin.it/wiki/Blocks

If you don't wait for any confirmation then the transaction is almost instant but is unsafe since it could be a double-spend. No confirmation transaction speed depend on network propagation.

[r3wt]

Miners need to include the transaction in a block to confirm it. It takes times and processing power to find a 'block'.

https://en.bitcoin.it/wiki/Blocks

If you don't wait for any confirmation then the transaction is almost instant but is unsafe since it could be a double-spend. No confirmation transaction speed depend on network propagation.

I wonder how credit card companies/banks avoid that issue

[torba]

Miners need to include the transaction in a block to confirm it. It takes times and processing power to find a 'block'.

https://en.bitcoin.it/wiki/Blocks

If you don't wait for any confirmation then the transaction is almost instant but is unsafe since it could be a double-spend. No confirmation transaction speed depend on network propagation.

I wonder how credit card companies/banks avoid that issue

Centralization

[r3wt]

Miners need to include the transaction in a block to confirm it. It takes times and processing power to find a 'block'.

https://en.bitcoin.it/wiki/Blocks

If you don't wait for any confirmation then the transaction is almost instant but is unsafe since it could be a double-spend. No confirmation transaction speed depend on network propagation.

I wonder how credit card companies/banks avoid that issue

Centralization

yeah, what i figured. i guess decentralization is a double edged sword. on the one hand no one can manipulate your balance(atleast not as easily) and steal your money, but on the otherhand it gives rise to the known security issues(such as double spend, and hackers trying to root your box and steal your shit)

[coinedBit]

Centralized serialization through atomic transactions.

[01BTC10]

Miners need to include the transaction in a block to confirm it. It takes times and processing power to find a 'block'.

https://en.bitcoin.it/wiki/Blocks

If you don't wait for any confirmation then the transaction is almost instant but is unsafe since it could be a double-spend. No confirmation transaction speed depend on network propagation.

I wonder how credit card companies/banks avoid that issue

Bitcoin is a trust-less decentralised network. Each client is responsible to verify the validity of each transaction.

CC company and bank are centralised entity. Each client rely on the CC/Bank to verify that the transaction is legitimate. The centralised nature of the network make it faster.

[r3wt]

Miners need to include the transaction in a block to confirm it. It takes times and processing power to find a 'block'.

https://en.bitcoin.it/wiki/Blocks

If you don't wait for any confirmation then the transaction is almost instant but is unsafe since it could be a double-spend. No confirmation transaction speed depend on network propagation.

I wonder how credit card companies/banks avoid that issue

Bitcoin is a trust-less decentralised network. Each client is responsible to verify the validity of each transaction.

CC company and bank are centralised entity. Each client rely on the CC/Bank to verify that the transaction is legitimate. The centralised nature of the network make it faster.

oh thanks

[r3wt]

Slowly as in not comparable to say the transaction speeds you can accomplish with a credit card.
I've been searching for answer to this. Is there a specific component like network propagation that severely effects processing time?

encryption

No. It is not because of encryption.

It is slower because a credit card transaction is sent to a central payment processor. Bitcoin's design purposely avoids having a central payment processor. There are several benefits, but the trade-off is that it takes longer to validate a transaction.

In the future, there will probably be services built on top of bitcoin that will enable nearly instant validation of transactions.

oh ok. makes sense. and yeah, i could totall see that happening.

[01BTC10]

Miners need to include the transaction in a block to confirm it. It takes times and processing power to find a 'block'.

https://en.bitcoin.it/wiki/Blocks

If you don't wait for any confirmation then the transaction is almost instant but is unsafe since it could be a double-spend. No confirmation transaction speed depend on network propagation.

I wonder how credit card companies/banks avoid that issue

Centralization

yeah, what i figured. i guess decentralization is a double edged sword. on the one hand no one can manipulate your balance(atleast not as easily) and steal your money, but on the otherhand it gives rise to the known security issues(such as double spend, and hackers trying to root your box and steal your shit)

Centralized system get hacked very often. The company usually pay for the theft but ultimately it's the client that pay the bill via higher fees.

[torba]

Slowly as in not comparable to say the transaction speeds you can accomplish with a credit card.
I've been searching for answer to this. Is there a specific component like network propagation that severely effects processing time?

encryption

No. It is not because of encryption.

It is slower because a credit card transaction is sent to a central payment processor. Bitcoin's design purposely avoids having a central payment processor. There are several benefits, but the trade-off is that it takes longer to validate a transaction.

In the future, there will probably be services built on top of bitcoin that will enable nearly instant validation of transactions.

"Services that enable instant validation", thats a really really interesting idea.

[01BTC10]

Instant validation are already implemented via green address: https://en.bitcoin.it/wiki/Green_address

[r3wt]

Slowly as in not comparable to say the transaction speeds you can accomplish with a credit card.
I've been searching for answer to this. Is there a specific component like network propagation that severely effects processing time?

encryption

No. It is not because of encryption.

It is slower because a credit card transaction is sent to a central payment processor. Bitcoin's design purposely avoids having a central payment processor. There are several benefits, but the trade-off is that it takes longer to validate a transaction.

In the future, there will probably be services built on top of bitcoin that will enable nearly instant validation of transactions.

"Services that enable instant validation", thats a really really interesting idea.

hell yeah it is. and in my opinion it will be services like that as well as simplified ease of mining and easy to use clients with short address support that will bring bitcoin into mainstream. the ease of use factor severely limits bitcoins. only nerds have heard of bitcoin.

[r3wt]

Instant validation are already implemented via green address: https://en.bitcoin.it/wiki/Green_address

ok, i hate to burst your bubble but  the point you just tried to make is a non point, in my opinion. Green Addresses offer zero security. Instead the type of service that ultimately wins out will become the frontend to the bitcoin world, while the miners and client as we know them will end up being the underlying support. what i'm talking about is say they call this new client e-dollars or something.


Person A logs into his e-dollar account and sends 5 dollars and hits send.

this info is sent to a bitcoin server that converts the 5 dollars into a btc amount and checks if there is enough funds in the account, and if so transfers the bitcoin amount from Person As Bitcoin Address to the Address of a second person, Person B.

A success code is relayed to Person A's client, telling him the transfer was a success and docking his account 5 dollars.

A payment code is sent to Person B's e-dollar client. 

Person B's e-dollar client accepts the payment and his balance is updated

[oatmo]

Litecoin generates blocks 4x as fast as bitcoin. If you want faster confirmations, just use litecoin.

Oatmo

[jackjack]

Litecoin generates blocks 4x as fast as bitcoin. If you want faster confirmations, just use litecoin.

Oatmo

Are you kidding or do you have no idea how bitcoin and copycats work?

[Mike Hearn]

I think we need an FAQ for this. Everything said so far in this thread is wrong.

Credit card transactions do not settle instantly. They clear (usually) weekly and can be reversed months later. What happens when you "pay" is simply that the merchant records an IOU. It takes a long time for the money to actually show up in their bank account.

You can accept a Bitcoin transaction instantly (unconfirmed) and it is dramatically safer than a credit card payment, regardless of what you may see claimed elsewhere on this forum.

Bitcoin clears payments faster than any other financial system I'm aware of except cash by orders of magnitude, and I do not anticipate that changing any time soon.

[piotr_n]

Slowly as in not comparable to say the transaction speeds you can accomplish with a credit card.
I've been searching for answer to this. Is there a specific component like network propagation that severely effects processing time?

The main factor is decentralization.
You cannot have both; decentralization and quick judgement on who is trying to double spend.
If you choose to go for the quick judgement way, then you will end up in hell. Where you come from, so no worries here.

[Peter Lambert]

Slowly as in not comparable to say the transaction speeds you can accomplish with a credit card.
I've been searching for answer to this. Is there a specific component like network propagation that severely effects processing time?

There are two things going on, the transaction must propagate through the network, and the transaction must be confirmed as valid. Both credit card and bitcoin transactions propagate almost instantly. For small purchases it could be acceptable to complete the transaction as soon as the bitcoins are seen with 0 confirmations. That is what credit card users do as well.

Bitcoins are confirmed when you get to the number of blocks you deem necessary, most places use 6 confirms, but I have seen 3 or 9 as well. Credit Cards, on the other hand, take much longer to fully confirm; the transaction can be reversed weeks later by the credit card company.