Instant payments made easy

[qwk]

What if...

i made myself a couple of instawallets https://www.instawallet.org, transferred
0.1 btc to some of them
0.01 btc to a few others

Now, whenever i want to make an instant payment to somebody, i don't do a bitcoin transfer to his address.
No, i give him the address of a couple of my instawallets, matching the amount to be paid.
Let's say, i owe him 0.11 btc, i'll give him the address of one 0.1 and of one 0.01 wallet.

He takes those addresses and transfers the btc in there to his personal btc address.

Even though i still know the instawallets address, i am no longer able to doublespend, as would be possible with a "normal" btc transfer (well, as long as i'm not the owner of instawallet, of course).

That way, instant payment by bitcoins is possible.


It could even be easily automated.
I would store the addresses of my instawallets on my smartphone, handily sorted in an app, according to their value.
I would simply have to enter the amount to pay, and the app could produce a barcode with the required addresses for the according instawallets, which the other guy could scan with his own smartphone (might do it by bluetooth as well, but i like barcodes).

The only problem i see is, the recipient of the instawallets would have to trust the instawallet service.


When you think about it, each single instawallet i created actually is a kind of "coin" in its own right.

So, probably it would be best to use instawallet sizes of
0.01
0.02
0.05
0.1
0.2
0.5
just like with regular coins.


What do you think about that idea?

[1714830210]

1714830210

[Andrew Vorobyov]

This is great...

You just went little bit over with it..

Suppose I need to pay you 0.27 BTC. App creates account with such balance and transmits password.

On the other side - app gets password and automatically transfers bitcoin to recepient address.

Inside one wallet you can create such accounts instantly without confirmations IMHO.

[qwk]

Suppose I need to pay you 0.27 BTC. App creates account with such balance and transmits password.

That would no longer be instant. Because you would have to transfer the 0.27 BTC to that specific instawallet before the trade could take place, so you would not have gained any time advantage over a direct transmission.

On the other side - app gets password and automatically transfers bitcoin to recepient address.

Inside one wallet you can create such accounts instantly without confirmations IMHO.

Ah, okay, now i understand, but that would require a specific implementation on the side of instawallet, right?

My approach would be easy to implement without any changes to instawallet whatsoever.

[giszmo]

any escrow can do instant payments. that's not really news to me. instawallet will love your "innovation" but ok I have one improvement: instawallet gives you a read-only link to every wallet.

read only links would actually be a product i would sell if i were them.

i have a doodle-like product where i do it that way:
http://www.fluxday.com/izUlfYKWoJ6rp - this is what the "sender" sees. he has control.
http://www.fluxday.com/Ttmsc4uwMsUWgro - this is what the "recipient" sees. he can check what happened but not influence it.

for instawallet you could hide the balance, generate a ro-link for every transaction, ...

[qwk]

any escrow can do instant payments. that's not really news to me.

Correct, but the problem with most escrows is that both parties would be required to have some kind of account with them.
In my scenario, both parties would only be required to know and to a certain extent trust the escrow.

instawallet will love your "innovation" but ok I have one improvement: instawallet gives you a read-only link to every wallet.

read only links would actually be a product i would sell if i were them.

i have a doodle-like product where i do it that way:
http://www.fluxday.com/izUlfYKWoJ6rp - this is what the "sender" sees. he has control.
http://www.fluxday.com/Ttmsc4uwMsUWgro - this is what the "recipient" sees. he can check what happened but not influence it.

That would be a great improvement, i totally agree. I hope to see some instant wallet service include that.

for instawallet you could hide the balance, generate a ro-link for every transaction, ...

Why hide the balance?

[qwk]

I just made an "instant payment bill" for 0.01 btc.
It's not ideal, probably it would be better to have two sides, one with a read-only link to the balance and the deposit address, and the other with the cash-in address.
But this thing works, as a principal concept.

It would for example be possible to insert this paper thingy the size of a business card into a vending machine, that reads the code, and has the instant payment done automatically.

Internet connected vending machines, here we come.

BTW, that bill is loaded, so get yourself those 0.01 btc!  
(I just scanned this thing right of the screen with my iphone, and had instant access to that wallet. works perfect)

[giszmo]

BTW, that bill is loaded, so get yourself those 0.01 btc!  

it is. unfortunately my cellphone has no idea of my wallet and my wallet can't read QR. I leave the 14ct to others

[giszmo]

Why hide the balance?

ok i normally don't tell people how much i got in my physical wallet and same goes with the btc wallet or instawallet. so if instawallet provided a screen after sending like:

0.57BTC sent to xyz. Transaction link:
people could instantly get access to this exact instawallet transaction themselves and check if I only made it up.
sharing sensitive information like prior transactions or my balance is not necessary.

[bitlotto]

OR you could use something like BOTG. Bitcoin Off-The-Grid and create a key/address. Print/Write it out. Then send some money to that address. All you have to do is give them the key/address and it will be there. No need to trust any other party. (For now, until the feature is added into mainline Bitcoin, it can take a bit of tweaking to import keys...)

[qwk]

OR you could use something like BOTG. Bitcoin Off-The-Grid and create a key/address. Print/Write it out. Then send some money to that address. All you have to do is give them the key/address and it will be there. No need to trust any other party. (For now, until the feature is added into mainline Bitcoin, it can take a bit of tweaking to import keys...)

Ok, i looked into BOTG, that is of course a good way to go, especially when larger amounts are to be transferred.
What i am suggesting is a very simplistic approach, where you could use a very simple webservice to produce a kind of one-way-banknotes.
The webservice would be very easy to implement, usability would be high even for absolute non-techies, and only a minimum of trust in the escrow service is needed, because you would only actually load your banknotes for a short time, prior to usage. Even if your "hardware" wallet with those paper banknotes in it burns up or is stolen, it would be easily possible to back out the money that was in that wallet. And yet, instant payments for the merchant would be easy to accept.

[qwk]

BTW, who took the 0.01 btc out of the instawallet?
How did you do it? iphone?
Do you think it was an easy way to get to that money?
I'm really interested, because that's what payment receivers would feel like with this...

I'll also reload this banknote with another nifty 0.01 btc, go ahead, collect it, but please, write about your experience here

[giszmo]

grml. the last recipient had the link still in the history ... no money there.

my approach now was to scan the code with my android, in the scanning app click at send by email, save the mail as draft, open the draft mail on the pc ... to see a balance of 0.

[qwk]

grml. the last recipient had the link still in the history ... no money there.

Right now it's there 

my approach now was to scan the code with my android, in the scanning app click at send by email, save the mail as draft, open the draft mail on the pc ... to see a balance of 0.

Ok, way easier with the qr-scanner app on my iphone, just scan and it opens the browser, right on target.

[giszmo]

grml. the last recipient had the link still in the history ... no money there.

Right now it's there 

Either I was blind (don't use instawallet yet) or you recharged now. Most likely I was blind.

my approach now was to scan the code with my android, in the scanning app click at send by email, save the mail as draft, open the draft mail on the pc ... to see a balance of 0.

Ok, way easier with the qr-scanner app on my iphone, just scan and it opens the browser, right on target.

Well I had to somehow get my bitcoin address together on one machine with your instawallet url. Else open in browser works of course, too.

[netrin]

No version proposed is practical nor instant. The recipient would have the same burden of confirmation/trust as today. There is nothing preventing the 'sender' from racing the recipient to cash out the instawallets. And with dozens of transactions required, I'd just as soon trust a 0/confirmed transaction or just wait ten minutes.

Expecting the use of the same service is not bad. If I could easily transfer from your instawallet/mybitcoin to my own account immediately, then that's great. If we don't both have instawallet/mybitcoin accounts, fine, I just have to wait for confirmation or trust you.

A different approach would use a system similar to instawallet whereby passwords could be easily changed. The sender gives the password to the recipient who changes it. Now we move the burden of trust from the sender to the service.

The only use case I can come up with for this is my trek across the arctic or sahara sans computer, batteries, whereby I might need to use bitcoins in some village, where of course they exclusively use bitcoins.

[qwk]

No version proposed is practical nor instant. The recipient would have the same burden of confirmation/trust as today. There is nothing preventing the 'sender' from racing the recipient to cash out the instawallets.

There is. I will only accept the payment if i receive the confirmation from the wallet service that the btc have been transferred to my btc address. The buyer may outrace me, but i won't accept his payment then.
The only one who could "outrun" me is the instant wallet service. That's why i would have to trust them for a limited period of time.

And with dozens of transactions required, I'd just as soon trust a 0/confirmed transaction or just wait ten minutes.

My proposed approach is applicable for vending machines. Ten minutes wait are not acceptable for them.

Expecting the use of the same service is not bad. If I could easily transfer from your instawallet/mybitcoin to my own account immediately, then that's great. If we don't both have instawallet/mybitcoin accounts, fine, I just have to wait for confirmation or trust you.

The idea behind my approach is: you don't have to have an account at the instant wallet service. Not the buyer, not the seller.

The buyer creates instant wallets anonymously some time before he intends to spend the money. Just like you would go to an ATM and fetch some paper-money for your leather-wallet before going out for a drink.
You don't have to have an account with the ATM bank, your regular credit card, whatever, will do.
You have to trust the ATM on the other hand, so you will look for an ATM of a well-known institution.
The same goes for instant wallet services in this scenario. You would not randomly pick one, but you would use one with a good reputation.

The seller on the other hand is required to trust the exact same instant wallet you chose before. So much more motivation for the buyer to use a well-known-big-name-instant-wallet.
The seller does not have to have an account with them. It's more like a cash cheque. If that cheque is issued by some fishy bank, whose name i never heard of, i probably won't accept it. But from a reputable bank with a good name, why not? I don't have to have a bank account to cash that in, i only need to know and trust the cheque issuing institution.


It all boils down to this:
Seller and buyer have a strong motivation to use an instant wallet service that is well-known and has a good reputation.
A seller would probably have some list of acceptable wallet services. The buyer would most likely just stick with the one service he likes best, as long as that has wide acceptance.

A different approach would use a system similar to instawallet whereby passwords could be easily changed. The sender gives the password to the recipient who changes it. Now we move the burden of trust from the sender to the service.

Yes, that would have the exact same effect as my approach. It's a little less practical because you would not want to use one standard password for all of your payments, but it would be all the more impractical to have a list of passwords.


(quoted image removed for better readability)

The only use case I can come up with for this is my trek across the arctic or sahara sans computer, batteries, whereby I might need to use bitcoins in some village, where of course they exclusively use bitcoins.

Think vending machines. A banknote-accepting reader would be easily modified to read this thingy.
But of course, as long as you have a smartphone, it really is not necessary, i totally agree.

[netrin]

The only one who could "outrun" me is the instant wallet service.

Fair enough, we don't trust consumers, but we can trust Instawallet Inc because they have a physical address.

Seller and buyer have a strong motivation to use an instant wallet service that is well-known and has a good reputation.

And the wallet service protects your bitcoins, loans them out, and even pays interest. Fantastic!

The only use case I can come up with for this is my trek across the arctic or sahara sans computer, batteries, whereby I might need to use bitcoins in some village, where of course they exclusively use bitcoins.

Think vending machines. A banknote-accepting reader would be easily modified to read this thingy.
But of course, as long as you have a smartphone, it really is not necessary, i totally agree.

Certainly coins and paper money are convenient. I'd much rather a bitcoin-mint printing counterfeit resistant coins with an address that I can confirm online. Your proposed system has only practical value early in the adoption curve. Passive debit cards and accounts would give everything you require except the fear of centralization, fractional reserve, etc, which few people care about, certainly not in comparison to the convenience of a small vending machine purchase.

[qwk]

The only one who could "outrun" me is the instant wallet service.

Fair enough, we don't trust consumers, but we can trust Instawallet Inc because they have a physical address.

It is up to you to trust/distrust Instawallet Inc. I wouldn't necessarily trust them for larger amounts over prolonged periods of time.
For the usual amount of cash i carry around, i sometimes even trust some cloakroom attendant i've never met before.

Seller and buyer have a strong motivation to use an instant wallet service that is well-known and has a good reputation.

And the wallet service protects your bitcoins, loans them out, and even pays interest. Fantastic!

Sarcasm aside, i think you still don't want to understand, i'm not talking about a wallet service that will store your bitcoin fortune for you instead of you keeping your own wallet.dat. I'm talking petty cash for a day or two.
I doubt that it would be efficient for a business to give loans based on that. I would expect fees, though, if this became a working business.

Certainly coins and paper money are convenient.

Agreed.

I'd much rather a bitcoin-mint printing counterfeit resistant coins with an address that I can confirm online.

Agreed. But, a "factory", "mint", whoever produced those coins, would have to charge a substantial fee for them. Producing hard-to-counterfeit coins or banknotes is expensive.

Your proposed system has only practical value early in the adoption curve.

I totally agree that this is meant for early deployment. Whether the advantages of this system still remain, once we have a strong payment infrastructure, is a completely different question. I tend to answer that question with a cautious "yes".

Passive debit cards and accounts would give everything you require except the fear of centralization, fractional reserve, etc, which few people care about, certainly not in comparison to the convenience of a small vending machine purchase.

Debit cards usually require a huge infrastructure on the side of the merchants. With that comes a strong motivation for centralization. Think about credit cards, how many cards does your local retailer accept? VISA, MASTER, AMEX, i guess? Maybe a handfull more, but probably at high fees.

Fractional reserve will always be an issue with payment systems. But, being companies with a strong motivation to stay in business for a while, they tend to abide by the law. Depending on their local laws, fractional reserve may or may not be legal for them. It's your choice whether you will go with a bank or a "pony express".