2013-08-06 - CoinBase - Now supporting zero fee microtransations

[btceic]

You Can Now Send Micro-Transactions With Zero Fees

We launched an exciting feature today: off blockchain micro-transactions between Coinbase accounts!

Here is a bitcoin transaction I just sent myself for 1 satoshi (that is 0.00000001 Bitcoin).



The transaction:

arrived instantly
confirmed instantly
cost zero in fees
This was possible because it did not touch the “blockchain" (the public ledger of all bitcoin transactions), and instead was sent directly between two Coinbase accounts.

What does this mean?

Bitcoin is an incredibly efficient protocol for moving money with low fees.  However, it does have a “miner fee" ($0.05 - $0.01 at current exchange rates) if you want your transaction to be sent and confirmed quickly.

http://blog.coinbase.com/post/57483182558/you-can-now-send-micro-transactions-with-zero-fees

[empoweoqwj]

presumably it just means they have their own internal bitcoin accounting system, and bitcoins aren't being moved around at all. Its all intra-coinbase.

[bitfromit]

more offchain stuff.

[leemar]

This is really important, settlements between companies of scale that do this can solve the blockchain size issue unless I am mistaken.

[kokojie]

presumably it just means they have their own internal bitcoin accounting system, and bitcoins aren't being moved around at all. Its all intra-coinbase.

Exactly, this is a step in the right direction. We need more off chain transactions like this.

[bitfromit]

yes exactly

[greenbtc]

I don't see why this is good as all it is doing is creating transactions that can't be traced through the blockchain. Doesn't this allow for massive corruption?

[leemar]

If they are wise they will publish the transactions, so that  people can reconcile the transactions if they want to.

[greenbtc]

If they are wise they will publish the transactions, so that  people can reconcile the transactions if they want to.

Generally when people are given leeway not to do something, they generally don't do it. Overhead and all.

[leemar]

Coinbase's is primary value proposition in this early economy is based on being more credible than the opposition and they seem to be doing a pretty good job so far.  I think they have way to smart people working for them now to risk that, but it is  risk.

[justusranvier]

I don't see why this is good as all it is doing is creating transactions that can't be traced through the blockchain. Doesn't this allow for massive corruption?

Yes it does.

Giving third parties control over your private keys is always a bad idea.

[greenbtc]

I don't see why this is good as all it is doing is creating transactions that can't be traced through the blockchain. Doesn't this allow for massive corruption?

Yes it does.

Giving third parties control over your private keys is always a bad idea.

That's what I figured, just couldn't rationalize why everyone jumped on this as a good thing instead of the exact opposite.

[justusranvier]

That's what I figured, just couldn't rationalize why everyone jumped on this as a good thing instead of the exact opposite.

Because corruption is highly profitable.

[centove]

I don't see why this is good as all it is doing is creating transactions that can't be traced through the blockchain. Doesn't this allow for massive corruption?

Yes it does.

Giving third parties control over your private keys is always a bad idea.

That's what I figured, just couldn't rationalize why everyone jumped on this as a good thing instead of the exact opposite.

If I understood correctly, they function similar to the pools payout schemes... It collects the microtransactions up to a point then you can push that bigger transaction out to the blockchain. Prevents the spamming the blockchain with all these 0.00000001 transactions.

[vokain]

watch coinbase overtake paypal in 5 years, unless paypal does something different

[leemar]

watch coinbase overtake paypal in 5 years, unless paypal does something different

+1

[epetroel]

I believe Gox does this too.  At least that's what I noticed when I sent coins from my Gox account to a friends Gox account.  They never actually appeared in the blockchain and were received by him instantly.

[prophetx]

watch coinbase overtake paypal in 5 years, unless paypal does something different

you need something(s) to replace ebay... the HSN QVC of the internet age...