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Author Topic: Bitcoin problems, can they be fixed?  (Read 438 times)
zerorbit (OP)
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November 25, 2013, 03:47:27 PM
 #1

It seems the confirmation time of 5-10 minutes would be a game ender for retail adoption. Waiting until your purchase is confirmed for that long doesn't seem plausible. Other alt coins seem to be trying to fix this issue, but can bitcoin change to fix itself?
DannyHamilton
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November 25, 2013, 06:10:34 PM
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Retailers don't have to wait for confirmation if they don't want to.

I frequently pay in a restaurant without the restaurant waiting for confirmation.  I simply place the cash at the table and leave.

Most retail establishments already accept a possibility of charges being reversed any time they accept electronic payment.  Credit card transactions are typically reversible for many months after they occur.

There are certainly methods that could be implemented to further reduce the risk.  Bitcoin (if it succeeds in reaching mainstream use) is likely to bring about a whole new paradigm in how people pay for purchases.  It is nearly impossible to guess what that new paradigm will look like.

One possibility would be for shoppers to create a transaction that places bitcoins "on deposit" with the merchant as they enter the establishment.  Then by the time they are done choosing their merchandise, the "deposit" transaction will have already received 1 confirmation.  The merchant can then send them back their change at checkout.

Another possibility is for someone to create a third party service. The service would be insured, regulated, and audited.  Users of the service would be provided an "account" where they could store some bitcoins.  The service would then enter into contracts with merchants to provide payment from their users.  Users could be supplied with a "payment card" that would have a mag stripe or an embedded chip to identify the user.  In this way the service would act much like a "pre-paid debit card".

Yet another possibility would be for large scale merchants to enter into contracts with the largest mining pools.  The contracts could stipulate that (for a reasonable fee) if the mining pool receives a transaction from the merchant that is a double spend of another unconfirmed transaction that the pool is working on, the mining pool agrees to confirm the transaction from the merchant instead of the other transaction.

These are just the first three ideas that come to mind.  It is likely that the solution that innovators and entrepreneurs settle on in the future will be something that none of us have even thought of yet.
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