If confirmation takes 10 minutes, how will I buy coffee at Starbucks?

[botolo86]

Fellow Bitcoiners,

This is something I don't understand. In order to be sure that a bitcoin transfer is successful, you have to wait for a confirmation. Standard market practice is to wait for 3 confirmations. A confirmation takes 10 minutes on average.

If bitcoin becomes massive, how will I buy a coffee at Starbucks? Will I have to pay with bitcoins and then wait 10/30 minutes before picking up my coffee?

[msc]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

[jdbtracker]

Don't forget that the transactions are instant... and I also hope that the Mining farms somehow start implementing a system that uses the fees to trigger the full strength of their cluster to be active. Once the transactions get saturated and fees start increasing rev up the farm; With this method, 2016 blocks wouldn't move the difficulty much if for only 2 hours a day the ASIC farms are roaring at full force, it could drop the transaction confirmation time from 10 minutes to under a minute when needed.
But of course this is difficult to implement when everyone is fighting for a piece of the pie.

[DeathAndTaxes]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

[Exentric]

I guess that more and more of the computing power mining new bitcoins today will be used to confirming transactions in the future, thus speeding up the process.
And you Also have services as bitpay.com paying the business you buy from in FIAT.

[Kazimir]

This is something I don't understand. In order to be sure that a bitcoin transfer is successful, you have to wait for a confirmation.

No true, that's only with huge transactions.

Quoting myself from another thread:

Common misconception, but Bitcoin transactions are instant.

It's only the confirmations that take some time. Confirmations is what makes a transaction 100% irreversible. But nowadays, for regular payments of 'normal' amounts (up to a few thousand $) it's completely safe to accept a payment as soon as it appears in the network (and has enough tx fee).

With todays network strength it's pretty much impossible (not to mention way, WAY too expensive) to successfully forge a valid looking transaction (thus it gets propagated through the network) that doesn't get confirmed. Only in order to accept or trust payments for BIG amounts, e.g. when literally sending tons of money around, you better await a few confirmations.

So, in most situations it's perfectly valid to say that Bitcoin payments are already instant. NOT 10-60 minutes!

and

Oh, one more thing. As for the so called 'faster processing' of altcoins with shorter block times: this is a delusion.

In the end, the certainty of a transaction is related to the amount of processing power that would be required to successfully forge it. You may think that for example Litecoin is 'faster' because it finds blocks 4 times as fast, but it would also require 4 times as much blocks to get the same amount of certainty - that is, if the total network power were equal. And the latter is not the case by far, the Bitcoin network harnesses much, MUCH more hashing power than all other altcoins combined.

So, when comparing the speed of processing transactions, not in terms of 'number of confirmations' but in terms of actual certainty and trustworthiness, Bitcoin is a few miles ahead.

[FiatKiller]

You are also forgetting that they may use a 3rd party vendor who assumes that risk as part of their fee.

[hilariousandco]

I think a more important question here is why are you buying coffee at Starfucks?

[Rannasha]

I guess that more and more of the computing power mining new bitcoins today will be used to confirming transactions in the future, thus speeding up the process.

Mining new bitcoins and confirming transactions are both results of the same process. It's not one or the other, it's both at the same time (or rather: the former is a reward for the latter).

[VforVictory]

I guess that more and more of the computing power mining new bitcoins today will be used to confirming transactions in the future, thus speeding up the process.
And you Also have services as bitpay.com paying the business you buy from in FIAT.

This assumes that there is a limitless supply of electricity/power, and that it doesn't sky rocket in price.

[jdbtracker]

I was also thinking that there are BTC giftcards you could use, BTC credit cards as well, Bitpay of course, escrow services, etc lots of different methods to mitigate the risk of a double spend.

There is a method for spreading locked pre-sized BTC amounts described by Adam3us, the original creator of hashcash. Check out some of his posts, very interesting stuff.

[Peter R]

Fellow Bitcoiners,

This is something I don't understand. In order to be sure that a bitcoin transfer is successful, you have to wait for a confirmation. Standard market practice is to wait for 3 confirmations. A confirmation takes 10 minutes on average.

If bitcoin becomes massive, how will I buy a coffee at Starbucks? Will I have to pay with bitcoins and then wait 10/30 minutes before picking up my coffee?

Once you've used bitcoin for a while, it becomes pretty clear that zero-confirmation transactions are suitable for most purchases.  These are picked up by the network faster than the time it takes a debit or credit card transaction to be approved.  We have several brick-and-mortar business in Vancouver accepting bitcoin (via BitPay) and it is standard practice to consider the invoice "paid" as soon as the network picks up the valid transaction.  

If there was something "wrong" with the transaction, it won't propagate through the network and you'll never see it posted.  If someone "double spends" the transaction, then there will be a big glaring warning (e.g., on blockchain.info) that says "DOUBLE SPEND DETECTED".  Furthermore, he would need a special custom app on his phone to even attempt a double spend.  The double spend attempt would be obvious since the network would detect it, and he'd look like a thief in front of the whole store and never receive that latte he was hoping to scam.

[beetcoin]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

well, there's a 3rd party ensuring that you won't be scammed (when using a credit card). with bitcoin, there's only you and the provider.

[msc]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

well, there's a 3rd party ensuring that you won't be scammed (when using a credit card). with bitcoin, there's only you and the provider.

Credit cards don't protect the merchant from getting scammed.  If you make a purchase and then report the card stolen, they'll steal the money back from the merchant so they can repay the cardholder.

In short, credit cards are safer for consumers, but Bitcoin is safer for merchants.

[wickedgoodtrader]

However with people holding a lot of money in BTC, they very well may want to make many big purchases with their BTC. This could allow them to slide under the radar and not pay taxes on money they've "cashed out". This is where the slow transaction times is an issue.

[CoinDiver]

GOOD FOR THEM!

I think a more important question here is why are you buying coffee at Starfucks?

[BradZimdack]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

Although most of our chargebacks do come through within 6 months, we have occasionally received them after a full year.

[justusranvier]

I think a more important question here is why are you buying coffee at Starfucks?

Good for them.

[hilariousandco]

You think Starbucks paying zero tax whilst the ordinary people pay on their minimum wages is good?

[Ecurb123]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

This is correct, and who knows if this isn't workable, maybe bitcoins will not be for buying coffee.

[xzempt]

I think a more important question here is why are you buying coffee at Starfucks?

do they not have sales tax in the UK on coffee.... so the government is getting tax revenues.... from you....

[wachtwoord]

GOOD FOR THEM!

I think a more important question here is why are you buying coffee at Starfucks?

Yup. They did not support the UK war machine!

[501]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

This.

Non-merchants usually don't realize that it actually takes 6 months to confirm a credit card transaction. Merchants just let you have your stuff immediately because it would be stupid to tell you wait 6 months for a coffee. The reason they can do this is because usually only about 1% of customers try to scam you anyway, so it's not important.

[hilariousandco]

GOOD FOR THEM!

I think a more important question here is why are you buying coffee at Starfucks?

Yup. They did not support the UK war machine!

No, they're an American company so they support the American one.

[wachtwoord]

GOOD FOR THEM!

I think a more important question here is why are you buying coffee at Starfucks?

Yup. They did not support the UK war machine!

No, they're an American company so they support the American one.

Do they pay US taxes?

[hilariousandco]

GOOD FOR THEM!

I think a more important question here is why are you buying coffee at Starfucks?

Yup. They did not support the UK war machine!

No, they're an American company so they support the American one.

Do they pay US taxes?

Probably not, ha.

[LiteCoinGuy]

for just a coffee its enought to have zero confirmation.

[candoo]

Dont worry. Starbucks is not afraid of double spend.

Its gonna take 5 years until starbucks accepts btc and then there are everywhere cameras (MERICA!) and they have your face and post it online if you did indeed double spent the shit.

[pand70]

Fellow Bitcoiners,

This is something I don't understand. In order to be sure that a bitcoin transfer is successful, you have to wait for a confirmation. Standard market practice is to wait for 3 confirmations. A confirmation takes 10 minutes on average.

If bitcoin becomes massive, how will I buy a coffee at Starbucks? Will I have to pay with bitcoins and then wait 10/30 minutes before picking up my coffee?

I think it's the same risk as accepting small fake bills. It just don't worth the trouble imho to double spend a coffee buy.

[Peter R]

Dont worry. Starbucks is not afraid of double spend.

Its gonna take 5 years until starbucks accepts btc and then there are everywhere cameras (MERICA!) and they have your face and post it online if you did indeed double spent the shit.

And remember, double-spends are recognized by the network and thus also recognizable by the merchant before they give you your coffee.  For example, blockchain.info will show a big "DOUBLE SPEND DETECTED" warning should someone actually go through the process of building a custom "double spend" wallet app for their phone.  


TLDR: it's hard to double spend but easy to catch.  If you try it, you'll get caught before you leave with your coffee and look like a scammer.

[salfter]

I think a more important question here is why are you buying coffee at Starfucks?

Good for them.

This.  I don't care much for Charbucks, but if they have the Occutards pissed off at them, more power to 'em.

[wachtwoord]

This.  I don't care much for Charbucks, but if they have the Occutards pissed off at them, more power to 'em.

Pissing off occutards should be applauded indeed.

[burnum]

Preorder, or realize that BTC is going to become a commodity and not a currency with all the other options that transfer faster, buy into those that transfer faster with your BTC and stop worrying about yo.
i cant buy nothing with an oz of gold, yet i can trade it off for USD and nobody refuses that  

[pand70]

TLDR: it's hard to double spend but easy to catch.  If you try it, you'll get caught before you leave with your coffee and look like a scammer.

I guess that they 'll try to double spend after they take their coffee.  I mean how long does it take to get a coffee from starbucks 

[hilariousandco]

This.  I don't care much for Charbucks, but if they have the Occutards pissed off at them, more power to 'em.

Pissing off occutards should be applauded indeed.

I don't care for the occupy movement either, but I think you've got to be a capitalist pig to think it's ok for multi billion dollar companies to get away with paying zero tax whilst the ordinary citizen foots the bill.

[(A)social]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

This is correct, and who knows if this isn't workable, maybe bitcoins will not be for buying coffee.

Bitcoins are for pizzas!

[Peter R]

TLDR: it's hard to double spend but easy to catch.  If you try it, you'll get caught before you leave with your coffee and look like a scammer.

I guess that they 'll try to double spend after they take their coffee.   I mean how long does it take to get a coffee from starbucks  

Then it won't work.  The longer you wait to push the second fraudulent transaction, the more likely it is that the real transaction has already propagated across the network (and thus the fraudulent transaction will just be ignored).

You can confirm this for yourself.  http://brainwallet.org/#tx allows you to create transactions (without broadcasting them onto the network).  Send a single coin to a new address you control.  Use http://brainwallet.org/#tx and this new address to create two transactions: one to address A and one to address B.  (Make sure you control both address A and B).  Go to https://blockchain.info/pushtx and broadcast the transaction to address A.  Wait till it's picked up by the network (should be really fast).  Now, wait the amount of time it takes to leave the store with your coffee and then broadcast (double spend) the second transaction to address B.  You'll see that it won't go through.

[pand70]

TLDR: it's hard to double spend but easy to catch.  If you try it, you'll get caught before you leave with your coffee and look like a scammer.

I guess that they 'll try to double spend after they take their coffee.  I mean how long does it take to get a coffee from starbucks 

Then it won't work.  The longer you wait to push the second fraudulent transaction, the more likely it is that the real transaction has already propagated across the network (and thus the fraudulent transaction will be ignored).

Well i guess the kids that will try to double spend their coffee they will not get that hurt if their double spend attempt fails. I think people will try it only for fun anyway. Regular customers that do that will get noticed anyway.

[Topazan]

I think everything that needs to be said has already been said about the OP's question.  I just wanted to comment concerning Starbucks and tax.

We shouldn't be celebrating crony capitalism.  Regulations and taxes that are selectively enforced against smaller competitors to the mega-corps are not better than regulations and taxes that apply to everyone.

[justusranvier]

We shouldn't be celebrating crony capitalism.  Regulations and taxes that are selectively enforced against smaller competitors to the mega-corps are not better than regulations and taxes that apply to everyone.

Right, and the answer is to end the regulations and taxes.

The problem with uneven oppression is not that certain people aren't oppressed enough.

[501]

I think everything that needs to be said has already been said about the OP's question.  I just wanted to comment concerning Starbucks and tax.

We shouldn't be celebrating crony capitalism.  Regulations and taxes that are selectively enforced against smaller competitors to the mega-corps are not better than regulations and taxes that apply to everyone.

Looking at it from their point of view, when the government slaps them with a 60% tax rate can you really blame them for trying to worm their way out of it? Taxes are at the point where they're just ridiculous, and everyone tries to cheat on them as a result.

[burnum]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

This is correct, and who knows if this isn't workable, maybe bitcoins will not be for buying coffee.

watching alt coins and the work developers are putting into faster confirmations, it truly makes sense that bitcoin was developed as more of a security or commodity than a currency, I wont promote any specific coin on this thread, but  look at the possibility's out there, satoshi (or whoever) could not have built this coin without pondering where it actually would end up, everything I see tells me that it is just the foundation of a crypto financial system, he knew others would follow and bring innovation with them, with this in mind, if your trying to replace fiat and your on your way into a ballpark, do you want to stop and wait for a transaction to be confirmed before the guy scalping tickets releases them to you?-no- many things we buy in -  . . . - are on the go, system flaws and hackers tell me that I need a debit like system if I am going to use crypto currency, Starbucks may not mind protecting itself against a double spend multi wallet criminal, but the guy with 10 minutes in his busy life on craigslist is not really going to want to adopt the policy of the corporations of the world just cause their system works for them, find the altcoin that is most secure, fast, and is close to the fiat or currency we have used for century's and lets move on with this decentralized currency idea that has somehow attached itself to BTC.

P.S. Buy more pizza with BTC

[Peter R]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

This is correct, and who knows if this isn't workable, maybe bitcoins will not be for buying coffee.

watching alt coins and the work developers are putting into faster confirmations, it truly makes sense that bitcoin was developed as more of a security or commodity than a currency, I wont promote any specific coin on this thread, but  look at the possibility's out there, satoshi (or whoever) could not have built this coin without pondering where it actually would end up, everything I see tells me that it is just the foundation of a crypto financial system, he knew others would follow and bring innovation with them, with this in mind, if your trying to replace fiat and your on your way into a ballpark, do you want to stop and wait for a transaction to be confirmed before the guy scalping tickets releases them to you?-no- many things we buy in -  . . . - are on the go, system flaws and hackers tell me that I need a debit like system if I am going to use crypto currency, Starbucks may not mind protecting itself against a double spend multi wallet criminal, but the guy with 10 minutes in his busy life on craigslist is not really going to want to adopt the policy of the corporations of the world just cause their system works for them, find the altcoin that is most secure, fast, and is close to the fiat or currency we have used for century's and lets move on with this decentralized currency idea that has somehow attached itself to BTC.

P.S. Buy more pizza with BTC

Did you read the other posts in this thread or look more deeply into the double spend issue before posting that?

Double spends: difficult to attempt, easy to spot.
 

[burnum]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

This is correct, and who knows if this isn't workable, maybe bitcoins will not be for buying coffee.

watching alt coins and the work developers are putting into faster confirmations, it truly makes sense that bitcoin was developed as more of a security or commodity than a currency, I wont promote any specific coin on this thread, but  look at the possibility's out there, satoshi (or whoever) could not have built this coin without pondering where it actually would end up, everything I see tells me that it is just the foundation of a crypto financial system, he knew others would follow and bring innovation with them, with this in mind, if your trying to replace fiat and your on your way into a ballpark, do you want to stop and wait for a transaction to be confirmed before the guy scalping tickets releases them to you?-no- many things we buy in -  . . . - are on the go, system flaws and hackers tell me that I need a debit like system if I am going to use crypto currency, Starbucks may not mind protecting itself against a double spend multi wallet criminal, but the guy with 10 minutes in his busy life on craigslist is not really going to want to adopt the policy of the corporations of the world just cause their system works for them, find the altcoin that is most secure, fast, and is close to the fiat or currency we have used for century's and lets move on with this decentralized currency idea that has somehow attached itself to BTC.

P.S. Buy more pizza with BTC

Did you read the other posts in this thread or look more deeply into the double spend issue before posting that?

Double spends: difficult to attempt, easy to spot.
 

Yes i read the thread, I usually pick the shorter ones to post in, I have read arguments about double spending and it seems to be very difficult, the common thief has not yet been sold the wallets to double spend with, given time they will come, I have read alot of arguments and anything I say should only be taken as my opinion as a "what if" based on my perception.

Do you ever make transactions that you expect to take 30 seconds?

Ever buy anything in such a rush that you were unable to wait for your change?

how easy is it to spot a double spend? Is it possible to have a program on your cell phone that looks like a legit wallet but can quickly produce an address that is similar to one that is attached to a QR code? such a program could remove the double spend and would be outright theft, i would much rather a quick confirmation if I am selling something on a busy street

[burnum]

Which gets me thinking that maybe Starbucks ought to have some kind of protection if a transaction is going to take a long time (10 minutes), and buyers ought to have code on their mobile device wallet that communicates with the Starbucks client to insure that it is a part of the network.

[pening]

Another serious issue and its dismissed as trivial and nothing to worry about. 

What will happen, just like with cards if you like, large chains might absorb the losses but the small shops after being burnt a few times wont accept Bitcoins.  You think someone wont double spend for a coffee?  You'd think they wouldn't use a stolen card, or fake money, yet they do.  Anyway, a coffee is a poor example as with their unit cost they can ignore it, most shops would want to wait for confirmation, just like they wait for the card terminal to respond. 

[Kane49]

You think Starbucks paying zero tax whilst the ordinary people pay on their minimum wages is good?

You are just jealous they have the rights to the name Starbucks and you can't name your Altcoin that

[toknormal]

I think you're all missing the point here.

If cryptocurrencies ever end up being used at the point of sale, don't think for a moment that those transactions are going to be hitting the blockchain directly.

Look at how todays cryptocurrency exchanges work. You can spend BTC, LTC,  PPC, XPM, WDC - whatever. All those trades are instant (if your not on cryptsy ! ). They have nothing to do with the confirmation time of the respective coin.

That's because your not actually doing blockchain transactions - your spending from a cryptocurrency account.

That's the way the retail economy works today out in the real world and that's the way it will always work. Transaction clearing houses like Visa and Maestro get the "trade" out of the way quickly for the vendor, then clear the transaction through the banks over the next few hours. It will continue to work this way except that instead of USD accounts you'll be spending BTC / LTC whatever on your credit/debit card.

Another reason that direct blockchain transaction will never be used at the point of sale is that they are far too inflexible. Doing the sale from an account through a clearing house allows for all kinds of problems to be resolved befor the transaction hits the blockchain - e.g. reversals, refunds, revisions. They also provide value added services like insuring the transaction, use of store cards etc etc.

That was my point in an earlier thread I made about coin transaction time. I don't really see the point in so called "fast coins". A 10 minute blockchain confirmation time is way fast enough. At the moment the banks take hours or days to clear transactions.

[justusranvier]

Another reason that direct blockchain transaction will never be used at the point of sale is that they are far too inflexible. Doing the sale from an account through a clearing house allows for all kinds of problems to be resolved befor the transaction hits the blockchain - e.g. reversals, refunds, revisions. They also provide value added services like insuring the transaction, use of store cards etc etc.

Do you think there's only one kind of blockchain transaction?

[toknormal]

Do you think there's only one kind of blockchain transaction?

Yes, I think there's only 1 kind of blockchain transaction.

[hilariousandco]

We shouldn't be celebrating crony capitalism.  Regulations and taxes that are selectively enforced against smaller competitors to the mega-corps are not better than regulations and taxes that apply to everyone.

Right, and the answer is to end the regulations and taxes.

The problem with uneven oppression is not that certain people aren't oppressed enough.

So you don't believe in taxes? Personally, I believe in a flat-tax; whether you earn £20k or £20 billion you pay the same percentage of tax. Successful people shouldn't be penalised for making money (anything over 50% is robbery), but the poor shouldn't be raped of the little they have either. I believe in taxes for building schools, roads and hospitals etc; not laundering tax-payers money into large corporations and the funding the war machine.

[emilia79]

flat-tax also increase inequalities:

 1000$ a month with a 20% tax: you already have     difficulty to pay for your food, goods, appartment
10000$ a month with a 20% tax: you           have no difficulty to live

In some countries, you have a progressive system:

poor : no tax
lower class: small percentage
midle : normal
high: high percentage

So everyone can live without being strangled.

Take a look at poverty rate in some liberal countries with the flat-tax.

[hilariousandco]

flat-tax also increase inequalities:

 1000$ a month with a 20% tax: you already have     difficulty to pay for your food, goods, appartment
10000$ a month with a 20% tax: you           have no difficulty to live

In some countries, you have a progressive system:

poor : no tax
lower class: small percentage
midle : normal
high: high percentage

So everyone can live without being strangled.

Take a look at poverty rate in some liberal countries with the flat-tax.

I don't believe you should pay income taxes unless you earn over a certain amount. The poor and those on part time / minimum wage would not pay any taxes. They would also get cuts on other things, like the poor already do. The tax brackets you suggested is what happens in most countries and is only fair if the percentages are fair. No tax brackets/system will ever be perfect, but I don't agree with millionaires having to pay 70% like in some countries; that's just ridiculous and complete robbery.

[jubalix]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

but given in any block there are a lot of transactions, isn't any block up for subversion so that argument its only small doesn't cut it? OR arue you saing a company could wear a small loss like that so it doesn't mater

[Topazan]

We shouldn't be celebrating crony capitalism.  Regulations and taxes that are selectively enforced against smaller competitors to the mega-corps are not better than regulations and taxes that apply to everyone.

Right, and the answer is to end the regulations and taxes.

The problem with uneven oppression is not that certain people aren't oppressed enough.

Agreed.

Looking at it from their point of view, when the government slaps them with a 60% tax rate can you really blame them for trying to worm their way out of it? Taxes are at the point where they're just ridiculous, and everyone tries to cheat on them as a result.

No, I can't blame them, but I don't take any comfort in it either.  It's like saying "Sure, most people in North Korea are starving, but at least the political and military leaders are ok".  Crony capitalism is not a rebellion against western statism, it's an aspect of it that should be opposed just as firmly as any other statist violence.

[pand70]

In some countries those that pay taxes as they should are considered weak and even fools. People are bragging that they managed to avoid taxes with off shore companies etc.

[proton]

Could you clarify with one example:

Consider a merchant who accepts bitcoins.  Instead of converting my bitcoings to fiat currency, the merchant is happy to add on to his bitcoins after selling something to me and receiving bitcoins.

Does this transaction require a 10-min confirmation process?

[DeathAndTaxes]

Could you clarify with one example:

Consider a merchant who accepts bitcoins.  Instead of converting my bitcoings to fiat currency, the merchant is happy to add on to his bitcoins after selling something to me and receiving bitcoins.

Does this transaction require a 10-min confirmation process?

Until confirmed a transaction "could" be double spent.  Converting or not converting to fiat makes no difference.  How much of a risk the merchant is taking depends on a lot of factors so there is no simple black and white answer.  Some factors include the probability of fraud, offline vs online, how much is known about the customer, the ability for the merchant to reverse the sale (steam games for example would suffer essentially no risk/loss by accepting 0-confirm txs*), value of the transaction, and the margin/markup.

As an example soda machines have an average sale of ~$1, have a 70%+ gross margin, and the fraud must be committed in person.  On the other hand an online bullion merchant may have an average sale of $1,000+, have gross margins less than 2%, and the attack can be engaged online.  A 10-60 minute delay for soda machine is clearly not warranted and wouldn't be viable anyways, on the other hand accepting 0 confirm for bullion is probably stupid and given that shipping is not going to be instantaneous there is really no point to not wait for confirmations.

There is no one answer fits all.  IMHO the amount of concern about double spends vastly (by a couple orders of magnitude) the amount of actual double spends.


* On steam games (or other similar company which can revoke access to service).  So someone pays for Call of Duty with a double spend.   Steam records it as a valid purchase, customers starts downloading, 10-60 minutes later steam's back end is alerted of a double spend in the block.  Steam reverses the transaction and user is unable to access downloaded game.   Now one could make the argument that user may attempt to break steam's activation (piracy) but there are far easier ways to engage in piracy which don't involve spending any funds (i.e. just illegally torrent Call of Duty).  Other companies in similar scenario would be vpn providers, web hosting providers, domain name registrars, online multiplayer games, anything sold as a subscription, and any software as a service (antivirus for example).

[beetcoin]

flat-tax also increase inequalities:

 1000$ a month with a 20% tax: you already have     difficulty to pay for your food, goods, appartment
10000$ a month with a 20% tax: you           have no difficulty to live

In some countries, you have a progressive system:

poor : no tax
lower class: small percentage
midle : normal
high: high percentage

So everyone can live without being strangled.

Take a look at poverty rate in some liberal countries with the flat-tax.

well, if loopholes and tax havens are stopped, that would make it a different story. there's no point in taxing people who make under 20k though, they are just going to need government assistance.

[salfter]

This.  I don't care much for Charbucks, but if they have the Occutards pissed off at them, more power to 'em.

Pissing off occutards should be applauded indeed.

I don't care for the occupy movement either, but I think you've got to be a capitalist pig to think it's ok for multi billion dollar companies to get away with paying zero tax whilst the ordinary citizen foots the bill.

Why are you starting from the assumption that the government needs massive taxation in order to operate?

[hilariousandco]

This.  I don't care much for Charbucks, but if they have the Occutards pissed off at them, more power to 'em.

Pissing off occutards should be applauded indeed.

I don't care for the occupy movement either, but I think you've got to be a capitalist pig to think it's ok for multi billion dollar companies to get away with paying zero tax whilst the ordinary citizen foots the bill.

Why are you starting from the assumption that the government needs massive taxation in order to operate?

Why are you assuming that I do? What level of taxation do you suggest they should be operating at?

[proton]

Thanks DeathandTaxes.

Based on what I read on this thread, I think it is safe to say that:
 
A bitcoin transaction could be immediate...However, for it to be considered 100% legitimate, it needs to be confirmed on blockchain and this would take ~10 min.

This makes bitcoin direct transactions impractical for small transactions such as buying coffee or more importantly for micropayments.  Even if one is willing to take the risk of double spend and does not mind the fees, it may still be not enough. This is because bitcoin protocol cannot handle thousands of transactions per second.

A solution to this could be a third-party clearinghouse.  Clearinghouse can accumulate all the small transactions, net them up and reconcile everything with blockchain on a lower frequency.  However, resorting to a third party seems to be a step back from bitcoin's inherent advantages.

[CoinDiver]

Taxation is theft. I don't think we should tax Starbucks more, I think we should tax everyone else less. Not at all would be prefered.

Don't misconstrue this to mean I don't think people should pool part of their income together for projects the benefit the "greater good"... just that it is immoral for it to be forced. Theft is theft, no matter how legitimate the state finds itself.

At what percent is slavery moral?

[allthingsluxury]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

well, there's a 3rd party ensuring that you won't be scammed (when using a credit card). with bitcoin, there's only you and the provider.

Credit cards don't protect the merchant from getting scammed.  If you make a purchase and then report the card stolen, they'll steal the money back from the merchant so they can repay the cardholder.

In short, credit cards are safer for consumers, but Bitcoin is safer for merchants.

Agreed, the current system is incredibly unfair for merchants, who always get left holding the bag. Even if they do all the proper steps. Bitcoin is a monstrously huge improvement.

[cr1776]

...I don't care for the occupy movement either, but I think you've got to be a capitalist pig to think it's ok for multi billion dollar companies to get away with paying zero tax whilst the ordinary citizen foots the bill.

Companies do not pay taxes.  People do.  All taxes are passed back on to people through higher prices.  Companies serve as tax collectors for the government, in order to help hide the full level of taxation from the people who don't think about it.  Nothing more.

Just like the "company share" of Social Security taxes (in the US) aren't paid by the company, they are paid by you through foregone wages.

For transparency, withholding taxes should be eliminated and so should corporate taxes.  Otherwise, people are fooled into thinking that some person is not paying taxes and they are getting something for nothing.

Cut taxes so that individuals can choose what causes they want to support with their own money.  It isn't charity at the point of a gun and it isn't charity if it is someone else's money.

[hilariousandco]

Taxation is theft. I don't think we should tax Starbucks more, I think we should tax everyone else less. Not at all would be prefered.

Don't misconstrue this to mean I don't think people should pool part of their income together for projects the benefit the "greater good"... just that it is immoral for it to be forced. Theft is theft, no matter how legitimate the state finds itself.

At what percent is slavery moral?

You can argue that property is theft. I think taxes are great, as long as they are fair and just and spent on the right things. If we didn't have taxes how would we pool money to build schools, hospitals and roads etc? Corporations would likely just take over, then we would have to pay extortionate fees and tolls on roads etc. I'm a big believer in that everybody chips in a little and everybody benefits a lot, but only if the system is fair, but of course you have to find the balance.

[bluemeanie1]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

are there any services out there that offer insurance for this?

[uranian]

No middle ground is possible on this subject. Either "taxation without consent is robbery," or it is not. If it is not, then any number of men, who choose, may at any time associate; call themselves a government; assume absolute authority over all weaker than themselves; plunder them at will; and kill them if they resist. If, on the other hand, taxation without consent is robbery, it necessarily follows that every man who has not consented to be taxed, has the same natural right to defend his property against a taxgatherer, that he has to defend it against a highwayman. ~ Spooner

personally I'd be happy to pay for healthcare, but I'm not happy to do it at the point of a gun (/court/prison).

[Probably]

I think everything that needs to be said has already been said about the OP's question.  I just wanted to comment concerning Starbucks and tax.

We shouldn't be celebrating crony capitalism.  Regulations and taxes that are selectively enforced against smaller competitors to the mega-corps are not better than regulations and taxes that apply to everyone.

Looking at it from their point of view, when the government slaps them with a 60% tax rate can you really blame them for trying to worm their way out of it? Taxes are at the point where they're just ridiculous, and everyone tries to cheat on them as a result.

circular logic - taxes are that bad because of the companies that worm their way out.


its like saying "people stealing shit at stores is OK because things are too expensive (due to people stealing shit at stores)"
Yes, you can blame the price markups from wholesale to retail... but you can equally blame the theft driving the prices up.


When the company blames the thefts, the people can blame the companys markups for the initial thefts. That doesn't mean there aren't thieves.

[Probably]

Taxation is theft. I don't think we should tax Starbucks more, I think we should tax everyone else less. Not at all would be prefered.

Don't misconstrue this to mean I don't think people should pool part of their income together for projects the benefit the "greater good"... just that it is immoral for it to be forced. Theft is theft, no matter how legitimate the state finds itself.

At what percent is slavery moral?

You can argue that property is theft. I think taxes are great, as long as they are fair and just and spent on the right things. If we didn't have taxes how would we pool money to build schools, hospitals and roads etc? Corporations would likely just take over, then we would have to pay extortionate fees and tolls on roads etc. I'm a big believer in that everybody chips in a little and everybody benefits a lot, but only if the system is fair, but of course you have to find the balance.

One bit that would help is an individual being able to allot taxes granularly instead of assuming a 'democratically appointed, either directly or by the residue of democracy' representative assessing what that tax allocation should be.

Once cash is done away with and everything is digital and integrated, the idea of 'paying tax yearly' should be eradicated and replaced by the concept of 'assigning your tax payouts yearly.'

Our billionaire friends have no problems deciding where their taxes go, via writeoff donations. someone making a living at a fast food restaurant doesn't get to choose.

50% of my taxes could be assigned by the government, the other 50% should go wherever I want. There are very little philanthropic / writeoff driven charitable giving opportunities for those in the middle/lower classes because our taxes are taken up front.

Why does the government get to decide what those unable to steer their tax dollars use it on? Even if 'stupid selfish people' decide 100% of their taxes go towards making roads better, they should end up with some damn good roads and that would naturally make them not do that in the future, or perhaps the government could limit the choices, etc.


bitcoin has proven a lot about using intermediaries as "trusted decisionmakers" ... it sucks, and they're all on the chopping block. Unfortunately, those intermediaries are the ones deciding policy so they can dig their heels in easily if they're too dumb to see the benefits and how they fit in in the future.

[Eri]

Thanks DeathandTaxes.

Based on what I read on this thread, I think it is safe to say that:
 
A bitcoin transaction could be immediate...However, for it to be considered 100% legitimate, it needs to be confirmed on blockchain and this would take ~10 min.

This makes bitcoin direct transactions impractical for small transactions such as buying coffee or more importantly for micropayments.  Even if one is willing to take the risk of double spend and does not mind the fees, it may still be not enough. This is because bitcoin protocol cannot handle thousands of transactions per second.

A solution to this could be a third-party clearinghouse.  Clearinghouse can accumulate all the small transactions, net them up and reconcile everything with blockchain on a lower frequency.  However, resorting to a third party seems to be a step back from bitcoin's inherent advantages.

More like its a non issue. transactions propagate so fast there really isnt a way to double spend in a store and get away with what you bought.
 *buys coffee*
*double spends*
*clerk turns to give me coffee and sees "Double spend" on the screen.* they could then send a picture of your face to the police for 'attempted theft'. but nobody would even waste their time doing that.

or

*buys coffee*
*doesnt double spend yet*
*clerk gives me coffee*
*runs out of the store as fast as possible and trys to double spend but the transaction is ignored since the first has already propagated through the network*


People are already using this method of 0 confirmations at stores. ive yet to hear of anyone pulling off a double spend.

[Mike Christ]

You can argue that property is theft. I think taxes are great, as long as they are fair and just and spent on the right things.

If they were fair and just and spent on the right things, you wouldn't need to call them taxes

I'm a Libertarian Socialist...

Are you playing devil's advocate here, or are you using taxation as the closest synonym for a voluntary contribution (since taxation is defined only by its compulsory quality, i.e. not having to do with libertarianism)?

[BTCisthefuture]

the two largest 3rd party merchant vendors calculate things like this into their operations.  same way credit card companies will pay a customer back if a fraudulent charge happens. companies like bitpay and coinbase allow transactions with merchants to clear instantly even though theres a slight change they might end up footing the bill, they can do this because of the 1% flat fee they charge on all transactions just like credit card companies can pay you back if someone spent your credit card because of all the fees they get on every transaction from merchants.

of course other people in this thread already explained this more clearly than i can or just did

[crazy_rabbit]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

well, there's a 3rd party ensuring that you won't be scammed (when using a credit card). with bitcoin, there's only you and the provider.

Have you ever heard of Bitpay or Coinbase?

[BTCisthefuture]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

are there any services out there that offer insurance for this?

cionbase and bitpay are the main ones right now. i've yet to run into a store that accepts bitcoin that doesnt use one of tehse two companies to handle their bitcoin transactions. just like credit card companies are able to cover losses due to the fee's the charge merchants ,  bitpay and coinbase are able to cover losses because of the 1% flat fee they charge merchants for all transactions. 

i think it's one of the biggest advancements in the bitcoin industry recently that not many pepole have talked about. the fact that people are able to and ARE making instant purchases at stores without having to wait for conformations. it's truly a great thing.

[Klestin]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

This.

[hilariousandco]

For small purchases, you don't really have to wait for a confirmation.  You just need to make sure the transaction appears on the network.  If there are any losses, they can be written off as a cost of doing business or treated as theft.  The chances of double-spending for a cup of coffee are less than the chance of someone walking out on a restaurant bill.

are there any services out there that offer insurance for this?

cionbase and bitpay are the main ones right now. i've yet to run into a store that accepts bitcoin that doesnt use one of tehse two companies to handle their bitcoin transactions. just like credit card companies are able to cover losses due to the fee's the charge merchants ,  bitpay and coinbase are able to cover losses because of the 1% flat fee they charge merchants for all transactions. 

i think it's one of the biggest advancements in the bitcoin industry recently that not many pepole have talked about. the fact that people are able to and ARE making instant purchases at stores without having to wait for conformations. it's truly a great thing.

Yeah, the double spend isn't really a big issue. There will be some way that merchants are covered by whatever Bitcoin Processor they choose to use.

[Klestin]

Double spend is a real problem. 10 minutes is intolerable.

It's fairly easy even for non tech-savy people to install 2 clients on different devices and send money during call at the same time.

The one with larger fees will win.

No, the first one received by whichever pool creates the next block wins.  If you have information otherwise, please provide source.

[kjj]

I'm pretty sure that most retail purchases will be done by VISA, MasterCard, Discover, etc.  Or, if those guys are slow to get on the train, they'll go extinct while startups provide the same services they provide, but for bitcoin.

Those companies exist pretty much for the sole purpose of mediating transactional risks.  They also have the advantage of keeping small transactions off the blockchain (aka out of the ACH system).

Pretty hard to imagine a world where no one is doing what they do.

[jongameson]

coffee is legal, why the hell would you want to use bitcoins for that

[hilariousandco]

coffee is legal, why the hell would you want to use bitcoins for that

Not everybody uses their bitcoins for illegal purposes. Some people want to use it as a mainstream currency, and you should be able to buy whatever you want with it.

[DeathAndTaxes]

Double spend is a real problem. 10 minutes is intolerable.

It's fairly easy even for non tech-savy people to install 2 clients on different devices and send money during call at the same time.

The one with larger fees will win.

Try it, it doesn't.  The network is far more robust than that. 

[bythesea]

I drink normal coffee not some flavored and such so i wouldnt chose starbucks, but assuming i sit and order coffee at 12:15 and i wanna pay with BTC i would pay as soon as i get my coffee, that way even if the confirmation is longer it wouldnt effect my time....

[findftp]

If bitcoin becomes massive, how will I buy a coffee at Starbucks? Will I have to pay with bitcoins and then wait 10/30 minutes before picking up my coffee?

Drink slowly

[zimmah]

If credit cards take 180 days to be confirmed how will you buy coffee at Starbucks?

 


the truth is just lulz at times.

You misspelled 10 years

[I_bitcoin]

I need a cut and pasteable write up for why confirmation time is barely relevant with good POS implementation.   I see this question so often.

If someone can point me to a good one I will use it otherwise going to try something like the below.


-------------||||-----------------------

Isn't 10 minutes for confirmation too long?   Can't someone hack this and spend the same coins twice?

No, for most purchases simply having the transaction out in the network is sufficient.   Your address can be monitored for further spends (and sufficient funds) by the POS terminal once the initial transaction is made.   If there is no spend within a few seconds your odds of theft are minuscule.

But what if they send a transaction without a fee?   

Same story as above, your transaction can be checked for appropriate transaction fees.  As we move to new transaction fee structures the POS can monitor for what a typical transaction of that size would take to clear and apply to a block.

-------------||||-----------------------

Is this enough or is there something better? 

[guybrushthreepwood]

Don't use Starbucks; find a independent coffeeshop that takes bitcoin and support them instead!

[justusranvier]

I met an actuary at the Las Vegas conference and told him he should apply that to measuring double spend risk and selling insurance to merchants.

[MikeyVeez]

The problem isn't 0 confirmation transactions it's if Bitcoin becomes mainstream for people using it as a source of payment, it will break as it can't handle the transaction load, and will become a clusterfuck of a problem.

[I_bitcoin]

The problem isn't 0 confirmation transactions it's if Bitcoin becomes mainstream for people using it as a source of payment, it will break as it can't handle the transaction load, and will become a clusterfuck of a problem.

There is that potential.   Especially as we seem to be working against a logistic function.   Most people fail to comprehend how fast things can happen.   That said, we seem to have a number of tactics available right away that just require implementation.

Some new heavy hitters coming in for mining as well.  When combined with funding we could see significant improvements happening sooner.   Note Gavin working with Coinbase may give some additional ooomph in development assisted by new capital from VCs.

[stompix]

The problem isn't 0 confirmation transactions it's if Bitcoin becomes mainstream for people using it as a source of payment, it will break as it can't handle the transaction load, and will become a clusterfuck of a problem.

Hasn't this been discussed over and over , and it's clear that the network can hold a great amount of transactions if we tweak it a little bit?

[jongameson]

What about fastcoin?  I understand that one is teh fastest!

[bitcoinpsftp]

As I said on various other posts, things like starbucks will accept 0 verifications.  And if bigger shops work with BTc, either they wait a little, or have insurance that protects from double spending.

[Anon136]

simple answer:

0 confirmation transactions are safer than you think, its still way harder than chargeback on a credit card

starbucks has cameras, if you steal from them than they call the police

[bitcoinpsftp]

simple answer:

0 confirmation transactions are safer than you think, its still way harder than chargeback on a credit card

starbucks has cameras, if you steal from them than they call the police

Yes, another elegant way to put it.  Plus, just because your bitcoins are anonymous to an extent in your wallet, who's to say most companies won't ask for ID before you make your bitcoin payment.  So if you were to double spend, they'd at least have a photo ID scanned to send to the police.  Double spending is also not THAT easy to do.

[Cryptolator]

coffee is legal, why the hell would you want to use bitcoins for that

LOL !!!

[bitcoinpsftp]

coffee is legal, why the hell would you want to use bitcoins for that

LOL !!!

Sadly though, even though it's funny here, many people have a misconception about bitcoins, and that it's used mostly for illegl things.  I here this all the time.  While this is far from the trueth, hopefully there will be some positive marketting coming from the bigger investors some time soon.

[hilariousandco]

coffee is legal, why the hell would you want to use bitcoins for that

LOL !!!

Sadly though, even though it's funny here, many people have a misconception about bitcoins, and that it's used mostly for illegl things.  I here this all the time.  While this is far from the trueth, hopefully there will be some positive marketting coming from the bigger investors some time soon.

Tell them cash is used for many illegal things.

[pand70]

Don't use Starbucks; find a independent coffeeshop that takes bitcoin and support them instead!

If starbucks start accepting bitcoins the price will double in a day.

[hilariousandco]

Don't use Starbucks; find a independent coffeeshop that takes bitcoin and support them instead!

If starbucks start accepting bitcoins the price will double in a day.

I really doubt it double in a day. I'm sure it'll raise the price and profile of BTC, but double it is a bit extreme.

[mco65]

For most, that is damn near impossible... I don't know of any independent coffee shops near me that take BTC. In fact, i don't know of any brick and mortar stores near me that do. To date, i have only been able to use BTC online.

[hilariousandco]

For most, that is damn near impossible... I don't know of any independent coffee shops near me that take BTC. In fact, i don't know of any brick and mortar stores near me that do. To date, i have only been able to use BTC online.

It's early days yet. Plus, you'll only be aware of them if you go in. Some stores that accept them don't even state they do or explicitly advertise the fact. Let's see how many stores start accepting them in 2014 - I think you'll be surprised. It'll also be much easier to get smaller independent entrepreneurial shops to experiment with accepting them as opposed to big corporations. I'll probably buy a coffee with BTC the first place I see that accepts them just to try it out and encourage it's use.

[pand70]

For most, that is damn near impossible... I don't know of any independent coffee shops near me that take BTC. In fact, i don't know of any brick and mortar stores near me that do. To date, i have only been able to use BTC online.

I don't know of anyone that knows what bitcoin is. I have only been able to find people that know about bitcoin online.
What does this mean? That bitcoin is impossible?  

[DeathAndTaxes]

Don't use Starbucks; find a independent coffeeshop that takes bitcoin and support them instead!

If starbucks start accepting bitcoins the price will double in a day.

I really doubt it double in a day. I'm sure it'll raise the price and profile of BTC, but double it is a bit extreme.

Agreed.  Bitcoin isn't some tiny experiment where the money supply is worth a few million anymore.  There is pretty much no event that could cause it to double in on day.  Likewise the only events IMHO that could cause it to fall more than 50% in one day anymore are likely catastrophic (massive network wide double spend, 51% attack blocking all transactions, a fatal flaw found in SHA-256, a backdoor found in the ECC curve used by Bitcoin, etc).

[BTCat]

If bitcoin becomes massive, how will I buy a coffee at Starbucks? Will I have to pay with bitcoins and then wait 10/30 minutes before picking up my coffee?

That's an easy one. You simply buy a second coffee.

[pand70]

Don't use Starbucks; find a independent coffeeshop that takes bitcoin and support them instead!

If starbucks start accepting bitcoins the price will double in a day.

I really doubt it double in a day. I'm sure it'll raise the price and profile of BTC, but double it is a bit extreme.

Agreed.  Bitcoin isn't some tiny experiment where the money supply is worth a few million anymore.  There is pretty much no event that could cause it to double in on day.  Likewise the only events IMHO that could cause it to fall more than 50% in one day anymore are likely catastrophic (massive network wide double spend, 51% attack blocking all transactions, a fatal flaw found in SHA-256, a backdoor found in the ECC curve used by Bitcoin, etc).

Yet bitcoin lost 50% of its value in 1 day because baidu removed it from it's homepage. Were you saying back then that this was a no event either?

[DeathAndTaxes]

Yeah that didn't happen in 1 day.

http://bitcoincharts.com/charts/mtgoxUSD#rg30zigDailyztgSzm1g10zm2g25zv