I really dont think bitcoin is going to be a day2day currency

[justusranvier]

Every state will have their own centralized PoS coin and Bitcoin will be the reserve currency based on the basket of world cryptocurrencies. You will hopefully be able to trade them openly. Free states of course will allow Bitcoin to be traded directly. 

[Dafar]

Um... credit card confirmations take 3-4 weeks!

Bitcoins are much faster and MUCH better for merchants as there are no charge backs

[cbeast]

Every state will have their own centralized PoS coin and Bitcoin will be the reserve currency based on the basket of world cryptocurrencies. You will hopefully be able to trade them openly. Free states of course will allow Bitcoin to be traded directly. 

Clearly Canada is creating an electronic currency called MintChip. It is not PoS but they will make it so in their next version. You don't really expect states to use Bitcoin (or colored coins) anytime soon?

[justusranvier]

Clearly Canada is creating an electronic currency called MintChip. It is not PoS but they will make it so in their next version. You don't really expect states to use Bitcoin (or colored coins) anytime soon?

It's not about whether or not governments will experiment with Piece of Shit e-currencies.

I'd ask what you mean by, "Bitcoin will be the reserve currency based on the basket of world cryptocurrencies" but I already know the answer since we've talked about that before: you believe governments have the magical ability to dictate exchange rates just because.

[cbeast]

Clearly Canada is creating an electronic currency called MintChip. It is not PoS but they will make it so in their next version. You don't really expect states to use Bitcoin (or colored coins) anytime soon?

It's not about whether or not governments will experiment with Piece of Shit e-currencies.

I'd ask what you mean by, "Bitcoin will be the reserve currency based on the basket of world cryptocurrencies" but I already know the answer since we've talked about that before: you believe governments have the magical ability to dictate exchange rates just because.

right. The magical ability is called threat of force.

[jellies]

Um... credit card confirmations take 3-4 weeks!

Bitcoins are much faster and MUCH better for merchants as there are no charge backs

there is only no charge back if the retailer waits for the 1st confirmation for small amounts, and the 2nd confirmation or more for larger amounts.

Waiting for the first confirmation can be 1 minute or 25+ minutes.

For buying anything needing shipping, that is fine, e-tailer just places a hold on the stock item. But for buying groceries it is ridiculous. If they do not wait for the first confirmation then unless they have another way to identify a customer they are going to be giving away groceries to any thief willing to read a FAQ.

Notice you dont really grab your bag of items until the credit card machine beeps.

The BTC beep takes between 1 and 25 minutes to arrive, there is no getting around this issue, if you want the wallet to remain anonymous.

[romerun]

Of course it's not, cash and cc are already easy, how could btc make it easier

[Peter R]

Notice you dont really grab your bag of items until the credit card machine beeps.  The BTC beep takes between 1 and 25 minutes to arrive, there is no getting around this issue, if you want the wallet to remain anonymous.

Bitcoin is faster than credit card: here in Vancouver several brick-and-mortar merchants accept bitcoin via BitPay.  It is standard to consider the invoice paid when the network picks up the transaction as valid.  This typically occurs in a fraction of second--faster than a credit card.  

The double-spend problem, to most users and vendors, most of the time, is academic.  Let's consider how you could double-spend against a coffee shop here in Vancouver:

DOUBLE SPEND ATTEMPT #1: (fails)

1-A.  You walk up to the counter and ask for your coffee.  The sales girl generates the BitPay invoice, you scan the QR code, and press "send" on your iPhone.  The BitPay app picks up the transaction on the network in a fraction of a second, and the invoice suddenly says "PAID."  You grab your coffee and leave.

1-B.  But you're sneaky: you quickly run into your car where you've already generated a raw transaction with the same coins you used to pay for your coffee, but in this fraudulent transaction you instead send the coins to an address you control (you used the brainwallet.org "transactions" page) .  You broadcast this transaction using blockchain.info's pushtx service (https://blockchain.info/pushtx).  What you will realize is that by the time you got back to your car, the original transaction has already propagated across the network.  This means that nodes will not relay this new fraudulent transaction and miners will not add it to their memory pool since they know that these coins were already spent.  Double-spend attempt #1 fails.  

DOUBLE SPEND ATTEMPT #2: (fails)

2-A.  Discouraged by your failure, you head back to your evil lair where you continue your plot to get free coffee.

2-B.  You decide that you need to broadcast both transactions at roughly the same time in order to have a better chance of success.  You need to do this *inside* the coffee shop, but all you have access to while inside the store is your blockchain.info app for iPhone.  So, you jail-break your phone and hire an iOS expert to create you a custom double-spend app.  This app by design sends out the transaction to the coffee shop, but also sends out a transaction to an address that you control.

2-C.  So you order your coffee and test out your app.  But the BitPay invoice never says "paid."  When the sales girl checks at blockchain.info, she sees a big red "DOUBLE SPEND DETECTED" warning beside the transaction.

2-D.  You don't get your coffee and leave the store with everyone thinking that you are a thief.  

DOUBLE SPEND ATTEMPT #3: (succeeds once and a while)

3-A.  Back at the lair, you realize that your quest for free coffee is more difficult than you actually thought.  You call up some nefarious miner that controls 30% of the global hash power.  You tell him that when you give him the signal, he should add your fraudulent transaction to his memory pool of unconfirmed transactions.  You pay your iPhone hacker to modify your app to send the evil miner a special signal when you buy your coffee.

3-B.  You go to the coffee shop and buy your coffee.  Your new app sends the signal to the evil miner that you're in cahoots with.  The miner adds your fraudulent transaction, while the real transaction propagates across the network.

3-C.  Since the evil miner controls 30% of the global hash power, your coffee is free 30% of the time.  

3-D.  Finally, you succeed!  You also decide it is a lot less work to just pay for your coffee normally...


 

[samsam]

There are ways to double spend. They are not that common right now, but that is mainly because bitcoin is not used a lot in commerce yet. If it begins being used in commerce, then the lure of double spending will attract a lot of hackers attention with lots of "double spend" wallets being offered on the black market.

You should always wait at least for one confirm, unless you are willing to risk not getting paid.

https://blockchain.info/double-spends

[jellies]

you are assuming here that you have to "run back to your car", and so on.

If a transaction requires that it be included in a block to be valid (and it does), then you can double-spend by double-spending at the same time.

Just send the amount to another wallet you control while buying the groceries, using your phone which is on the network as well.

At least 50% of the time, you will win, even if you can't work out how to defeat it 100% of the time.

And 50% is a pretty good discount.

Therefore my conclusion is BTC will require another layer, providing wallet identification, in order to be trusted for the transactions that are handled with a confirmation point of sale "beep" that tells the checkout person to let you walk away with the bag.
It will have to be opt-in. You want to buy something truly instantly, not 1 to 30 minute instantly? you must use a wallet with an identity attached and a third party service handling the verifications of those identities. One way or another.

Oh whoops we're back to credit cards again.

[Peter R]

you are assuming here that you have to "run back to your car", and so on.

If a transaction requires that it be included in a block to be valid (and it does), then you can double-spend by double-spending at the same time.

Just send the amount to another wallet you control while buying the groceries, using your phone which is on the network as well.

At least 50% of the time, you will win, even if you can't work out out to defeat it 100% of the time.

And 50% is a pretty good discount.

This was "DOUBLE SPEND ATTEMPT #2" that I described.  The problem is that the network sees the double spend attempt (try this and see for yourself).   Yes, the payment goes to your address 50% of the time, but you get your coffee 0% of the time because the merchant can detect the double spend attempt.

Besides: there are brick-and-mortar businesses all of the world accepting zero-confirm transactions for expensive bar tabs, etc already!

[Peter R]

There are ways to double spend. They are not that common right now, but that is mainly because bitcoin is not used a lot in commerce yet. If it begins being used in commerce, then the lure of double spending will attract a lot of hackers attention with lots of "double spend" wallets being offered on the black market.

You should always wait at least for one confirm, unless you are willing to risk not getting paid.

https://blockchain.info/double-spends

samsam, please describe in specific detail an effective way that I could walk into a coffee shop here in Vancouver and successfully double spend.  If it is practical, I'll actually go and try it (with the coffee shop's permission of course).

[jellies]

I don't think you read your own wiki

"Bitcoin has some exposure to fraudulent double-spending when a transaction is first made, with less and less risk as a transaction gains confirmations."

The whole point of balling up transactions into a block is to agree they are not fraudulent. And that agreement doesn't happen for up to half an hour. Thus, the exposure prior to that while not interesting for a cup of coffee is very interesting for $100 worth of liquor or a $1000 handbag or the majority of other point of sale purchases now done with credit cards!

[Peter R]

I don't think you read your own wiki

"Bitcoin has some exposure to fraudulent double-spending when a transaction is first made, with less and less risk as a transaction gains confirmations."

The whole point of balling up transactions into a block is to agree they are not fraudulent. And that agreement doesn't happen for up to half an hour. Thus, the exposure prior to that while not interesting for a cup of coffee is very interesting for $100 worth of liquor or a $1000 handbag or the majority of other point of sale purchases now done with credit cards!

I acknowledged in "DOUBLE SPEND ATTEMPT #3" that double-spending unconfirmed transactions is possible.  But if you think you can just send out two transactions at the same time and "trick" vendors into giving you free stuff, you are mistaken (the double spend is visible by the network so you'll look like a thief, and besides, you need a custom double spend app to even attempt this).  If you send the double-spend when you leave the store, then the nodes won't propagate it and the miners won't mine it, since those inputs our already spent.  

TLDR: Double spends are difficult to attempt but easy to detect.  

[MikeyVeez]

i love how people exadjurate confirm times required to process a transaction

imagine bitcoin replaced the common banking system (we know it wont, but it can certainly work alongside)

people can store their funds in safety deposit boxes (personal wallet clients)

for ease of use they would put their funds into bank accounts/card issuer EG a certain amount of satoshi's into a third party escrow services/offchain transaction service that's pre-confirmed at deposit, allowing for instant transactions.

then the third party service/bank can move funds across the world instantly to compensate the retailer/recipient and they can be sure its confirmed at the very worse 10 minutes.

Or they cannot do this and pay with normal payment methods lol.