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Author Topic: Setting up a payment gateway using BitcoinNotify - in a secure way  (Read 685 times)
joepie91
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August 17, 2011, 05:56:44 AM
 #1

A small tl;dr for those that haven't used or looked at BitcoinNotify: they offer a service where they can monitor an address in the blockchain for you and send you a notification (for example in the form of a callback to a script on your site) so that you can be notified of successful payments *without* having to trust a third party with your Bitcoins.

Now the obvious issue is that BitcoinNotify would be able to make fake callbacks to make transactions 'go through' that never happened - because, let's face it, people are paranoid about things to do with money. I'm not saying that the people behind BitcoinNotify are untrustworthy, but let's just assume for the sake of this proposal that they would send out fake callbacks.

My proposal is a very simple one - more of these notification services. Independent services that all do roughly the same, making a (double) callback when a payment is seen to be received. Now the trick would be to require a callback from all of the notification providers before a payment actually 'goes through' (or almost all of the providers, to cope with providers that suffer from downtime). Someone would have to have access to all of these providers to make a fake notification go through.

Possible issues I see:
1. Taking out all of these notification providers with a DDoS attack would effectively disable someones ability to process payments - but then again, this is the same for a payment gateway (which would have a single point of failure, unlike this proposal).
2. Notification providers may disappear over time, and new ones may appear, meaning a business owner has to maintain some sort of list of notification providers.
3. To successfully pull this off, some sort of standard would have to be created for Bitcoin payment callbacks.

Thoughts?

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BitcoinNotify.com
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September 12, 2011, 07:04:17 PM
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@joepie91: this is great idea. It is the next step in a trend to not relying on a (single) 3rd party when it comes to your money.
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September 12, 2011, 07:16:10 PM
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Yes, but how can you be sure, that if you have three or even 20 services like it, they are not all controlled by the same.
Because, if you make one, it will be easy to duplicate it and put under another name.

You will need some trusted thirdparties.



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Jonathan Ryan Owens
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September 20, 2011, 04:44:37 PM
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The processing and time cost involved in effectively double spending, or doing anything close to what you're all talking about is very high. For small items, virtual items etc, you shouldn't be worried at all. Not even a little bit. Now, if that changes and you DO have something to worry about, it'll be broadcast far and wide, and you'll hear about it.

In 3 weeks, I took 2500 Bitcoins as deposits, with 0 confirmations, and I never had an imbalance.

-Jonathan

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