Hmmm OK. So 10 seconds won't work. What about trimming that time down a little bit?
The whole point of waiting for 6 confirmations is to wait for an hour's worth of blocks to be hashed out. If you had 1 block a minute you'd want to wait for 60 confirmations. 6 confirmations isn't just some magical number that never changes based on the target block rate being shorter or longer.
Not nessesarily, it could also be reducing the chance to double-spend by a major holder to unprofitable. For example, assume someone is trying to attack http://bitcoinlaundry.com/
. Since they charge a 5% fee, any attempt to double-spend is unprofitable if the chance of getting 6 confirmations (I assume this is when the laundry sends the coins) in a row (or 7 blocks) falls below 5%. So in this case, bitcoinlaundry wouldn't care about how long or short blocks are (to a certain extent).
As satoshi detailed in his whitepaper, the issue is network latency. It takes around 3 seconds for a block to spread around the entire network, and this is only 0.5% of the 10-minute block time. Cancer node attack is possible if this percentage rises. In 10-second blocks, this is 30% of the block time, so the attacker can broadcast a tx and a confirming block(s) to a certain group of nodes, and not to others. A fork is now very likely in this time so long as the attacker only broadcasts his own blocks only to that certain group of nodes. Once the other blockchain catches up, the attacker could either have lost nothing but some cpu time or fees, or have pulled off a successful double spend.
Satoshi believed 10 minutes to be this magic number. There is no proof that this is the best number, and only one attack maybe due to short block times (the myBitcoin incident) has been reported, but that attack could possibly just as well be pulled off with a standard 2-blocks-in-a-row (deepbit or btcguild or slush, for example, certainly had the capability, even though evidence suggest it isn't them). It is likely that ten minutes is too long, but we still don't know if anything else is better.