bitcoin is failing in replacing fiat in physical shops

[Robert Paulson]

This whole malleability fiasco has shown once again that zero confirmation transactions can not be trusted.

since its not practical waiting for 10 minutes for a payment to clear when buying coffee it seems to me that bitcoin will never go mainstream in physical shops.
any solution involving a third party to clear payments defeats the whole purpose of bitcoin.

any third party will effectively turn into a bank along with all the classical fractional reserve practices we have today.

[jongameson]

true.  what about Fastcoin

[howardb]

This whole malleability fiasco has shown once again that zero confirmation transactions can not be trusted.

since its not practical waiting for 10 minutes for a payment to clear when buying coffee it seems to me that bitcoin will never go mainstream in physical shops.
any solution involving a third party to clear payments defeats the whole purpose of bitcoin.

any third party will effectively turn into a bank along with all the classical fractional reserve practices we have today.

What you are not taking account of is transaction size. Bitpay (for example) allows the vendor to choose the confirmation level (risk), and they usually do it based on the transaction size. So a Starbucks isn't going to wait for confirmation or 1 at most, but your local BMW dealer will probably say 'come back in an hour'.

The key here is that retailers have absolutely nothing to lose, and much to gain by accepting BTC, it's just going to take time for the Bitpays of this world to grow enough to make the difference we are all waiting for.

On a slightly more optimistic note, the delays and problems as your correctly point out are all caused by having to deal with third parties. Thats only going to happen whilst we still need to convert to pesky fiat. Consider what happens when we reach tipping point, and vendors start holding/using BTC rather than fiat!

[lnternet]

Spending outputs from zero conf tx cause a problem.
Zero conf tx themselves do not.

[yatsey87]

A lot of altcoins can confirm in 30 seconds.

So why is bitcoins confirmation at 10 minutes?

Is a 10 minute confirmation a good thing or bad?

Is it possible for bitcoins confirmation time to be sped up?

Which coins are fully confirmed in 30 seconds?

[DannyHamilton]

A lot of altcoins can confirm in 30 seconds.

So why is bitcoins confirmation at 10 minutes?

Because that is the way it was created.  It is essentially an arbitrary attempt to balance fast confirmations against the costs of orphaned blocks due to network latency.

Is a 10 minute confirmation a good thing or bad?

Yes.

Is it possible for bitcoins confirmation time to be sped up?

Technically possible?  Yes.

Practicially possible?  No.

[franky1]

This whole malleability fiasco has shown once again that zero confirmation transactions can not be trusted.

since its not practical waiting for 10 minutes for a payment to clear when buying coffee it seems to me that bitcoin will never go mainstream in physical shops.
any solution involving a third party to clear payments defeats the whole purpose of bitcoin.

any third party will effectively turn into a bank along with all the classical fractional reserve practices we have today.

bitcoin is already available in atleast 30k businesses so part of your statement is false.

but when it comes to fiat.. bank transfers take 3-5 days, bank notes have a daily withdrawal limit. and as such debit/credit cards were used to solve these issues.
at the moment a few companies are working on a payment method that you deposit into and use for your pocket money needs. and as such because its deposited(preconfirmed) into a company that other businesses will trust. then INSTANT transactions can occur. either onchain or offchain.

visa/mastercard is a layer ontop of bank fiat.
these pocketmoney services are a layer ontop of bitcoin.

and as for the title of your thread. bitcoin is not even trying to replace fiat. its succeeding in working alongside fiat.

[yatsey87]

A lot of altcoins can confirm in 30 seconds.

So why is bitcoins confirmation at 10 minutes?

Is a 10 minute confirmation a good thing or bad?

Is it possible for bitcoins confirmation time to be sped up?

Which coins are fully confirmed in 30 seconds?

Supposedly quark.

But fastcoin and goldcoin seemed to confirm quickly for me.

Fully confirm or just get their first few confirmations?

[CryptoPanda]

Anything below 1 min for block confirmation will have like 10 to 30% stall rate.

10min is ok, once they deal with that problem instant payment for small amounts will be ok again

all those bumps are normal and happen with everything new

[Robert Paulson]

and as such because its deposited(preconfirmed) into a company that other businesses will trust. then INSTANT transactions can occur. either onchain or offchain.

offchain transactions are not bitcoin.
any business which will accept numbers stored in some companies database as bitcoin is basically using that company as a bank.
history shows that eventually this bank company will start issuing more database bitcoins then there are actual bitcoins on the block chain (e.g fractional reserve).

[BTCisthefuture]

There's already systems in place that allow day to day purchases to go through without 1 confirmation and the risk is low enough that companies like coinbase and bitpay are willing to take the risk.  As someone else said earlier, you don't have to wait for confirmation at your local coffee shop or restaurant but you will have to wait 10-20 minutes at your local car dealership.  This seems more than reasonable.

As far as the issue that got a lot of attention this week,  a fix has already started to roll out (exchanges are already allowing btc withdrawals again) and it's also worth noting that at no point did payment providers like coinbase or bitpay stop accepting 0 confirmation transactions from local merchants (as far as I know)

In summary  , it's a non issue  imo.  

[Robert Paulson]

There's already systems in place that allow day to day purchases to go through without 1 confirmation and the risk is low enough that companies like coinbase and bitpay are willing to take the risk.

the risk is low right now because bitcoin is still far from mainstream and fraudster bitcoin wallets that double spend every single transaction are not yet popular and available for download.
when such malicious wallets start gaining popularity the amount of double spending fraud will skyrocket and companies like bitpay will either not accept 0 conf transactions or they will charge higher fees to cover the risk of double spends

[DannyHamilton]

and as such because its deposited(preconfirmed) into a company that other businesses will trust. then INSTANT transactions can occur. either onchain or offchain.

offchain transactions are not bitcoin.
any business which will accept numbers stored in some companies database as bitcoin is basically using that company as a bank.

Some examples of this would be:
MtGox
BitStamp
BTC-E
CoinBase

history shows that eventually this bank company will start issuing more database bitcoins then there are actual bitcoins on the block chain (e.g fractional reserve).

So, if you had to venture a guess, which of the already existing "bitcoin banks" do you suppose are already engaged in fractional reserve?

[DannyHamilton]

Fully confirm or just get their first few confirmations?

I don't understand the question.

What does the phrase "fully confirm" mean?

[yatsey87]

Fully confirm or just get their first few confirmations?

I don't understand the question.

What does the phrase "fully confirm" mean?

Ie you can spend them.

[BTCisthefuture]

There's already systems in place that allow day to day purchases to go through without 1 confirmation and the risk is low enough that companies like coinbase and bitpay are willing to take the risk.

the risk is low right now because bitcoin is still far from mainstream and fraudster bitcoin wallets that double spend every single transaction are not yet popular and available for download.
when such malicious wallets start gaining popularity the amount of double spending fraud will skyrocket and companies like bitpay will either not accept 0 conf transactions or they will charge higher fees to cover the risk of double spends

Bitcoin is arguably the #1 form of 'currency' online criminals now use. To think no has ever thought of or attempted some sort of wallet that double spends everything is quite absurd.  If this was a real issue it would already have started to pop up somewhere out there in online world, there's simply too much money to be made for it not to have.

You're talking about a hypothetical that doesn't even seem very likely at all.  If someday something like that were to occur there are again things in place that could be done to help mitigate the threat.  Again, I view it as a non issue.  The 1% flat fee (or less depending on payment plan) that bitcoin payment providers are currently providing seems more than reasonable to maintain a healthy profit while still taking on the limited risk of double spending.

[DannyHamilton]

Fully confirm or just get their first few confirmations?

I don't understand the question.

What does the phrase "fully confirm" mean?

Ie you can spend them.

Assuming that the transactionID is not modified by any peers, unconfirmed transactions (0 confirms) can be spent.  I have one this on multiple occasions.  If the transactionID is modified by a peer, then the transaction can be spent as soon as it has its first confirmation.  Of course, if that confirmation is from a block that gets orphaned, and the resulting transaction is then modified by a peer, then it would be safer to wait for 2 confirmations.  The more confirmations you wait for, the lower the risk that the transaction is in a block that will become orphaned.  Given this, at what point can you "spend them"?

[Robert Paulson]

There's already systems in place that allow day to day purchases to go through without 1 confirmation and the risk is low enough that companies like coinbase and bitpay are willing to take the risk.

the risk is low right now because bitcoin is still far from mainstream and fraudster bitcoin wallets that double spend every single transaction are not yet popular and available for download.
when such malicious wallets start gaining popularity the amount of double spending fraud will skyrocket and companies like bitpay will either not accept 0 conf transactions or they will charge higher fees to cover the risk of double spends

Bitcoin is arguably the #1 form of 'currency' online criminals now use. To think no has ever thought of or attempted some sort of wallet that double spends everything is quite absurd.  If this was a real issue it would already have started to pop up somewhere out there in online world, there's simply too much money to be made for it not to have.

You're talking about a hypothetical that doesn't even seem very likely at all.  If someday something like that were to occur there are again things in place that could be done to help mitigate the threat.  Again, I view it as a non issue.  The 1% flat fee (or less depending on payment plan) that bitcoin payment providers are currently providing seems more than reasonable to maintain a healthy profit while still taking on the limited risk of double spending.

when you pay online the website you're paying to most likely doesn't accept 0 conf transactions, and customers have no problem waiting for 10 minutes at home on their computer for the payment to clear,
this will not work in a physical shop where you expect the payment to clear within 1 min maximum time.

the reason there is no double spending fraud happening in the physical world is because bitcoin is not widespread in physical stores yet.

frankly i don't see a solution to this problem we might just have to accept that bitcoin only has the advantage over the existing system in places where its acceptable to wait for at least 10 minutes for a payment to clear, which means it will probably never be accepted in starbucks or mcdonalds types of places.

i only fear that eventually we could end up doing all transactions offchain which will be the end of bitcoin as it will allow fractional reserve banking and return us to the corrupt system we already have in place today.

[BittBurger]

Bitcoin is a protocol which can be built on top of.

Bitcoin is not the end-all be-all to its own functionality. 

Services can be created on top of the Bitcoin protocol which provide instant transactions necessary for different types of commerce.

We need to stop thinking of Bitcoin itself as the "whole package". 

It is a foundational layer like TCP/IP.  On top of that layer, you've got Ebay, Monster, Esurance, Napster (lol)...etc

On top of Bitcoin you've already got MasterCoin Foundation, Gyft, and even insurance services guaranteeing the security of your wallets.

Much more is coming.

-B-

[Peter R]

The malleability attack has given posters a lot of yummy troll food [writing in 16 pt font is strong evidence of trollishness, argument notwithstanding].  These posters will now attempt to muddle the malleabilty issue, stretching its consequences beyond all reason.

Here is a great synopsis of what you need to know about malleability, written by an expert: https://bitcointalk.org/index.php?topic=460944.0

OLD THINKING:

Zero-confirm transactions between customer and merchant are highly reliable provided the transaction is accepted by the network and no double spends are detected.  

To invalidate the transaction, the customer would have to be in cahoots with a nefarious miner in order to add a fradualent transaction to the miner's memory pool without the knowledge of the network.  This is a lot of work for coffee, and will only be successful in proportion to the amount of hash power the nefarious miner controls.

NEW THINKING (until malleability is eliminated):

Zero-confirm transactions between customer and merchant are highly reliable provided the transaction is accepted by the network and no double spends are detected and provided the transaction does not use unconfirmed change outputs when the network is under malleability attack.

The malleability attack has revealed a vulnerability of a certain subset of zero-confirm transactions, namely ones built using unconfirmed change inputs.  While the core developers work to eventually eliminate malleability entirely, new wallets will disallow transactions that could potentially cause confusion.  

Bitcoin is and will continue to be suitable for zero-confirm payments for low-value purchases.