Safe, zero confirmation transaction with trusted party

[Nicolas Dorier]

Some people says that unlike our banking card system, bitcoin need 10 minutes confirmation or more.

But, this is simply not true. By using our current banking card system, we trust a third party. (VISA for example)
If you trust a third party in bitcoin, you can also also implement a zero confirmation paiement.

Imagine that Bob wants to pay Alice, don't want to wait 10 minutes, Alice and Bob does not trust each other.
However, Bob and Alice trust Satoshi.

In the scenario, the solution is that Bob store a small amount of BTC in a 2 of 2 wallet owned by Satoshi and Bob.
When he goes to Alice store, :
-Bob sign the transaction and give to Alice
-Alice sends the transaction to Satoshi,
-Satoshi signs, and record the output so he will never double spend,
-Alice get the fully signed transaction

Now Alice don't have to wait for a confirmation since she trusts that Satoshi will never double spend.
Alice can't spend right now, but that highly unlikely that she wants to spend exactly these coins within the next 10 minutes.

This is what I will respond when people says BTC can't be used for immediate paiement. Am I missing something ?

(I will never mention banks services like Coinbase that can make it immediate, since you are not dealing with real BTC but with their own fiat currency)

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[Peter R]

Some people says that unlike our banking card system, bitcoin need 10 minutes confirmation or more.

But, this is simply not true. By using our current banking card system, we trust a third party. (VISA for example)
If you trust a third party in bitcoin, you can also also implement a zero confirmation paiement.

Imagine that Bob wants to pay Alice, don't want to wait 10 minutes, Alice and Bob does not trust each other.
However, Bob and Alice trust Satoshi.

In the scenario, the solution is that Bob store a small amount of BTC in a 2 of 2 wallet owned by Satoshi and Bob.
When he goes to Alice store, :
-Bob sign the transaction and give to Alice
-Alice sends the transaction to Satoshi,
-Satoshi signs, and record the output so he will never double spend,
-Alice get the fully signed transaction

Now Alice don't have to wait for a confirmation since she trusts that Satoshi will never double spend.
Alice can't spend right now, but that highly unlikely that she wants to spend exactly these coins within the next 10 minutes.

This is what I will respond when people says BTC can't be used for immediate paiement. Am I missing something ?

(I will never mention banks services like Coinbase that can make it immediate, since you are not dealing with real BTC but with their own fiat currency)

Thanks Nicolas.  Your analysis is correct, and 2-of-2 wallets like you mentioned are currently under development.  In fact, I recall seeing a press-release from BitPay about this idea recently.  

[Chemistry1988]

Some people says that unlike our banking card system, bitcoin need 10 minutes confirmation or more.

But, this is simply not true. By using our current banking card system, we trust a third party. (VISA for example)
If you trust a third party in bitcoin, you can also also implement a zero confirmation paiement.

Imagine that Bob wants to pay Alice, don't want to wait 10 minutes, Alice and Bob does not trust each other.
However, Bob and Alice trust Satoshi.

In the scenario, the solution is that Bob store a small amount of BTC in a 2 of 2 wallet owned by Satoshi and Bob.
When he goes to Alice store, :
-Bob sign the transaction and give to Alice
-Alice sends the transaction to Satoshi,
-Satoshi signs, and record the output so he will never double spend,
-Alice get the fully signed transaction

Now Alice don't have to wait for a confirmation since she trusts that Satoshi will never double spend.
Alice can't spend right now, but that highly unlikely that she wants to spend exactly these coins within the next 10 minutes.

This is what I will respond when people says BTC can't be used for immediate paiement. Am I missing something ?

(I will never mention banks services like Coinbase that can make it immediate, since you are not dealing with real BTC but with their own fiat currency)

Isn't that exactly how those bitcoin debit cards work except the price tag is in btc?

[Nicolas Dorier]

Isn't that exactly how those bitcoin debit cards work except the price tag is in btc?

Chemistry, do you have some links about these credit cards ?
I understand well bitcoin, since I'm porting the code into C#, but lack knowledge on the ecosystem yet.

I have not checked very deeply, but to my knowledge, all of the bank/exchange I've seen like Mt Gox, Coinbase, BitPay, they all give you a BTC account, but without you having the private key.

This means that the amount you see on their site web is no different from fiat currency since they don't have to keep the money in the vault.
Are these credit cards not just credit cards on the fiat currency account they show you ?

[luv2drnkbr]

or bob just keeps money with satoshi and tells satoshi to pay alice, and she accepts a zero conf tx from him the second it comes in.  if satoshi is 100% trustworthy, then no need for multisig.

this was the idea behind "green addresses" some exchanges had.  if you got paid from a green address, you knew it was from a "reputable" exchange and could be trusted.

[RUEHL]

Mycelium local trader app has something like a "Transaction Confidence" graph.  

No confirmation required, though high probability of confirmation likely.

Mycelium Local Trader will let anyone be an ATM

[Nicolas Dorier]

or bob just keeps money with satoshi and tells satoshi to pay alice, and she accepts a zero conf tx from him the second it comes in.  if satoshi is 100% trustworthy, then no need for multisig.

The advantage of using multi sig is that you have proof that Bob signed it. You loose this proof if only satoshi signs. (Maybe satoshi got hacked and Bob would never have signed the transaction)
If satoshi is a bad guy, you can't proove he is lying, but your money is gone.

Also, with multi sig, Bob does not give power to Satoshi to become a bank. That is, saying on it's web site that you have 10 BTC while they really possess 1 and using the 9 others.

Mycelium local trader app has something like a "Transaction Confidence" graph.  

You confirmation required, though high probability of confirmation likely.

Mycelium Local Trader will let anyone be an ATM

Excellent thanks for the link, it is awesome.