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Author Topic: Ok, but seriously how will I pay for my $250 grocery bill with bitcoin?  (Read 2694 times)
bitcoinbeliever
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June 16, 2014, 01:00:48 AM
 #41

What about the concept of detecting double spends in bitcoin nodes and notifying merchant? ... If no second transaction is seen in 10 seconds it is considered 'safe'.
It would help further if nodes that detected double-spends either relayed them, or, better, relayed an alert that a double-spend was being attempted.

Good questions.  Everyone sees that the decentralized bitcoin system can't have complete, immediate protection from the effects of 0-conf double-spends, but that is totally different from saying that the situation cannot be improved immensely.  Some improvements that can be made are:

1 - Agree that 0-conf double spends should be made more difficult, not easier (there are actually people who disagree).
2 - Per inner quote above, wallets should immediately and loudly notify their users of double-spends.  Amazingly, I am not aware of a single wallet that does this!  Please post if I am missing one or more.  The reason you notify the user is that they may not yet have handed over the merchandise.
3 - Per outer quote above, the network should relay, and not drop, double-spends.  This makes #2 above much more effective.  The actual double-spend transaction is the best alert, because it is signed by the person double-spending.  Anything else would require a trusted 3rd party.
5 - Longer-term, before giving up on the bitcoin protocol, we should ask how to incentivize miners NOT to include second-spends in blocks.  For example, I have never seen a reason why this idea from 2011 could not reduce the unsafe period for 0-conf double spends to only seconds, instead of many minutes https://bitcointalk.org/index.php?topic=3441.msg48484#msg48484

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onemorebtc
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June 16, 2014, 01:06:57 AM
 #42

What about the concept of detecting double spends in bitcoin nodes and notifying merchant? ... If no second transaction is seen in 10 seconds it is considered 'safe'.
It would help further if nodes that detected double-spends either relayed them, or, better, relayed an alert that a double-spend was being attempted.

Good questions.  Everyone sees that the decentralized bitcoin system can't have complete, immediate protection from the effects of 0-conf double-spends, but that is totally different from saying that the situation cannot be improved immensely.  Some improvements that can be made are:

1 - Agree that 0-conf double spends should be made more difficult, not easier (there are actually people who disagree).

i disagree...
i dont like false security measures which give people the impression something is safe when it is not.

and i still hope for the feature to resend a tranaction with a higher fee if it gets stuck

2 - Per inner quote above, wallets should immediately and loudly notify their users of double-spends.  Amazingly, I am not aware of a single wallet that does this!  Please post if I am missing one or more.  The reason you notify the user is that they may not yet have handed over the merchandise.
right, i'd love that feature as well
3 - Per outer quote above, the network should relay, and not drop, double-spends.  This makes #2 above much more effective.  The actual double-spend transaction is the best alert, because it is signed by the person double-spending.  Anything else would require a trusted 3rd party.
no, this is to easy to use for spamming the network with transactions.
but maybe we can use an overlay network for that?
5 - Longer-term, before giving up on the bitcoin protocol, we should ask how to incentivize miners NOT to include second-spends in blocks.  For example, I have never seen a reason why this idea from 2011 could not reduce the unsafe period for 0-conf double spends to only seconds, instead of many minutes https://bitcointalk.org/index.php?topic=3441.msg48484#msg48484
not sure.... dont think its possible at all to make it safe as the attacker does not have to publish his double spend attempt before the fact - only his miner needs to know it of course

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June 16, 2014, 07:19:52 AM
 #43

What about just prepaying BTC for later use?  I do this all the time on e.g. namecheap.  I'll spend the credit eventually, I don't really mind.  I understand the merchant's needs.

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Brangdon
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June 16, 2014, 09:56:30 AM
 #44

3 - Per outer quote above, the network should relay, and not drop, double-spends.  This makes #2 above much more effective.  The actual double-spend transaction is the best alert, because it is signed by the person double-spending.  Anything else would require a trusted 3rd party.
As long as the double-spend is relayed in a way that no-one will confuse with a single-spend. They shouldn't be relayed as a normal transaction.

Possibly the alert should embed both transactions. That makes it a neat, clear-cut proof of attempted fraud in a single message. Then again, normally the alert is being sent to the same nodes that the original transaction was relayed to, so perhaps that's not necessary.

no, this is to easy to use for spamming the network with transactions.
Only the first double-spend needs to be relayed; subsequent ones can be dropped because a single double-spend transaction is enough to establish that a double-spend attempt is in progress and alert the merchant. So spamming is limited.

If you want to limit it more, only relay/alert double spends if the amount is, say, at least triple the current dust level. So a spammer can either send a million transactions with 5431 satoshi each, or 333,333 with 16293 satoshi each plus 333,333 "free" double-spends alerts. The cost to the spammer is the same, as is the bandwidth cost to the network. (And the double-spends don't get added to the block-chain so we gain there.) In practice, 16293 satoshi is small enough that thieves aren't going to bother trying to double-spend it, and most merchants can accept the risk that they will.

(We can juggle the numbers depending on the actual cost of the alert, and whatever the dust level is nowadays, but you get the idea.)

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June 16, 2014, 01:19:05 PM
 #45

When I were a lad, the question was "But seriously, how will I pay for my $25 grocery bill with bitcoin?"
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