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Why would you need to wait for it to confirm? Make sure to have access to liquidity so you can set the trade the second it is likely the transaction will confir

Why would you need to wait for it to confirm? Make sure to have access to liquidity so you can set the trade the second it is likely the transaction will confirm at some point. That's how the big payment processors do it. You need liquidity to process payments on a non trivial scale, but that's par for the game for banks, credit cards companies, paypal, and everyone else in this space. Waiting for a confirmation will do you no good anyway. No exchange accepts any less than six, which would have you take the exchange risk for over an hour. That's not a very good business case.

StavrosK 9y ago
Because unconfirmed payments can be trivially rolled back.
- xorcist 9y ago
  Yes, I believe this must be a priced-in risk. You just cancel the payment at this point, of course (no items will have shipped in that short time span anyway) but you still have to take the exchange risk. If you look at OTC trades on distributed exchanges, you will see that this strategy takes place there too. Make a trade, and finalize only if the exchange rate moves in that favor, otherwise cancel. Most places have reputation systems in place to suppress that behavior but they have their own problems. There's likely no ideal solution. (Also do note that one confirmation is likely not enough anyway if you want to avoid rolled back transactions. Orphan blocks aren't really that uncommon.)
  - StavrosK 9y ago
    > no items will have shipped in that short time span anyway It's too late for GOG to take back its game, I've already downloaded it in the five minutes it took you to realize I've rescinded my payment.
    - gberger 9y ago
      But in digital downloads they don't lose much, do they? The kind of people who would use this loophole would pirate the game.
      - twanvl 9y ago
        They might have to buy keys from the publisher. They can't give out a 'stolen' key again, because then paying customers wouldn't be able to activate or download their game.
        dawnerd 9y ago
        Just the cost of business. They’ll write it off as a loss and move on. Maybe banning you If they think it’s fraudulent.
    - xorcist 9y ago
      It is, and for certain types of goods it might make sense to wait for the full six confirmations. High fraud rate industries have had years of experience with similar strategies for the credit card system. Payments on the globally replicated blockchain can not be both quick and secure. Many soda machine experiments faced this exact problem. What all of them did in practice was the same thing as all restaurants and pubs do, eat the risk. Any guest who wanted to leave without paying, or pirate your game, would do exactly that anyway and not bother with faking payments in the first place. Every pub and café owner takes the exact same risk even when settling in cash. People leave without paying all the time. The specific example of game keys you mentioned has some interesting aspects to it however! Trustless zero knowledge swaps have been demonstrated between them and Bitcoins, which could open for some exciting business ideas that were not possible before.

StavrosK 9y ago

Because unconfirmed payments can be trivially rolled back.

xorcist 9y ago
Yes, I believe this must be a priced-in risk. You just cancel the payment at this point, of course (no items will have shipped in that short time span anyway) but you still have to take the exchange risk. If you look at OTC trades on distributed exchanges, you will see that this strategy takes place there too. Make a trade, and finalize only if the exchange rate moves in that favor, otherwise cancel. Most places have reputation systems in place to suppress that behavior but they have their own problems. There's likely no ideal solution. (Also do note that one confirmation is likely not enough anyway if you want to avoid rolled back transactions. Orphan blocks aren't really that uncommon.)
- StavrosK 9y ago
  > no items will have shipped in that short time span anyway It's too late for GOG to take back its game, I've already downloaded it in the five minutes it took you to realize I've rescinded my payment.
  - gberger 9y ago
    But in digital downloads they don't lose much, do they? The kind of people who would use this loophole would pirate the game.
    - twanvl 9y ago
      They might have to buy keys from the publisher. They can't give out a 'stolen' key again, because then paying customers wouldn't be able to activate or download their game.
      - dawnerd 9y ago
        Just the cost of business. They’ll write it off as a loss and move on. Maybe banning you If they think it’s fraudulent.
  - xorcist 9y ago
    It is, and for certain types of goods it might make sense to wait for the full six confirmations. High fraud rate industries have had years of experience with similar strategies for the credit card system. Payments on the globally replicated blockchain can not be both quick and secure. Many soda machine experiments faced this exact problem. What all of them did in practice was the same thing as all restaurants and pubs do, eat the risk. Any guest who wanted to leave without paying, or pirate your game, would do exactly that anyway and not bother with faking payments in the first place. Every pub and café owner takes the exact same risk even when settling in cash. People leave without paying all the time. The specific example of game keys you mentioned has some interesting aspects to it however! Trustless zero knowledge swaps have been demonstrated between them and Bitcoins, which could open for some exciting business ideas that were not possible before.