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A lot of merchants ask for 3+ confirmations, and sometimes 1 confirmation can even take 20 minutes. Paypal and credit cards take seconds. And $20 for a wire tr

A lot of merchants ask for 3+ confirmations, and sometimes 1 confirmation can even take 20 minutes. Paypal and credit cards take seconds. And $20 for a wire transfer pales in comparison to the fees people charge for converting bitcoin to cash https://localbitcoins.com/ https://localbitcoins.com/ Yes transferring large sums of money internationally is useful, but it is a niche, and bitcoin doesn't even do it that cheaply.

Geee 7y ago
Bitcoin transactions are instant. You get the 0-conf transaction instantly and are able to buy stuff. The 30 minutes for 3 confirmations are basically the 'chargeback' time, which is about 2 weeks with credit cards. In day-to-day business, people usually trust 0-conf transactions, or are able to handle the chargeback.
- dorgo 7y ago
  How does a 0-conf transaction work? I mean, without confirmations the transaction is not on the blockchain. It basically doesn't exist. Is it just a promise that I will pay a bitcoin in the future?
  - maxhille 7y ago
    The seller now has the buyer-signed transaction as it will (hopefully) be recorded on the blockchain. Common wallets will also already deduct the paid amount.
  - Geee 7y ago
    It means that it has been sent to the Bitcoin network to be mined in the next block.
    - fauigerzigerk 7y ago
      Could the sender simply cancel it?
      - chrisrhoden 7y ago
        No. Once a valid, signed transaction is _out there_, any miner can (and is generally incentivized to) add it to a block. The closest thing to cancelling is making a new transaction which makes the first one invalid (e.g. by emptying the source address) and hoping the new one gets added to the block first. Because transactions can have fees attached to them, you could presumably make it more appealing to mine the second transaction than the first, but I don't know if this is something people do, and as far as I understand it most miners prefer the first transactions they see.
      - lmpostor 7y ago
        to expand on the "replacing" there is a mechanism called replace by fee, so it becomes a question of incentives The payment processors can scan the mempool for transactions that would invalidate the initial transaction, so then it would be a question of lead time. Great for digital services etc, not so great for in life purchases. So if you absolutely 100% need confirmation, then yeah 10 minutes is what you need to wait, but that again is a question of probability comparative to credit card chargebacks/fees etc. Even the next block inclusion isn't a guarantee... it just means that you have at current prices approximately 200k insurance. With enough resources and luck, someone could +EV roll back your transaction, but the cost scales exponentially. The current viable solution for small inperson transactions is pretty much replicating the banking system. Current versions of abstracting the banking system into something decentralized are clunky/buggy to say the least.
novalis78 7y ago
Cash handling is expensive (cash pickup logistics, compliance fees, banking fees, insurance fees, you name it). But it IS from one bearer instrument (cash) to another bearer instrument (Bitcoin) - and that’s hugely valuable. Wire transfer fee at Suntrust for instance is currently at $50, for example: https://transferwise.com/us/blog/international-transfer-suntrust-us https://transferwise.com/us/blog/international-transfer-sunt... https://www.suntrust.com/content/dam/suntrust/us/en/personal-banking/2019/documents/fs-retail-english.pdf https://www.suntrust.com/content/dam/suntrust/us/en/personal...

Geee 7y ago

Bitcoin transactions are instant. You get the 0-conf transaction instantly and are able to buy stuff. The 30 minutes for 3 confirmations are basically the 'chargeback' time, which is about 2 weeks with credit cards. In day-to-day business, people usually trust 0-conf transactions, or are able to handle the chargeback.

dorgo 7y ago
How does a 0-conf transaction work? I mean, without confirmations the transaction is not on the blockchain. It basically doesn't exist. Is it just a promise that I will pay a bitcoin in the future?
- maxhille 7y ago
  The seller now has the buyer-signed transaction as it will (hopefully) be recorded on the blockchain. Common wallets will also already deduct the paid amount.
- Geee 7y ago
  It means that it has been sent to the Bitcoin network to be mined in the next block.
  - fauigerzigerk 7y ago
    Could the sender simply cancel it?
    - chrisrhoden 7y ago
      No. Once a valid, signed transaction is _out there_, any miner can (and is generally incentivized to) add it to a block. The closest thing to cancelling is making a new transaction which makes the first one invalid (e.g. by emptying the source address) and hoping the new one gets added to the block first. Because transactions can have fees attached to them, you could presumably make it more appealing to mine the second transaction than the first, but I don't know if this is something people do, and as far as I understand it most miners prefer the first transactions they see.
    - lmpostor 7y ago
      to expand on the "replacing" there is a mechanism called replace by fee, so it becomes a question of incentives The payment processors can scan the mempool for transactions that would invalidate the initial transaction, so then it would be a question of lead time. Great for digital services etc, not so great for in life purchases. So if you absolutely 100% need confirmation, then yeah 10 minutes is what you need to wait, but that again is a question of probability comparative to credit card chargebacks/fees etc. Even the next block inclusion isn't a guarantee... it just means that you have at current prices approximately 200k insurance. With enough resources and luck, someone could +EV roll back your transaction, but the cost scales exponentially. The current viable solution for small inperson transactions is pretty much replicating the banking system. Current versions of abstracting the banking system into something decentralized are clunky/buggy to say the least.

novalis78 7y ago

Cash handling is expensive (cash pickup logistics, compliance fees, banking fees, insurance fees, you name it). But it IS from one bearer instrument (cash) to another bearer instrument (Bitcoin) - and that’s hugely valuable. Wire transfer fee at Suntrust for instance is currently at $50, for example: https://transferwise.com/us/blog/international-transfer-suntrust-us https://transferwise.com/us/blog/international-transfer-sunt... https://www.suntrust.com/content/dam/suntrust/us/en/personal-banking/2019/documents/fs-retail-english.pdf https://www.suntrust.com/content/dam/suntrust/us/en/personal...