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I would go further to say that for a large portion of merchant transactions, confirmations are a non-issue. It is not trivial to pull off a double spend and no
by sfjailbird 6y ago
I would go further to say that for a large portion of merchant transactions, confirmations are a non-issue. It is not trivial to pull off a double spend and no one is going to do it for a cup of coffee. The miniscule number of times that it might happen could be written off as the cost of doing business, the same way the big credit card companies quietly eat all the credit card fraud that happens.
- joshstrange 6y agoAlso, and I could be mistaken, my understanding is the double spend can only happen when the person trying to double spend controls the private/public key to the coins. Normally when you deposit crypto in an exchange (or this hypothetical Paypal wallet) you lose that access and your balance is just a row in a database while "your" coins are swept into a large hot/cold wallet run by the service you are depositing into.
- doomroot 6y agoThis is correct. Customer double spend risk is not what’s ring discussed here. The risk is PayPal losing money on the spread. A user buys a pair of shoes with bitcoin, PayPal pays the shop owner fiat and takes ownership of the bitcoin. Now PayPal is on the hook for selling that bitcoin if they want to keep their cash flow in fiat. The price of bitcoin can move wildly in the time it takes for a Bitcoin transaction to settle. In reality PayPal is a huge company and can sell to many brokers who will take on the risk for PayPal.