4 ms·

Anything where the buyer doesn't leave 15-30 mins after making the payment or the purchaser is id'd.

anonporridge 5y ago
This is why it's always been absurd to believe that standard retail purchases would be regularly done with layer 1 base chain transactions. You can't even say that you're ok with waiting for 1 block confirmation, because the time between each block is only an average of 10 minutes, with high variance. It's fairly common to experience over an hour between blocks, or as little as a minute. The security and confirmation of a transaction is not a function of number of blocks, but time since inclusion in a block and total amount of work (hashes) piled on top of your transaction. Generally, 6 blocks (1 hour on average) is considered sufficient certainty of immutability for normal functioning of the blockchain (i.e. not under active attack). One hour for final, and completely irreversible, settlement is absurdly fast in the context of the traditional financial system, which takes days at least for final settlement, and can be much longer for some international transfers. Small, individual scale purchases only really make sense to do on higher layer transaction protocols, like lightning network (non-custodial and open) or some custodial networks (like a bitcoin backed Visa credit card). The only model that makes sense for bitcoin is the layer one base chain is a settlement network, with payment networks build on top that aggregate many transactions into one on chain transaction. Think OSI model for networking.
- AniseAbyss 5y ago
  Instantaneous payments exist, I use them several times a day, with traditional banking. I never quite understood what problem bitcoin was supposed to solve beyond anonymity.
  - anonporridge 5y ago
    These are instant payments, not instant settlement. Your bank abstracts the underlying inter bank settlement complexity and aggregates all the minor transactions and transfers that individuals do to a small number of larger settlement transactions, likely on the SWIFT network. When you make a payment, that transfer of money isn't instantly settled. The instantaneous feeling is a service that the bank provides you, but it's an illusion. There are similar experiences being built now on top of bitcoin, like http://strike.me http://strike.me, although the lightning network that Strike and CashApp are building upon actually is instant finality, unlike Visa/Paypal. This is why comparing bitcoin to Visa or PayPal is fundamentally flawed, since those are both layer 2/3 networks on top of SWIFT. The proper comparison is with other settlement networks that create finality, like SWIFT. Where SWIFT may take days to create final settlement of a transfer, bitcoin takes ~1 hour depending on how much confidence you want. Where SWIFT is secured by nation state monopolies on violence and global banking gatekeeping, bitcoin is secured by the most powerful computer network on the planet that no single nation state has the power to disrupt. Bitcoin is open and permissionless and anyone and everyone can join. SWIFT is tightly permissioned because it relies heavily on exclusive networks of humans who trust each other.
    - pgwhalen 5y ago
      At a high level this comment is correct, but SWIFT is not a settlement network. A message on the network does not actually represent the movement of money between accounts.
  - smolder 5y ago
    Bitcoin only gives you a pseudonym wallet ID. I'd say it's less anonymous than cash, since everyone has the ledger.
  - Gigachad 5y ago
    I'm not convinced bitcoin solves _any_ problems at all. It isn't anonymous at all, exchanges are the gatekeepers of the whole system and they have to comply with local laws. Canada was found to be directing exchanges to not allow cashing out of certain coins and putting the coins through a mixer just automatically blacklists them from being cashed out. Bitcoin does not provide sufficient privacy which allows exchanges to freeze tainted coins and authorities to track down real identities.
- TedDoesntTalk 5y ago
  > The only model that makes sense for bitcoin is the layer one base chain is a settlement network, with payment networks build on top that aggregate many transactions into one on chain transaction. Think OSI model for networking. Do you think this applies to cyrptocurrencies that has faster confirmations/block generation? Or is only important when there is a lengthy confirmation?
  - anonporridge 5y ago
    The only thing that really matters is how much work has been built up on top of the transaction. Shorter block times doesn't change that function at all. In a version of bitcoin with 1 minute block times, the security guarantee of 60 blocks is identical to the current security guarantee of 6 blocks, because it would be exactly the same amount of energy going into mining to create immutability. The amount of work (hashes) represents a real world cost (electricity and mining chips) that can't be undone without massive commitment of these real world resources. This is the foundation of why bitcoin works. So basically, people who say their blockchain with shorter block times is "faster" are either fools who don't understand what's going on or conmen trying to pump and dump their bags. Layer one transaction confirmation is about settlement finality, not how fast you can pay for coffee.
    - schoen 5y ago
      I think the faster block times help with conceivably making it possible to use 1 confirmation instead of 0 confirmations for in-person transactions, as opposed to than 60 instead of 6. That tilts the odds of winning in a double-spend fraud attempt in favor of the merchant quite a bit, compared to 0 confirmations, although I don't know how to model by how much. (You could empirically estimate by how much by looking at abandoned chain history in a real network, though.)
    - bavell 5y ago
      Great answer. This is related in my mind to the framing of crypto "pointlessly wasting" electricity - it's actually a fundamental part of securing the network by making it prohibitively expensive to reverse or modify mined blocks. I'm open to alternatives to PoW but so far it's been the most successful tool to solve this problem.

This is why it's always been absurd to believe that standard retail purchases would be regularly done with layer 1 base chain transactions. You can't even say that you're ok with waiting for 1 block confirmation, because the time between each block is only an average of 10 minutes, with high variance. It's fairly common to experience over an hour between blocks, or as little as a minute. The security and confirmation of a transaction is not a function of number of blocks, but time since inclusion in a block and total amount of work (hashes) piled on top of your transaction. Generally, 6 blocks (1 hour on average) is considered sufficient certainty of immutability for normal functioning of the blockchain (i.e. not under active attack). One hour for final, and completely irreversible, settlement is absurdly fast in the context of the traditional financial system, which takes days at least for final settlement, and can be much longer for some international transfers. Small, individual scale purchases only really make sense to do on higher layer transaction protocols, like lightning network (non-custodial and open) or some custodial networks (like a bitcoin backed Visa credit card). The only model that makes sense for bitcoin is the layer one base chain is a settlement network, with payment networks build on top that aggregate many transactions into one on chain transaction. Think OSI model for networking.

AniseAbyss 5y ago
Instantaneous payments exist, I use them several times a day, with traditional banking. I never quite understood what problem bitcoin was supposed to solve beyond anonymity.
- anonporridge 5y ago
  These are instant payments, not instant settlement. Your bank abstracts the underlying inter bank settlement complexity and aggregates all the minor transactions and transfers that individuals do to a small number of larger settlement transactions, likely on the SWIFT network. When you make a payment, that transfer of money isn't instantly settled. The instantaneous feeling is a service that the bank provides you, but it's an illusion. There are similar experiences being built now on top of bitcoin, like http://strike.me http://strike.me, although the lightning network that Strike and CashApp are building upon actually is instant finality, unlike Visa/Paypal. This is why comparing bitcoin to Visa or PayPal is fundamentally flawed, since those are both layer 2/3 networks on top of SWIFT. The proper comparison is with other settlement networks that create finality, like SWIFT. Where SWIFT may take days to create final settlement of a transfer, bitcoin takes ~1 hour depending on how much confidence you want. Where SWIFT is secured by nation state monopolies on violence and global banking gatekeeping, bitcoin is secured by the most powerful computer network on the planet that no single nation state has the power to disrupt. Bitcoin is open and permissionless and anyone and everyone can join. SWIFT is tightly permissioned because it relies heavily on exclusive networks of humans who trust each other.
  - pgwhalen 5y ago
    At a high level this comment is correct, but SWIFT is not a settlement network. A message on the network does not actually represent the movement of money between accounts.
- smolder 5y ago
  Bitcoin only gives you a pseudonym wallet ID. I'd say it's less anonymous than cash, since everyone has the ledger.
- Gigachad 5y ago
  I'm not convinced bitcoin solves _any_ problems at all. It isn't anonymous at all, exchanges are the gatekeepers of the whole system and they have to comply with local laws. Canada was found to be directing exchanges to not allow cashing out of certain coins and putting the coins through a mixer just automatically blacklists them from being cashed out. Bitcoin does not provide sufficient privacy which allows exchanges to freeze tainted coins and authorities to track down real identities.
TedDoesntTalk 5y ago
> The only model that makes sense for bitcoin is the layer one base chain is a settlement network, with payment networks build on top that aggregate many transactions into one on chain transaction. Think OSI model for networking. Do you think this applies to cyrptocurrencies that has faster confirmations/block generation? Or is only important when there is a lengthy confirmation?
- anonporridge 5y ago
  The only thing that really matters is how much work has been built up on top of the transaction. Shorter block times doesn't change that function at all. In a version of bitcoin with 1 minute block times, the security guarantee of 60 blocks is identical to the current security guarantee of 6 blocks, because it would be exactly the same amount of energy going into mining to create immutability. The amount of work (hashes) represents a real world cost (electricity and mining chips) that can't be undone without massive commitment of these real world resources. This is the foundation of why bitcoin works. So basically, people who say their blockchain with shorter block times is "faster" are either fools who don't understand what's going on or conmen trying to pump and dump their bags. Layer one transaction confirmation is about settlement finality, not how fast you can pay for coffee.
  - schoen 5y ago
    I think the faster block times help with conceivably making it possible to use 1 confirmation instead of 0 confirmations for in-person transactions, as opposed to than 60 instead of 6. That tilts the odds of winning in a double-spend fraud attempt in favor of the merchant quite a bit, compared to 0 confirmations, although I don't know how to model by how much. (You could empirically estimate by how much by looking at abandoned chain history in a real network, though.)
  - bavell 5y ago
    Great answer. This is related in my mind to the framing of crypto "pointlessly wasting" electricity - it's actually a fundamental part of securing the network by making it prohibitively expensive to reverse or modify mined blocks. I'm open to alternatives to PoW but so far it's been the most successful tool to solve this problem.