6 ms·

There are some real concerns with Bitcoin. For example, I was going to write an app that accepts Bitcoins as payment. However, the problem is that the amount

• niggler 14y ago
  Sounds like an opportunity for a "bitcoin credit card" or "bitcoin charge card" where a trusted third party maintains complete control.
  • waterlesscloud 14y ago
    Perhaps YC could fund such a startup.
    • niggler 14y ago
      Coinbase doesn't fit that bill, if that's what you are pointing to.
      • waterlesscloud 14y ago
        Coinbase is a bitcoin payment processor. It addresses exactly those issues.
        • niggler 14y ago
          Original issue: "However, the problem is that the amount of time it takes for a transaction to become "verified," i.e. be part of the official block chain, can take up to 10 minutes." https://coinbase.com/merchants https://coinbase.com/merchants : "Confirmed in 1 hour" Underlying issue not addressed
          • waterlesscloud 14y ago
            "Arrives instantly" Which is faster than any credit card gives money to a merchant. As is a one hour final confirmation.
            • patmcc 14y ago
              Credit card companies do confirmation in seconds - the fact that the actual money isn't moved for a month isn't as important as the fact that it will show up, with high certainty.
              • waterlesscloud 14y ago
                I think there's some confusion here over what 'confirmation' means in this context. What Coinbase (and other bitcoin payment processors) offer is instant confirmation that the customer has the funds available and that the payment is allocated to you. This is all a credit card is 'confirming' for you in seconds as well. It's the same thing. "Payment is available and is coming your way". What's different is that Coinbase is saying that within an hour, the funds are 'confirmed' as yours. They are available to you in your wallet. You can do with them as you will. You literally have money in the bank. Now, converting those funds to USD and having them show up in your bank account takes a few days, but that's the legacy banking system that's at fault there. If you want to spend the Bitcoins at Bitcoins, however, you have only to wait an hour. The difference between waiting a month for your money and waiting an hour is absolutely tremendous. The fact that our business ecosystem has evolved to work with the delay doesn't mean that removing the delay is not desirable. Removing that economic friction is revolutionary. It can facilitate new business models and accelerate the pace of commerce. That's the real importance of Bitcoin, or of whatever cryptocurrencies follow on after it. They reduce friction and increase economic velocity.
    • chollida1 14y ago
      The original problem: > However, the problem is that the amount of time it takes for a transaction to become "verified," i.e. be part of the official block chain, can take up to 10 minutes. coinbase is pretty cool but fails completely at solving the posted problem. The soonest I've seen payments settle is in about an hour.
  • dragontamer 14y ago
    These already exist. The problem is that all the advantages of Bitcoin is now lost, and you have transferred control of Bitcoin to the Bitcoin bank. For example: you can gather Flexcoins, which allow instantaneous transfers and so forth. But by doing so, you no longer have Bitcoins. You only have Flexcoins, and if the Flexcoin bank goes under... you lose all of your bitcoins. IE: Using Flexcoins (or any other form of Bitcoin bank) completely defeats the purpose of Bitcoin.
    • niggler 14y ago
      "you have transferred control of Bitcoin to the Bitcoin bank." This exists now with charge cards. You load up a card, and you bear risk that the company could go under. "IE: Using Flexcoins (or any other form of Bitcoin bank) completely defeats the purpose of Bitcoin." I'm not talking about an alternative coin. I'm talking about something akin to what happens now with CHIPS and FedWire, where the dollars are shuffled at a later date but the transactions are approved before it happens.
    • baddox 14y ago
      > The problem is that all the advantages of Bitcoin is now lost, and you have transferred control of Bitcoin to the Bitcoin bank. That isn't a loss of the advantages of bitcoin, because you got to choose which organization to trust, if any. With government currencies, you don't get to choose.
      • dragontamer 14y ago
        What is preventing me from converting my USD into Euros or Yen? I can choose whichever Government / Central bank fits me the best.
        • baddox 14y ago
          Sure, but you can also choose bitcoin, which has no government or central bank, if that fits you best.
        • rishimoko 14y ago
  • jacoblyles 14y ago
    More people should implement and accept Green Addresses[1], and that would largely solve the issue. [1]https://en.bitcoin.it/wiki/Green_address https://en.bitcoin.it/wiki/Green_address
    • benwoody 14y ago
      I'm really rooting for Coinbase to take off. I hope they implement this, as well as a better iOS app.
• aneth4 14y ago
  I'm guessing there is no solution to this problem. BitCoin will clearly fail.
  • MacsHeadroom 14y ago
    Green addresses allow instant confirmation. There is also verified escrow. This problem was solved long ago. Anyone can keep spending money in a "Green Address" which is guaranteed by the eWallet provider. There are no problems without solutions. We have an over abundance of solutions just begging for problems. This is the age of abundance.
    • jodrellblank 14y ago
      We have an over abundance of solutions just begging for problems. "In startup we have great of capability for churn out solution. Please send problem, we are pay good money." - https://twitter.com/DEVOPS_BORAT/status/315549020326088704 https://twitter.com/DEVOPS_BORAT/status/315549020326088704
• dllthomas 14y ago
  Leaving aside bitcoin for a moment, payment shouldn't be synchronous anyway, if you can avoid it - you're relying on external systems.
  • jes5199 14y ago
    Huh? Cash is synchronous.
    • dllthomas 14y ago
      Yes, cash is synchronous. But, 1) Bitcoin isn't cash, and 2) you're not paying in-app with cash. Any time you need to rely on external systems (which is always the case, with electronic payment), as much of that reliance as feasible should be made asynchronous.
• tocomment 14y ago
  Isn't there a way to pay a higher txn fee and get it processed faster? Or could you run a dedicated miner to only process your own txns (or does mining not work that way?)
  • xur17 14y ago
    If I understand it correctly: The higher txn fee ups the chances of your txn being in the next block (it's up to the miner that wins the block which txns are included - some set a minimum fee). Once your txn is placed in a block, it is included in the future blocks too. A confirmation is generated by each block your txn is in, and a block is generated every ten minutes, so for 6 confirmations, you still need an hour. Running a dedicated miner wouldn't help since you'd have to be the one to win the next block to be able to process your txns.
  • cuu508 14y ago
    A block is generated on average every 10 minutes. Higher txn fee makes sure your transaction gets into the block, but there is still wait time. Running dedicated miner is not practical, as you would need huge mining power to mine a block faster than in 10 minutes.
• benwoody 14y ago
  Some services use Green Address for this issue. https://en.bitcoin.it/wiki/Green_address https://en.bitcoin.it/wiki/Green_address
• vbuterin 14y ago
  > However, the problem is that the amount of time it takes for a transaction to become "verified," i.e. be part of the official block chain, can take up to 10 minutes. You actually can accept transactions instantly just fine; the term "confirmation" is slightly misleading here. Try actually paying for some web service or product with Bitcoin - they all confirm the payment instantly. Sure, there is now a very slight possibility of fraud instead of a negligible one, but given that nearly all businesses still do this it's clearly not a problem.
• icebraining 14y ago
  What are you charging for? For many stuff, it's perfectly fine to assume the payment is valid and then just lock the user out if it actually failed. If they're buying something that you can't away, there are other alternatives, like buying "credits" that one can then use to pay for stuff.
• WhoIsSatoshi 14y ago
  How do you think credit card work? They approve blindly but might later reverse the transaction. You might want to setup a holding period for big transactions, and otherwise setup a system that incurs an expected loss/scam: Visa takes 2-5% of transactions and expects irrecoverable loss in that buffer - a Bitcoin seller still could undercut that with expected petty theft. e.g. under $100 transaction: no waiting. $100-$500: 10 min wait. $500+ 20 to 30 min wait.
  • deleted 14y ago
    [deleted]
  • drusenko 14y ago
    That's not how the credit card system works. The merchant first makes an "Authorization" which is a promise by the credit card company to pay the merchant that amount of money within the next 90 days. When they make that promise, they check the customer's account to verify that there are enough funds and then deduct that amount from the available funds. Assuming everything else goes as expected, the merchant then issues a "Capture" which finalizes the transaction, and they receive the funds once settled (within 24 hours). If the CC # details were stolen or the customers otherwise feels that it was a fraudulent transaction, they can call up the bank who will do what's called a "chargeback" and take the money back from the merchant plus a $25 "fuck you" fee. Fraud rates are expected to be less than 1%, if they get higher than that you get in trouble as a merchant. But the thing that's absolutely not happening is blind shipping of goods or delivery of electronic goods with a guess that the customer will probably pay, even below any amount.
    • erikpukinskis 14y ago
      So, basically what you're saying is: Bitcoin: * funds transfer: instant * fraud vulnerability window: 1 hour * fraud exposure: reversal of transaction Credit card: * funds transfer: 24 hours * fraud vulnerability window: 60 days * fraud exposure: reversal of transaction + $25
      • taligent 14y ago
• eric_bullington 14y ago
  The way I see things shaping up is that Bitcoin will be used as a virtual store of value, used to transfer money to one or more other virtual currencies that place a higher premium on transaction speed. Ripple.com could fill this role, or it may be another virtual currency that has yet to be invented. It is incredibly easy to transfer money from Bitcoin to Ripple (and vice versa) once you know how, and any other virtual currency would doubtless share this characteristic. As the Bitcoin "market cap" grows, it will become much less volatile, but will likely continue to increase in value. Actual Bitcoin transactions on the block chain would only be used to refill the other currency for day-to-day transactions, or for large transactions that don't have to be instant, like buying a car or a house. Disclaimer: I own Bitcoins.
• jeffasinger 14y ago
  As soon as your bitcoin node receives the signed transaction (should be seconds), approve the transaction, but listen for other spends of those same coins. After a few seconds, the cost of double spending those coins would be basically the same as the reward for mining a block, so it's unlikely that someone would defraud you for something worth less than ~$2,000. There's almost nothing you could be selling online that couldn't be reversed within an hour or so of the sale in the relatively rare cases of fraud, with the possibly exception of wire transfers of cash.
  • deepblueocean 14y ago
    This is just wrong - see the Hal Finney attack. Basically, an attacker can pre-mine a block with the double-spent coin in it but not announce it. Once an attacker spends the coin and gets something of value, they can immediately announce their block, pay the coin to themselves instead, and keep the goods. It's true that it would be hard to get a lot of value this way, but it's still the case that the person accepting the payment must be wary of the possibility and, as you say, be able to reverse the transaction if the coin ends up double-spent.
• slapresta 14y ago
  > However, the problem is that the amount of time it takes for a transaction to become "verified," i.e. be part of the official block chain, can take up to 10 minutes. It actually can take a lot more than 10 minutes. For all you know, it could take forever. 10 minutes is the average. > What am I supposed to present to the user during this time? Am I supposed to tell them that their payment may or may not have been accepted, please check back in ten minutes or wait for an email? That person is paying you with Bitcoins. They already have an idea of what a network confirmation is. Tell them you're waiting for N network confirmations. Send them an email when the transaction is verified by your node, and a second email when the transaction has enough network confirmations. > How would you handle this if it were a real person in a real store, at a register checking out? It depends on what you're doing. If it were a Starbucks, for example, I would serve the coffee right away, without waiting for blockchain verification. It's unlikely that someone who has more than 50% of the Bitcoin network is using that massive power to double-spend on a Chai Tea Latte. If I needed more confirmation, I could send the transaction to some trusted miner nodes, and see if there's consensus. If those nodes say they will include the transaction in their next mined block, then I can close the deal without waiting for the blockchain to verify it. Of course, this can be done automatically.
• aminok 14y ago
  Bitcoin transactions are instant. Satoshidice, a major bitcoin business, accepts zero-confirmation transactions.