6 ms·

Perhaps you are not aware that actually settling credit card payments, i.e. the time it takes for the money to actually end up in the merchant's bank account ma

by dscrd 13y ago

Perhaps you are not aware that actually settling credit card payments, i.e. the time it takes for the money to actually end up in the merchant's bank account may take several days, even weeks. As for bitcoin, to my knowledge this is pretty much analoguous to "transaction confirmation", which typically happens in 10 minutes. So it's actually much much faster than credit card payments.

wavefunction 13y ago
You just hand-waved away the fact that the trust necessary for an independent retailer to accept an "untrusted" credit-card has been aggregated in Visa and MasterCard and codified through tort law and agreements with the aforementioned credit-card companies. What are you going to do, provide a detailed transaction history to the retailer proving that "your bitcoin transactions always are legit?" Kind of removes the last of the "anonymity" afforded by Bitcoin.
- dcosson 13y ago
  It's normally a matter of seconds until other clients can see a bitcoin transaction that you've posted for the network. The only way that will end up not being legit is if you've double-spent the funds - that won't happen if you're a legit user using a regular client, and for the most part even for a nefarious user it would require significant computing resources (e.g. you've already mined a block spending those coins but won't release it until you walk out of the store). So the idea is that if you're a regular retail store, accepting unconfirmed transactions is fine. Unless a big exploit becomes known, any fraud you might happen to see certianly won't any higher than the credit card chargebacks you're getting now. If you're selling your house, you probably want to wait for a few block confirmations. Not to mention there are other crypto-currencies with significantly faster block clearing times, and cryptocoin to cryptocoin exchanges are significantly easier to run than bitcoin to fiat exchanges. So it really seems like all of this is only a minor inconvenience for bitcoin if anything. And there's certainly no reason to ever have to trust someone because "they've been legit in the past", that's an approximation of trust that previous systems have had to rely on but exactly what bitcoin avoids.
  - wavefunction 13y ago
    You outlined a couple of scenarios where a transaction can be fraudulent, which is more than the 0 acceptable to a small business where margins are razor-thin already. You really expect every mom and pop store to accept Bitcoins when they have to be as technically literate as the posters of HN?
    - etherael 13y ago
      that won't happen if you're a legit user using a regular client, and for the most part even for a nefarious user it would require significant computing resources (e.g. you've already mined a block spending those coins but won't release it until you walk out of the store). Just in case he's not making it clear from the description of what actually doing that would involve, mining a block is a big deal. You're talking about winning the lottery in competition with 35 million other gigahash/sec worth of mining power. If the worst you want to do with that block is defraud a mom and pop store that accepts bitcoin you're positing a scenario something on the order of a multimillion dollar operation in order to undertake such an attempt. If you're going to do that, you're not going to try to defraud the corner store for a snickers bar. Also, if that's genuinely not enough; Not to mention there are other crypto-currencies with significantly faster block clearing times, and cryptocoin to cryptocoin exchanges are significantly easier to run than bitcoin to fiat exchanges. Plenty of 60 second block confirm altcoin chains out there, no reason to use bitcoin if you absolutely insist on some way to address the double spend "problem".
      - jedunnigan 13y ago
        So having a miner in your pocket is certainly one way to execute a double spend. That's a Finney attack.[0] The other and less costly way is all about node connectivity.[1] If you are going to execute a double spend all you 'need' to do is broadcast two txs spending the same output at the same time--one going to the merchant the other spending it back to yourself--and cross your fingers and hope the double spend gets put in a block. Now, you can increase the probability (e.g. shielding the merchant's node from your double spend) of success but it's not a sure bet. And the higher the node connectivity of the network (i.e. how many nodes are each node connected to) the harder this attack becomes. There has been some work in this area, especially in pursuit of the efficacy of double spend attacks in light of some minor changes to the protocol which (I think) were rolled into core with the most release 0.9.0.[2] It's about .09% probability of success. [0]https://en.bitcoin.it/wiki/Weaknesses#The_Finney_attack https://en.bitcoin.it/wiki/Weaknesses#The_Finney_attack [1]http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23... [2]http://www.tik.ee.ethz.ch/file/848064fa2e80f88a57aef43d7d5956c6/P2P2013_093.pdf http://www.tik.ee.ethz.ch/file/848064fa2e80f88a57aef43d7d595...
chockablock 13y ago
>settling credit card payments ... may take several days, even weeks. But there is a trusted 3rd party (the issuing bank) that gives an instant reply as to whether the purchaser's account has enough funds (or credit) to make the purchase, and assumes much of the risk if they are wrong and the purchaser is uncollectible. Maybe they don't need to take 2-5% of each transaction to provide this service, but it does seem like a pure, anonymous bitcoin transaction can not provide this service to a retailer.
- LyndsySimon 13y ago
  There is no need for this service with Bitcoin - the balance controlled by every address in the network is known to everyone.
  - chockablock 13y ago
    I was referring to the fact that credit card companies prevent (or at least take responsibility for) double-spending.
patrickk 13y ago
> "...which typically happens in 10 minutes..." Which is too long when waiting at a counter in a retail scenario. Imagine if every customer had to wait around for 10 minutes to verify the transaction, it would be chaos in a busy retail situation (even 1 minute is way too long), which is the point being raised by the GP comment. The merchant might have to wait weeks to actually receive payment from a credit card company, but at least they know they will eventually get paid, as Visa or whoever is a trusted entity. Bitcoin is 'trustless', so if the customer can leave as soon as they like, the merchant might confirm the transaction in 10 minutes, or they might not get paid at all.
- canvia 13y ago
  Try buying something with bitcoin. The first confirmation is all that is needed and it happens in a matter of seconds. It won't be fully confirmed for ~10 minutes but that is fine for the vast majority of cases.
- throwaway2048 13y ago
  the wont get paid by Visa if there is a chargeback, indeed they will owe some percentage extra as a processing fee.

by dscrd 13y ago

wavefunction 13y ago

You just hand-waved away the fact that the trust necessary for an independent retailer to accept an "untrusted" credit-card has been aggregated in Visa and MasterCard and codified through tort law and agreements with the aforementioned credit-card companies. What are you going to do, provide a detailed transaction history to the retailer proving that "your bitcoin transactions always are legit?" Kind of removes the last of the "anonymity" afforded by Bitcoin.

dcosson 13y ago
It's normally a matter of seconds until other clients can see a bitcoin transaction that you've posted for the network. The only way that will end up not being legit is if you've double-spent the funds - that won't happen if you're a legit user using a regular client, and for the most part even for a nefarious user it would require significant computing resources (e.g. you've already mined a block spending those coins but won't release it until you walk out of the store). So the idea is that if you're a regular retail store, accepting unconfirmed transactions is fine. Unless a big exploit becomes known, any fraud you might happen to see certianly won't any higher than the credit card chargebacks you're getting now. If you're selling your house, you probably want to wait for a few block confirmations. Not to mention there are other crypto-currencies with significantly faster block clearing times, and cryptocoin to cryptocoin exchanges are significantly easier to run than bitcoin to fiat exchanges. So it really seems like all of this is only a minor inconvenience for bitcoin if anything. And there's certainly no reason to ever have to trust someone because "they've been legit in the past", that's an approximation of trust that previous systems have had to rely on but exactly what bitcoin avoids.
- wavefunction 13y ago
  You outlined a couple of scenarios where a transaction can be fraudulent, which is more than the 0 acceptable to a small business where margins are razor-thin already. You really expect every mom and pop store to accept Bitcoins when they have to be as technically literate as the posters of HN?
  - etherael 13y ago
    that won't happen if you're a legit user using a regular client, and for the most part even for a nefarious user it would require significant computing resources (e.g. you've already mined a block spending those coins but won't release it until you walk out of the store). Just in case he's not making it clear from the description of what actually doing that would involve, mining a block is a big deal. You're talking about winning the lottery in competition with 35 million other gigahash/sec worth of mining power. If the worst you want to do with that block is defraud a mom and pop store that accepts bitcoin you're positing a scenario something on the order of a multimillion dollar operation in order to undertake such an attempt. If you're going to do that, you're not going to try to defraud the corner store for a snickers bar. Also, if that's genuinely not enough; Not to mention there are other crypto-currencies with significantly faster block clearing times, and cryptocoin to cryptocoin exchanges are significantly easier to run than bitcoin to fiat exchanges. Plenty of 60 second block confirm altcoin chains out there, no reason to use bitcoin if you absolutely insist on some way to address the double spend "problem".
    - jedunnigan 13y ago
      So having a miner in your pocket is certainly one way to execute a double spend. That's a Finney attack.[0] The other and less costly way is all about node connectivity.[1] If you are going to execute a double spend all you 'need' to do is broadcast two txs spending the same output at the same time--one going to the merchant the other spending it back to yourself--and cross your fingers and hope the double spend gets put in a block. Now, you can increase the probability (e.g. shielding the merchant's node from your double spend) of success but it's not a sure bet. And the higher the node connectivity of the network (i.e. how many nodes are each node connected to) the harder this attack becomes. There has been some work in this area, especially in pursuit of the efficacy of double spend attacks in light of some minor changes to the protocol which (I think) were rolled into core with the most release 0.9.0.[2] It's about .09% probability of success. [0]https://en.bitcoin.it/wiki/Weaknesses#The_Finney_attack https://en.bitcoin.it/wiki/Weaknesses#The_Finney_attack [1]http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23... [2]http://www.tik.ee.ethz.ch/file/848064fa2e80f88a57aef43d7d5956c6/P2P2013_093.pdf http://www.tik.ee.ethz.ch/file/848064fa2e80f88a57aef43d7d595...

chockablock 13y ago

>settling credit card payments ... may take several days, even weeks. But there is a trusted 3rd party (the issuing bank) that gives an instant reply as to whether the purchaser's account has enough funds (or credit) to make the purchase, and assumes much of the risk if they are wrong and the purchaser is uncollectible. Maybe they don't need to take 2-5% of each transaction to provide this service, but it does seem like a pure, anonymous bitcoin transaction can not provide this service to a retailer.

LyndsySimon 13y ago
There is no need for this service with Bitcoin - the balance controlled by every address in the network is known to everyone.
- chockablock 13y ago
  I was referring to the fact that credit card companies prevent (or at least take responsibility for) double-spending.

patrickk 13y ago

> "...which typically happens in 10 minutes..." Which is too long when waiting at a counter in a retail scenario. Imagine if every customer had to wait around for 10 minutes to verify the transaction, it would be chaos in a busy retail situation (even 1 minute is way too long), which is the point being raised by the GP comment. The merchant might have to wait weeks to actually receive payment from a credit card company, but at least they know they will eventually get paid, as Visa or whoever is a trusted entity. Bitcoin is 'trustless', so if the customer can leave as soon as they like, the merchant might confirm the transaction in 10 minutes, or they might not get paid at all.

canvia 13y ago
Try buying something with bitcoin. The first confirmation is all that is needed and it happens in a matter of seconds. It won't be fully confirmed for ~10 minutes but that is fine for the vast majority of cases.
throwaway2048 13y ago
the wont get paid by Visa if there is a chargeback, indeed they will owe some percentage extra as a processing fee.