2 ms·

Transactions are instant unless the sender double spends. Wait ten minutes for anonymous senders. Trust known senders, then blacklist their identity for instant

by natrius 12y ago

Transactions are instant unless the sender double spends. Wait ten minutes for anonymous senders. Trust known senders, then blacklist their identity for instant transactions if bad behavior is detected. This is effectively what any merchant who accepts credit cards does today. Credit card transactions look instant, but can be rejected weeks later. If the blockchain is too heavy, why are miners willing to process transactions for tiny fees? Bitcoin creates a competitive market in transaction processing. If the blockchain becomes too heavy (as measured by the transaction fees miners demand), alternatives will arise or the protocol will be changed to stay competitive.

ceallen 12y ago
Individual transaction fees are being heavily, heavily subsidized by block rewards currently. Just eyeballing the current numbers: ~400 transactions per block, 25 btc reward, ~500 usd / btc gives a transaction cost of 31 dollars each. What happens to fees when mining rewards taper off? Just authoritatively stating "it'll be fixed" blindly pushes these problems into the future.
- natrius 12y ago
  It'll be fixed. Or something will outcompete Bitcoin. That's what markets do. Blockchain technology has eliminated the barrier to entry to compete on transaction fees.
- Natanael_L 12y ago
  Transaction count will go up, and nothing says the value given to miners must stay the same. It is fine if some miners leave due to unprofitability.
  - deleted 12y ago
    [deleted]
runeks 12y ago
> Transactions are instant unless the sender double spends. Sure. But if we don't need to worry about double spends, we wouldn't need Bitcoin in the first place. Bitcoin solves the double spend problem, which takes, roughly 60 minutes. > Wait ten minutes for anonymous senders. A single confirmation is not sufficient for large-value transfers. The larger the transfers the longer one should wait (up to about 6 confirmations). A miner with, say, 5% of the global hashing power has a 5% chance of finding the next block. That means someone working with the miner has a 5% chance of successfully pulling off a 1-confirmation double spend. If I transfer 100,000 BTC to someone as payment for something, and the recipient delivers to me a product worth 100,000 BTC after one confirmation, then I have a 5% chance of successfully scamming someone of something worth 100,000 BTC (~$60M). That's an average profit per attempt of 5,000 BTC (~$3M). If I instead wait, say, 7 confirmations (~65 minutes), the probability of pulling of a successful double spend with 5% of the network hash rate is around 0.000000078%. That's an average profit per attempt of $0.05.

by natrius 12y ago

ceallen 12y ago

Individual transaction fees are being heavily, heavily subsidized by block rewards currently. Just eyeballing the current numbers: ~400 transactions per block, 25 btc reward, ~500 usd / btc gives a transaction cost of 31 dollars each. What happens to fees when mining rewards taper off? Just authoritatively stating "it'll be fixed" blindly pushes these problems into the future.

natrius 12y ago
It'll be fixed. Or something will outcompete Bitcoin. That's what markets do. Blockchain technology has eliminated the barrier to entry to compete on transaction fees.
Natanael_L 12y ago
Transaction count will go up, and nothing says the value given to miners must stay the same. It is fine if some miners leave due to unprofitability.
- deleted 12y ago
  [deleted]

runeks 12y ago

> Transactions are instant unless the sender double spends. Sure. But if we don't need to worry about double spends, we wouldn't need Bitcoin in the first place. Bitcoin solves the double spend problem, which takes, roughly 60 minutes. > Wait ten minutes for anonymous senders. A single confirmation is not sufficient for large-value transfers. The larger the transfers the longer one should wait (up to about 6 confirmations). A miner with, say, 5% of the global hashing power has a 5% chance of finding the next block. That means someone working with the miner has a 5% chance of successfully pulling off a 1-confirmation double spend. If I transfer 100,000 BTC to someone as payment for something, and the recipient delivers to me a product worth 100,000 BTC after one confirmation, then I have a 5% chance of successfully scamming someone of something worth 100,000 BTC (~$60M). That's an average profit per attempt of 5,000 BTC (~$3M). If I instead wait, say, 7 confirmations (~65 minutes), the probability of pulling of a successful double spend with 5% of the network hash rate is around 0.000000078%. That's an average profit per attempt of $0.05.