Comment by cschneid | Hacker News Reader

Comment by cschneid | Hacker News Reader

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It's about trust. The transaction hits the network immediately. Then a miner puts it in a block as soon as right away, or as slow as... several days (if you put a transaction fee, you'll move to the frontish of the line). Once its in one block, every subsequent block is a vote for its authenticity.

So, if I accept a bitcoin right away, I open myself up to a fairly trivial double-spend attack. If I wait for one confirmation, it's harder, but still sorta maybe doable. If I wait for several (1-2hours), it's near impossible.

Compare with taking cash which may be phony, or a CC which is easily charge-backable, and the business's risk is ... close enough to the same.

Not really. The transaction arriving over the Bitcoin network, which takes around 10 seconds, is the first pass of authenticity testing - it won't work unless the account has the money and the sender has the rights to that account and the nodes forwarding the transaction haven't seen any other spends of that coin since the last block. At that point, doing a double-spend reliably is already hard enough that anyone who can do it probably has much better things to do with the ability than try to skim $20 worth of drinks at a bar.

One confirmation, that is, being included in one block, takes anywhere from a few seconds to 15 minutes, probably averaging 5-7 minutes. With that, it's already virtually impossible to double-spend without having enough mining power to take 51% of the current mining network. That's a bit more hashing power than the entire current mining network combined. That'll earn you hundreds of thousands of dollars a day just doing honest mining, and potential double-spend activity well into the tens of millions or more. Again, why bother with that to rip off a $20 bar tab? Or even a $2,000 bar tab?

If you wait for one confirmation, it's possible that the attacker may find (or have found) a block by chance before anyone else does.

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