Kenya May Be Primed For Wide-Scale Bitcoin Adoption
thegenesisblock.com
thegenesisblock.com
Right now, you can walk into a convenience store, buy a pack of gum, pay with your credit card, and the transaction clears within ten seconds or so.
From what I understand, a bitcoin transaction isn't set in stone (that is, the money could be double-spent) until it's placed in a block that someone mines - and to prevent problems with people mining the same block twice, multiple blocks. Since one block is mined every ten minutes, we're talking significant time to process a transaction.
There are ways around this - but IIRC they involve an intermediary that both sides trust. That intermediary is unlikely to work for free, so it looks like there would still be a problem.
It's possible that I'm misunderstanding something, or that someone has come up with a clever solution to this problem since I last checked - in which case, I'd like to know what the answer is.
However, the cost of doing so (in processing power) is high enough that it's not worth doing for small amounts. So long as amounts over $100 wait for confirmation you should be fine.
My understanding of Bitcoin implementations is pretty vague, though, so I'd welcome correction if this isn't actually how it works.
For example, our service[1] clears transactions in seconds.
[1]: https://yumcoin.com
The credit card transaction can't be double spent after 180 days (or however long the chargeback period lasts).
Bitcoin can't be double spent after your transaction is seen by the majority of mining nodes (ca. 10 seconds). Then, after a few blocks are mined (~30minutes) bitcoin offers unparalleled security.
TL;DR: When comparing credit card transactions' vs bitcoin transactions' hardness, use similar metrics for confirmation.
Chargebacks are not quite the same. There's an investigation and so on. I can't repeatedly take my credit card out, buy $2000 cameras, and claim I didn't. Bitcoin doesn't have that safety measure.
The only other feasible way to double spend a merchant would be to scour the topology and find a client that has low latency to the merchant you are trying to defraud, but much higher latency to any significant hashing power. Unless they have their node configured to accept incoming connections, which is not recommended for merchant nodes, the attack is very difficult to pull off and requires a significant element of luck to work.
There are also companies like BitPay that will absorb the risk of a double spend in addition to handling your payment logistics, for a fee less than the typical credit card fee.
I really wish Western speculators whose position in BTC vastly exceeds their financial knowledge wouldn't shill their position by recommending people in developing countries risk their money
Bitcoin removes the vulnerability if it takes the corruptible human out of the process.
Now, some people will say that money velocity fluctuates freely so this doesn't do anything about price uncertainty, but that's a rather high bar to meet in the first place.
All transactions are public, but addresses are pseudonymous.
I'm curious how you might do this? Basically you must be able to hide the fact that you own an address, correct? Does that mean using different addresses for handling transactions while updating the block chain from different IPs (in different physical locations, just so your phone or simple general geographic pattern doesn't reveal you)? Is there something I might be missing?
Another problem you hint at is broadcasting a transaction from certain IPs. A common heuristic is to record the IP of the first node to report a transaction as the node that made the transaction. You would have to modify your client so that is not the case, or use some sort of VPN to connect to the network.
The payee would just check the balance of the associated public key before the transaction and immediately transfer the balance after the transaction.
If you want to know how to achieve this, look to modern money laundering practices.
That would make the protocol useless for day to day transactions like buying groceries, but at least as anonymous as cash for more sensitive transactions.
Exchanging private keys is fraught with peril- the originator doesn't lose knowledge of what the key was when they give it to you. The only way to make it work safely is to immediately transfer funds out of the key you just received (to ensure the originator doesn't pull the funds before you can use them), and then we are back to having a trail. As far as someone following that trail is concerned, it is just an extra "hop"- the money still flowed from IllegalVendorA to <unknown> to You.
You can certainly try to obfuscate things, but the point is all the data is there and always will be, and even if it seems like a human wouldn't be able to figure it out, computers are very good at working through graphs!