Hacker News Reader

Comment by chatmasta | Hacker News Reader

This is one of the better "non-technical" explanations I've seen. I especially like his summary of the costs of Bitcoin: unique wallet identifiers impede anonymity, and blockchain verification delays transactions by ten minutes.

Has anyone thought of making a service to eliminate the ten minute delay? You would operate as a sort of Bitcoin credit agency, temporarily lending funds to credible buyers. You could market this on the merchant side (receive money instantly) or the purchaser side (send money instantly). Take a transaction fee to cover the risk.

View on HN

In reality, it takes more than a few seconds to charge a credit card.

Behind the scenes, the process of settling a credit card transaction after committing to it can take days. This is known as clearing.

Accepting a credit card after a few seconds is more like accepting a Bitcoin transaction as soon as you see it on the network (a 0-confirmation transaction), which is what some merchants do.

Not exactly. Credit card authorization happens instantaneously, even though it takes the money a while longer to actually move between accounts. And this is separare from the chargeback mechanism, which can claw the money back after it's actually moved.

A 0-confirmation bitcoin transaction is more like writing down someone's credit card number and charging it later when you have access to your credit card terminal, which was common (in the form of those carbon copy credit card impressioning machines, which are why credit cards have raised digits) in the days before ubiquitous mobile Internet.

If you accept a 0-confirmation transaction and listen the network for a few seconds to ensure no double-spending transactions are broadcast, this is a reasonably secure way to accept those small transactions where 10-minute delay between blocks (resulting in a 5-minute average wait) would be a problem. Of course, you'd still better wait for 6 confirmations if selling a car.

Hmm, yes perhaps after verifying a buyer's credibility, you could issue him a card with a number on it and a magnetic strip. He could then use this card to draw upon his purchasing credit. I'm not sure what to call this system, though...

I'm not sure of the reason for this sarcasm. A credit card exists for regular currency, but making one for Bitcoin specifically to eliminate the 10 minute delay represents an entirely different undertaking than lending cash to buyers that currently do not have the cash.

You can issue a bitcoin scrip that doesn't have verification delays, but doesn't have the no-trust & public auditability property of bitcoin. To mitigate the no trust problem, you can take the scrip from a voting pool of server-providers so one guy cant run away with your bitcoin with his online wallet.

This is what open transactions & ripple aim to address partly:

http://opentransactions.org/ https://ripple.com/

Reply on news.ycombinator.com