Hacker News Reader

Hacker News

Comment by BrokenPipe | Hacker News Reader

Full thread

BrokenPipe

Hello:)

Author of the BIP draft for the Instant Confirmation Payment Protocol aka BIP70 extension and founder of GreenAddress.

You can find the draft here https://github.com/greenaddress/bips/blob/bip-payment-reques...

Bitcoin dev mailing list discussion http://comments.gmane.org/gmane.comp.bitcoin.devel/5628

Reddit discussion http://www.reddit.com/r/Bitcoin/comments/284me8/instant_conf...

The aim of this extension is to reduce risk by allowing, via a third party, instant confirmation of bitcoin transactions.

Questions, comments and in general any feedback is very welcome!

Cheers! Lawrence

View on HN

It seems that much of the "bitcoin is great because it is feeless" stuff is going to get eaten up by the services/fraud reduction layer put on top of it, by stuff like this. Right now, including miner fees, it seems like the transaction cost of bitcoin is actually as high, if not higher, than most credit cards.

How do you see the fees finalizing? Will there still be a significant cost reduction for in person transactions once the industry has matured a bit more? (equivalent of CC transactions in terms of ease of use).

Either way, this is a cool idea, best of luck to you.

Some of those things are worth paying for. The revolutionary thing about Bitcoin (from a financial systems perspective) is that those things are optional. If I don't want or need instant confirms, I don't have to use them.

Another important thing to note is that you're likely a member of a very privileged class, by virtue of being on HN. You likely have a bank account and a credit card. Not everyone is so lucky, and Bitcoin serves many of the same needs you fulfill with the traditional financial system.

Then you have remittance. Imagine you are a Somali immigrant living in Michigan, and you'd like to send money to your brother in Xamar. How do you do that? It's legal, but to my knowledge no US Bank operates in the region. Bitcoin world's as easily to your brother as it does to anyone else.

Bitcoin users are an even more privileged class of the already privileged population. They have regular access to a private computer, and robust internet access. That is not the case for most people in the world.

Do you think the banking industry will support the unbanked faster than a stable and accessible internet will reach them?

> Do you think the banking industry will support the unbanked faster than a stable and accessible internet will reach them?

I would guess so. It's unlikely that big, stable telco companies get created without banks.

Edit: and also, BrokenPipe, I'd really like to hear your thoughts on my original question since you are the author here...

I got distracted, sorry

I think fees will get cheaper as times goes by and the bitcoin network and market matures but it is very hard to say right now with the current transaction size limitations.

Bitcoin is still in early development and very niche, so far the incentives have been working well enough but once the block rewards halves is yet to be seen if fees will be competitive enough and whether the price for them will go up. We also have to hope that the block size and the network capacity can grow fast enough to support its own weight.

In general I think that as more players come in the industry the fees of exchanges, atms, debit cards etc will decrease.

I wish some core developer could also contribute to answer your question and provide more insight than i can offer.

Makes sense, thanks for sharing your thoughts.

If the wild success of M-Pesa is any indication, then the traditional finance industry will reach the next billion consumers well before an obscure technology like Bitcoin will.

Given that M-PESA is run by a telephone company, is it the traditional financial industry or not? It can be argued both ways. SafariCom effectively runs a bank, but it is nonetheless primarily a technology company.

So, simultaneously? Look up bitpesa and the SMS based hosted wallets.

Lots of people in developing countries have access to cheap Android smart phones but no computer these days. Fortunately that's all you need to use Bitcoin.

Only with a thin client, defeating the purpose of Bitcoin. The Blockchain is currently over 18 GB, more storage than any cheap phone I've ever seen, and takes days to download.

Even Satoshi said it is likely most people will use lightweight clients. Even the original paper describes how to make a lightweight wallet that don't need the full history.

> Some of those things are worth paying for. The revolutionary thing about Bitcoin (from a financial systems perspective) is that those things are optional. If I don't want or need instant confirms, I don't have to use them.

Sorry, I think you missed the point of my question. For the use case I'm talking about, which is PoS, I don't see how those things are optional at all.

I wouldn't consider pos a very good usecase for bitcoin in general.

Credit cards are specifically designed for a consumer environment, and even if bitcoin continues towards the moon, I don't predict physical paper currency is going anywhere anytime soon.

Being able to buy a burrito with internet money is pretty cool, but I think of bitcoin as more of a useful network of human trust/power, than a consumerism enabler.

PS: Get a Bitcoin https://blockchain.info/charts/market-price?daysAverageStrin...

Last night, at the city-that-shall-not-be-named Bitcoin meetup, we specifically discussed this sort of BIP, and I raised the opinion which was initially posted in response to Gavin's support for BIP70, which is that the last thing Bitcoin needs is more complexity.

Fundamentally, Bitcoin is trying to be a settlement network and an asset and a UI and a platform for developing future financial services and now a half-baked business-oriented transaction layer on top of the settlement network. Unix philosophy[1] says this is insane, and as someone involved with one of the largest exchanges, I'm inclined to agree.

Most of this stuff boils down to using Bitcoin to try to solve things it's not well-suited to solving, eg. instant payment.

I mean .. adding X.509 & SSL[2] to Bitcoin clients to 'simplify' payments? Really? Do you guys have any idea what that does to an implementation's risk model?

[1] http://en.wikipedia.org/wiki/Unix_philosophy [2] https://github.com/bitcoin/bips/blob/master/bip-0070.mediawi...

To answer to your question, I think your points have already been raised and while I may even share them BIP70 is by default using SSL and X.509 and it seems natural to use it for extensions too.

Other than that, instant confirmation is also done via our own API (which is via wss, ssl) and there is no reason as to why it couldn't be done with ECDSA instead, issue as usual is key management.

You think arbitrage&liquidity between exchanges via instant confirmation is not well suited for exchanges?

You think arbitrage&liquidity between exchanges via instant confirmation is not well suited for exchanges?

With all due respect, correct me if I'm wrong but I don't believe you run a major exchange. There are loads of factors that need to be considered including legal, fraud, security, timezones, multi-hop settlement times (transactions that involve crossing assets) for which we are perhaps one hop and which rely on speed and precalculable latencies, etc. Basically, if anything at all to do with running and exchange seems 'obvious', you probably don't have the whole picture.

Furthermore, most of these issues are better solved in a manner that is not asset-specific or intimately connected to an asset-specific settlement network, ie. we really don't want Bitcoin to provide its own, half-assed solution for what is not a Bitcoin-specific problem.

Reply on news.ycombinator.com