Topic: A simple bitcoin Q/A. Learn new and interesting stuff about bitcoin. - page 11. (Read 27314 times)

Indeed today we all are connected on this forum is also due to the Satoshi firstly and then very obvious Theymos  as well. Let me tell you what I was couple of year back did not not matter much to people as they mostly ignored or dint meant anything me in their life. Though felt really bad but I always knew one thing that hard time passes by and need to wait for the opportunity and grab it when it comes.  Bitcoin was that opportunity when I was introduced to it by my friends and from their things have definitely become much better personally and also around me and it has definitely changed the lives of millions of people across the world and made them self depended too now. This would have not being possible unless we had Satoshi to create something like this and then by Theymos to bring all under this forum. So yes my life changed for better and for my family and credit goes to founder of Bitcoin.

Question: We ya'll have been on this forum for quite some time all thanks to Satoshi or whatever his real name is. Most of us even earn on this forum, some people even abuse it but we never thank anybody for it. If Satoshi ever returns to this forum or rather reveals himself IRL, what will you do to make the world a better place? How will you thank him? People say bitcoin is shit and is useless but it did reach 20,000$ and a lot of people became millionaires and billionaires because of it and yet there's no token of appreciation. So elaborate on how you're going to thank Satoshi. Even theymos has played a big part, so he deserves a hell a lot of appreciation. Bring it in.

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This is not a question where you are going to learn about bitcoin, but I felt bad on people being such assholes and cunts. Learn to thank people for what they are and how they are trying to make this world a better place to live in every single day.

Question #9:
A bitcoin transaction with 6 confirmations is usually considered to be secure. Why is it so?
_______________________________________________________________
Satoshi's paper outlines the number of confirmations necessary to be 99.9% sure (less than 1 in 1000 chance of success) that an attacker couldn't build a longer chain to reverse the transaction.
 1-if the attacker’s hashrate is 10% of the total network hashrate (0.1 on
the horizontal axis), 2 confirmations are required to keep the success rate below 10%, 4
confirmations are needed to have it less than 1%, and 6 confirmations are necessary to
decrease the probability of success below 0.1.
2-There is nothing special about the default, often-cited figure of 6 confirmations. It was
chosen based on the assumption that an attacker is unlikely to amass more than 10%
of the hashrate, and that a negligible risk of less than 0.1% is acceptable. Both these
figures are arbitrary, however; 6 confirmations are overkill for casual attackers, and at
the same time powerless against more dedicated attackers with much more than 10%
hashrate.
3-If the attacker controls more hashrate than the honest network, no amount of confirmations
will reduce the success rate below 100%.

Sorry to step in and i can not edit the quotes because im on mobile and it is kinda hard and take a long time.

I guess i just want to add a drawback because people already add a lot.
1. You will lose more money from paying taxes of your worker who doesnt want to be paid with bitcoin. Lets calculate it.
Lets pretend 1btc=1usd, when you make a big sell, your amount will be taxed if you exchange it to fiat, and lets say you will be taxed at 20%. So,
-Fiat workers case :
You got 1000 btc deal, and when you change it to 1000 usd it will be taxed 20% and you make 800. If you have 20 workers with 10usd fees, you will pay them 200 for total and leave you 600usd.
-BTC workers case
You got 1000 btc deal, you pay them 200btc for 20 workers, leave you 800btc, but when you change it to fiat you will be taxed 20% but it will leave you 640usd.
See my point? If you pay your worker with fiat, then you pay their taxes, but it will not matter if you have a worker who wants to be paid with btc.
Lets try if the price is 1btc=10000usd, tax 20%, and workers fee is 2000 a month, 20 workers, you got 1000btc deal
-fiat workers case
You got 10.000.000 usd when exchange it to fiat, taxed 20% you got 8.000.000 usd and minus total workers fee at 40.000 so you got 7.960.000 usd
-Btc worker case
You got 1000 btc, and paid workers fee at 4 btc (40.000usd) will leave you with 996 btc, when you change it to fiat you got 9.960.000, and you pay tax for 20%and will leave you with 7.968.000 usd
Correct me if im wrong, im open to a discussion

Please evaluate my answer too.. i would love have any feedback...

A bitcoin transaction with 6 confirmations is usually considered to be secure. Why is it so?


For more details.

My government decide to forbid bitcoin as transaction because bitcoin still consider as criminal money.
Our public enemy are the corruptor and my government afraid that they begin to use bitcoin to cover their transaction.

For another reason, bitcoin is the currency based on dollar and my currency are weak against dollar.
Let say if BTC1 = $ 50.000 , our currency become nothing and it's cause inflation ! And when it's happen , everything will be expensive !

Different country have their different excuse so that's mine !

Question #9:
A bitcoin transaction with 6 confirmations is usually considered to be secure. Why is it so?

Answer:

Long story short. This is to prevent the action of double spending. The probability of having a double spending with 1 confirmation is much higher than 6, thus making the transaction with a normal or lesser fee will be overwritten and making it invalid with the same transaction but with a much higher fee (usually higher transaction fee goes first).

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Let say i made 2 competing transaction 1 with lower fee and 1 with a higher fee. Im sending 1 transaction to some random person with a lower fee and the other is mine with a much higher fee.

If there is only 1 confirmation mine would get through first in the network rather than the other transaction (because i have much higher fee than the other transaction).
After i get to spend the inputs on the transaction i receive thus making the other transaction invalid (making it double spend).

With 6 confirmation any miner or client can see that there is a double spend making both transaction invalid.

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This is my understanding why 6 confirmation is needed or usually considered to be a secure transaction.

No, this is purely a hypothetical with the aims of people doing more research, and maybe figuring out why their favorite retailer doesn't accept BTC, and of course learning.

Edit: I've given some posts related to this question a few merits, will still offer more if you mention something not already mentioned

I think except fee of transactions one of the most drawbacks of accepting Bitcoin are Legality.
Before you want accept BTC for your business
How about Legality of bitcoin in Canada? I am not a Canadian and I just study about Cryptocurrency. I am finding some information at https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory#North_America:

Bitcoin would seem to be classified pursuant to the current provisions of the PPSA simply as an "intangible".[25]
Bitcoin is expected to be regulated under anti-money laundering and counter-terrorist financing laws in Canada, based on a federal budget bill (C-31), passed in 2014.[26] Regulations must be enacted before this provision becomes active,[27][28] however, once they are it is expected that "dealers in digital currency" will be regulated as money services businesses.[29] The Authorite des Marches Financiers, the regulator in the province of Quebec, has declared that some bitcoin related business models including exchanges and ATMs are regulated under its current MSB Act.[30]

Maybe some one tell me exactly the answel for this question

Now that I'm thinking about it, there are so many more drawbacks of running a large store that accepts Bitcoin... You've got my brain working in overtime now, and all these thoughts keep popping into my head lol. Automation, being one of them. You'd have to hire developers to make an automated payment and fulfillment system, such as the ones that are used by existing fiat payment processors. This comes with a high-cost, as you'd have to have a custom build, or use existing companies like BitPay or Blockonomics. Custom builds will cost thousands of dollars to develop, and you have to put a lot of trust in the dev not to backdoor your code. Using bitcoin payment processors, in turn, means that there are, in fact, fees for your bitcoin payment transactions.

All of this talk can't be for no good reason. DarkStar_, do you run an online retailer that accepts Bitcoin, or are you thinking of starting one? I'm quite interested lol

The benefits and drawbacks of accepting bitcoin for the business are:

*
It is convenient because you can buy online without hassle through paying bitcoin and it is a fast process since you only need to send bitcoin from your btc address to another btc address and there you have it. The problem that could possibly occur though is the confirmation speed and its transaction fees. Since bitcoin has become more popular nowadays many people now are getting involved with it meaning the number of transactions being created are increasing also and it can result to a delay of your incoming or outgoing bitcoin and increase in transaction fees because of overloaded unconfirmed transactions.

*
Because of its volatility, if you sold an item in bitcoin then how much you receive will be its equivalent value at the time you receive it and you cannot change the fact that once you received your bitcoin income, you might gain or lose some of its amount depending on its price movement. For example you are able to sold such goods or services for 100$(in bitcoin) but when you receive it you might actually get more or less than 100$ because bitcoin's price has moved again.

*
I just remembered what I read recently if I am correct in Canada when you convert your bitcoin into Canadian dollar then it becomes subjected to tax. Barter transaction rule is applied when bitcoin is used to purchase goods or services and for tax purpose, the fair market value of the goods or services sold are included as income and I understood in this part is that regardless of the price swings the income that you will declare is based on the fair market value of that goods and services sold by your large business.

But the good part of all is that bitcoin is legally accepted in Canada unlike other countries that banned it.

Please feel free to correct if there are some mistakes on my opinion especially on the last part. Thanks!

Since Bitcoin is not a legal tender "not supported by any government or central authority" that mean you must pay Income Tax Act.
This means that if you want to start a big activity like selling physical  items you must be included your income for tax purposes"Because you didn’t use the legal currency".
You must report any gains or losses when assessing taxes.

benefits
Global market:You can sell to all parts of the world and you can win big markets that can’t pay by conventional methods such as the visa and MasterCard "African and Asian markets".
Low fees:Anyone around the world can pay for you less fees than $ 10 "Cheap product"
drawbacks
taxes and more taxes: income tax and bitcoin tax "bitcoin as commodity"
Legal Legislation: It can be changed at any time.
Bitcoin fluctuation:
Rigidity by CRA.

Considering that you're an online business, cash generally isn't a payment option for your customers. Paying via credit card means that there are fees: for both you and the buyer. While these fees are usually offset for the buyer via bonuses, such as points or airline miles, you, as the seller, are stuck with having to pay merchant fees for allowing credit card payments. Accepting bitcoin means that you, as a seller, do not have to pay fees for the transaction. Chances are that the transaction fees are [currently] lower than the credit card fees for the buyer, as well. Customers can also rest assured knowing that their personal information, such as their billing information that is tied to their credit card, is not divulged to your company. This should allow the customer to buy your products with ease, knowing that their privacy is never at risk.

Additionally, you no longer have to wait to have the cash on-hand. Once a bitcoin transaction successfully receives confirmation, it's yours to spend immediately; no more having to wait for your credit card agency to transfer the money to your bank, especially when there are international fiat currency exchanges involved.

More importantly for you, as a business, you're not susceptible to chargebacks, such as with credit card payments! Once a transaction has occurred, it's final. Customers can no longer fraudulently chargeback a transaction for any reason.

Given that there is a small minority of retailers that accept Bitcoin, yours will be considered one of the "forward thinkers" of this day and age. As a large business, you'll definitely gain positive press for accepting Bitcoin, which will be free press and marketing for simply deciding to accept Bitcoin.

Additionally, given that Bitcoin is considered a commodity by the Canadian government and the Canada Revenue Agency, you don't have to pay taxes on your Bitcoin earnings, unless the value of Bitcoin is higher when you're ready to convert it to fiat currency than it was when you acquired it. If so, then you'll have to pay capital gains taxes on it, which is the perfect segue into the drawbacks of accepting Bitcoin for your business:

Bitcoin is still highly unknown to the Canadian government. Because of its past ties to illegal activities, your Bitcoin could be at risk if the authorities deem any form of investigation into how you acquired the bitcoin. Because you'll be forced to comply, your bitcoin could be in limbo while investigations are conducted. All the government needs is one (false) report that your company is using Bitcoin to launder money or for trafficking, and you'll be forced to give up your bitcoin while they (attempt to) clear any false claims.

This is a farfetched scenario, but the risk is definitely there. Another risk of accepting Bitcoin? The extreme volatility of the currency. Because it's not tied to any fiat currency, and given that all of the products that your store will offer are based on a cash value, you could end up taking a loss for any given transaction if the price of Bitcoin dips after the transaction was conducted. This could be a matter of minutes or a matter of weeks. Because there is no guarantee that the price of bitcoin will increase, every transaction you conduct is at risk of realizing instant losses the moment you sell a product. On the contrary, your profits could be easily multiplied if the price of Bitcoin inflates after a sale has been made.

As a large business, you'll also be susceptible to hacking, and you'd be a target for hackers to try and intercept your customers' payments. Because bitcoin users are also more tech-savvy, it attracts the bad along with the good. Your store's website could be prone to attacks, which could come with hackers' demands for you to pay a ransom (ironically more than likely with Bitcoin) in order to resume your site's normalcy.

There are additionally many perks and drawbacks to the customer for using Bitcoin to purchase products, but since you asked about benefits and drawbacks of your business, I'll leave it at that. Does this answer your question?

Question #9:
A bitcoin transaction with 6 confirmations is usually considered to be secure. Why is it so?

Q : With 6 confirmation, you're safe from double spending ! With 6 confirmation, you're safe to do transaction for more than $ 10.000 although you must wait about 1 hour in process !



Benefit :

• With bitcoin, I can purchase anythings without worried being robbed ( example : carrying money )
• Bitcoin also provide cheaper fee and you also have double advantage ( investment & income)
• With bitcoin, we can do transaction without converting into certain currency because every country accept bitcoin ( Absolutely No fee for conversion )

Drawbacks :

• Bitcoin still volatile so when you're accept bitcoin , you're investing into risky investment except you sold it directly as soon as you got paid with bitcoin
• After you run your business , suddenly your government decide to forbid bitcoin usage because security reason. Bitcoin still consider as criminal money.
• Bitcoin still can be hacked although they said bitcoin using SHA 512

You picked the wrong thread to copy and paste in. Here's an archived version of your post.

Copied from a Quora response: https://www.quora.com/Why-do-you-need-to-wait-for-6-confirmations-for-bitcoins

I was just about to give you a few merits too! 对不起.

Okay. Here's my question:

Question 9.5: Pretend I own a large business that sells physical items, with all orders being sold online. Tell me about the benefits and drawbacks of accepting Bitcoin for my business. I reside in and pay taxes in Canada.

I'll offer up to 20 merits depending on how well your answer is, especially if you make a point that I haven't thought of. I expect more than the obvious benefits and drawbacks, posts with just those will not get merited (by me anyway). Same rules listed by pugman apply.

You got it, ask away. I give you my blessing to take over the thread in any capacity you deem necessary. You are educating better than I could pull off and I'm ready to let someone else take over the merit situation, because I am at 0 for now.

Pugman is an easy going fellow, doubt they'd have any problem with you doing the same. I don't wanna speak for someone else, though.

Miners want to make a larger profit, so it just took time for someone to come up with something like this. I think the answer to the question would still be six, as the probability has significantly lowered since the last time it happened. The bitcoin network had a empty mempool when this happened, so sacrificing probably 10-100 dollars per block might have been worth the chance of a larger payout. Today, miners would be throwing away 3000+ dollars roughly per block they SPV mine from fees. The network had also undergone a soft fork with new rules, and not everyone would have been on the latest Bitcoin Core that enforced these rules. I don't expect to see another BIP66 in the near future. I think it's fair to assume that they are safe, but it is never a guarantee.

You are correct in that the chain could have been over 6 blocks, but I believe only around 50% of the network was SPV mining, so the more time passes, the higher the chance that the other 50% would have found a valid block.

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pugman/bill gator, mind if I asked a question? I'll reward the merits my self, and you don't have to add it to the OP, I just don't want to make a new thread

That's probably because SPV mining seems to have very little utility in the Bitcoin protocol. Unless I am misunderstanding it, SPV mining sacrificed security for speed. This is constantly an argument within the crypto world, but I think Bitcoin's stance on security from the beginning should be respected. We can't be mining blocks without validating what they're doing. This is just encouraging splits, orphan chains and a less stable network.


I fail to see why SPV mining became a thing in the first place, that is to say that I don't believe it should have ever been an issue; I guess hind-sight is 20/20. So then the answer to the question would be "Unknown", is that right? Wouldn't it have been possible for these invalid blocks to have garnered more than the 6 confirmations they did? I guess I'm wondering if there would ever be a "safe" amount of confirmations, because the blockchain is constantly under attack by those searching for anyway to exploit it or manipulate it.