Topic: If bitcoin as currency, how the merchant manage the block confirmation? (Read 172 times)

I think lots of people already know and believe that the main chain is like the highly secure channel suitable for high-profile/valuable transactions, and side-chain or another tech like LN will likely be the most usable network for day-to-day transactions.

It is definitely going to take some time before merchants start adopting LN. Hopefully, the tech improves greatly by then. The onboarding and the troubleshooting process definitely need to get better for faster adoption.

There's always a hole, there are some blockchain networks that still some bugs that maybe not yet found. But for Bitcoin, most of the bugs are already fixed during the early years of Bitcoin.
Yep, as what @DannyHamilton and @hatshepsut93, lightning network is one of the best solutions for having problems with scalability, like waiting for confirmation or high transaction fees, if you don't know what a lightning network is, it is a layer 2, a protocol that built on top of Bitcoin network.

Yes, confirmation time is a bit of a problem, but fees is a bigger problem, because instead of just being annoying they make certain transactions just uneconomic. So, Lightning Network is the answer to both problems, and will most likely be used for all small transactions in the next 5-10 years. IMO if Bitcoin on-chain fees will be low enough for small transactions, it will be a sign that Bitcoin is not being used as money, because 7-12 transactions per second is really-really low.

Bitpay used to have a risk management system for their payments and often didn't require any confirmations for their small ticket items. Bitpay simply just needed to verify that the transaction is propagated well enough and had sufficient fees. Fee market was less volatile then as well. ​Note that those were the days when opt-in RBF didn't exist, replacing unconfirmed transactions were far harder than it is now. Attackers mostly had to rely on the participation of the miners or in at least once instance take advantage of differing transaction policy across different mining pools.

Those days are over. Fee market is far more volatile, there isn't any good certainty that a reasonable fee would get you a confirmation, unless you're overpaying it. Opt-in RBF is almost always recommended and people should always use it. Don't use on-chain transactions, that won't be cost effective or efficient enough.

Ultimately, it comes down to trust. The same way handing cash to the cashier does too. Merchants already check certain notes for counterfeiting, but they are well aware that customers will sometimes try to pull the wool over their eyes, or actually be using counterfeit money without them actually knowing it is counterfeit. So, the problems that exist with Bitcoin, largely exist in fiat too. The difference, and the only valid point here is the confirmation time. However, as explained above, and just to expand upon it; It is ultimately up to the discretion of the merchant, whether or not they wait for a confirmation or not. Many don't, because there's a very small chance that anything does go wrong, once the transaction turns up on the Blockchain.

Bitcoin might not be acceptable for fast food chains or takeaways which would require confirmations. However, as suggested above you usually pay your check after the fact you've eaten your meal. Therefore, Bitcoin would be no different, because as long as a adequate fee was used it should be confirmed by the time your done eating.

What I do think could potentially happen; is the fee process will become streamlined, and there will be a merchant determined fee, that you'll need to include to assure that it confirms on time. However, this would likely be done using QR codes or something similar to avoid any issues.

Millions of restaurants serve billions of people every year, giving people their meals (often to the tune of hundreds of dollars) and letting them finish eating, before trusting that they will pay the bill and not scam the restaurant. The majority also accept credit cards, trusting that the customer will not perform a credit card chargeback or reversal, which can often be performed for up to 180 days after the bill has been paid. It is not unreasonable to expect places like KFC to trust that customers will not try a fraudulent double spend for the sake of $5 worth of chicken, and even if they do, a $5 loss is meaningless to them.

By all means, if someone is ordering $500 worth of food then wait for a confirmation first, but for $5 it is rarely necessary (provided RBF is disabled, of course).

There's a good discussion about the security of zero confirmation transactions here: https://bitcoincore.org/en/faq/optin_rbf/#why-arent-unconfirmed-transactions-safe

Answer 1.
If merchant knows who you are, they don't need to wait for confirmation.  They can prosecute you for theft if you fail to pay.

Answer 2.
If the price of the product is low, the merchant does not need to wait for confirmation.  They can take a small risk of you committing fraud with the knowledge that 99.99% of customers will not. Same as taking small risk of counterfeit fiat or of credit card fraud.

Answer 3.
If the customer does not use RBF, the merchant can reduce risk by monitoring the Bitcoin network to make sure that the proper fee is paid and that transaction has propagated well. There is VERY SMALL risk that the transaction will not confirm eventually.

Answer 4.
If the customer leaves a deposit with the merchant ahead of time, then the merchant can subtract the cost of the product from the deposit and/or can return the difference to the customer.

Answer 5.
If the customer leaves a credit card registered with the merchant, then the merchant can use the credit card as a backup in case the bitcoin transaction is fraud.

Answer 6.
Use lightning Network.

Answer 7.
Use centralized services such as Coinbase or BitPay to manage payments. Service takes on risk management.

Answer 8.
Smart merchants, and smart service providers will come up with more and better options. Ingenuity, invention, creativity, and discovery are how progress happens.

if Bitcoin as a currency then where is the center of the money controlled? means that there must be a state, regulation and government that controls the price of Bitcoin.
if bitcoin as a digital asset then it is more appropriate. or maybe digital gold which we often think of has a similar function as a buffer against inflation. because if it is called a currency, it will be very close to the nature of inflation. while gold is the opposite of it all, Bitcoin is leaning more towards digital gold.

Using fintech like Alipay or anything is a different thing because it's centralized and controlled by the bank using a "trust" system even it's a "fake transaction" if you can breach or found a bug in their system, blockchain system solves this problem because it using the trustless system. But the problem of bitcoin in nature is it took time to make the transaction confirmed. Assuming I'm walking to KFC and want to buy one FC using an automated cashier and scan the QR code for bitcoin payment, likely the machine accepts it but you must wait until you got one confirmation and you get the receipt, if you are unlucky you'll wait up to one hour just to get the receipt out of the machine. How will the merchant solve this thing if used as currency which needs fast transaction?