Topic: Ok, but seriously how will I pay for my $250 grocery bill with bitcoin? - page 2. (Read 3023 times)

We could call them aeroplanes for all I care; they're useful and don't negate any advantage of Bitcoin for anyone who don't want to use them. In fact they could facilitate more private transactions since they're not expressed on a public ledger, while allowing Bitcoin to scale.

We could call them ... banks.

Yes, for all the reasons you state. But I think there could be a network of interoperable "another PayPals" with legal relationships between eachother, each performing off-chain transactions for users of any operator in this network, and periodically settling between each other on the blockchain. Each user would sign up for service on their operator of choice, and keep a relatively small spending balance. There would be a standard protocol for payments and settlements that anyone could implement, and merchants wouldn't have to support any particular operator such as CoinBase.

This would be for harmless, non-controversial, everyday humdrum use-cases like buying groceries or cups of coffee. People can yell all they want about this violating the sacred intention of the blockchain as a public ledger, but in fact every cup of coffee ever consumed does not need representation on the blockchain. The blockchain is still there for anyone who is unable or unwilling to use the off-chain network (think controversial or illegal transactions, long-term or high-volume storage, privacy).

How do they accept the risk of double spending with cash? There is no such risk.

The idea is to make bitcoin payments equally reliable/irreversible, for the payees, as the cash payments are.
If they get to "accept the risk", they can just as well put the bill on you tab and let you pay it from your desktop after you get home.

What about merchants just accepting the risk? They do that now with cash, check and credit cards. People print and use counterfeit money everyday, people write bad checks and use stolen credit cards. The thing is not everyone does this. The few bad transactions that will happen are just part of the risk of having a business. Granted eliminating that risk would be great but how much effort is it worth?

There is of course the option to lower the block interval, perhaps using Litecoin's code, or developing a different solution to minimise orphaned blocks. I don't like that idea much, there seem to be hard limits to the range of improvement.

Perhaps the POS could accept payment only from devices that sign transactions via RFID (the putative Sigsafe, for example). This would require more sophisticated/expensive attempts at double spend attacks, and so the economic sweet spot for such a trade-off could move into a range where the value of the transaction is worth waiting for 1 confirm anyway.

Another would be to use an ID protocol as a part of the purchase. You shouldn't necessarily be forced to give personal details, just allow the shop to verify and record an ID token that you carry the key for on your mobile phone. The staff verifies the ownership and checks the amount you paid/sacrificed for the ID, then decides whether that's good enough surety for the circumstances and permits a zero-conf.

If only there was some way to establish a network of transaction-risk management companies to assist in cases like these...

Well , that post is an awesome idea , requiring lesser trust.

Inputs.io was one of the systems that required complete trust.

You send your coins to Inputs.io , and they write down a balance for you. You can send your coins to other users of that service for low or negligible fees , as the Bitcoins are not really transacted but just the inputs.io records are changed.

You would be charged only when you withdraw , which covers the fees for transferring your inputs.io funds to an external wallet.

I have to say though , inputs.io worked remarkably well , even though it was centralized. Sadly though , it got hacked (or some say it was a man-in-the-middle attack) and the Bitcoin community is not likely to trust something similar again.

I think the "another Paypal" solution is exactly what you want here.

The only difference is that this paypal would also provide anonymity and non-reversibility of transactions.
You could create an account there without providing any personal data, possibly even from behind Tor.
The service doesn't care who you are because it does not need such knowledge. It is there to provide instant payments using the coins you first deposited there.

And this approach could also address the transaction volume size.
Because the service does provide insurance for non-confirmed bitcoins transactions, but bitcoin trasnactions will eventually become expensive so the merchants will have an incentive to get single bills paid not through the chain, but "internally". And only withdraw it like once a day.

Of course a decentralized solution for off-chain transaction would be much better, but it is also a much harder problem to solve, so IMHO centralized solutions that focus on anonymity will come out first as more popular (just like centralized black markets or centralized mining pools have).
There is no reason why a service like Bitcoin Fog couldn't be turned into a payment processor - they already have good privacy protection infrastructure and only need to start supporting internal transfers between accounts.

Of course the governments will not like it and their minions will quickly attack the idea all over, using all kind fo cheap propaganda, but who cares about these dicks anyway.

It may not be bitcoin that makes it safe, but reality.

If you try to double spend at a supermarket, that would probably be your last visit there since they now know your face, there's CCTV etc.

Maybe Im mistaken.... I'll have a look at these. Any other info on the topic, I dont want to derail this thread...

I suggest you spend some time playing with my replace-by-fee tools, especially the doublespend.py script. Double-spending zeroconf transactions is really easy.

In the short term the solution is probably you register your CC with the grocery store and then they let you pay w/ Bitcoins zero confirm.  If you pull a double spend then just charge your CC the amount plus a penalty.   It would be no more risky than accepting CC directly and saves the store the CC fee on most transactions.

As a merchant you should feel safe accepting a transaction the moment you are able to see it on the network. The amount of hashpower a user would need to control in order to double spend is going to cost WAY more than the $5 coffee you are trying to buy. And even if they did somehow control that much power (hacking a pool or similar) they will probably go after a much larger transaction to make it worth their time and in that case, for a large transaction, I would be willing to wait 10-30min for a few confirmed blocks. Buying a house, for example, isnt a process that can be done in 3sec or less anyway. So once you send the Bitcoin and fill out all the paperwork and do the inspection, the whatever.... you will have plenty of confirms saying the coin is in your wallet.

I really think people are too wrapped around the "6 confirms" thing.

i dont think any p2p-blockchain can handle the volume if many people use it for buying groceries.

so i see huge value in secure (less then blockchain itself but still secure) offchain transactions.

edit: to clarify: only trustless one which only requires trust in my card (or key or whatever). not a second inputs.io

I don't think off-blockchain is the answer. This completely undermines and defeats the purpose of the block chain being an open ledger. You might as well be another Paypal. The reasons invoked for off-block chain transactions are that the merchants’ volume is too high for the block chain, that the fees are too high or that confirmation time is too long. For every single of those problems there are known solutions that aren’t detrimental to the block chain ecosystem.

I'm not familiar enough with off-chain transactions, or the inputs.io debacle,  but starting to look at it (I'm a bit late to the party I know). Found an old post http://gavintech.blogspot.com/2012/07/off-chain-transactions.html from Gavin Andresen (possibly pre-dating inputs.io) about it, so reviewing now.

Anyway, not sure if off-chain is really the answer but we need some way for more instantaneous transactions. Multi-sig may have the answer there somewhere.

i like the othercoin idea.
basically it allows offchain spending of bitcoins

edit:
https://bitcointalksearch.org/topic/off-chain-anonymous-transactions-by-secure-transfer-of-private-keys-321085
https://bitcointalksearch.org/topic/project-othercoin-off-chain-payment-system-using-tamperproof-chips-319146

On-chain solutions like greenaddress.it's 2-of-2 signing allow 0-conf transactions, provided the merchant trusts ga.it not to double-spend.

There used to be this concept of green addresses. And now with multisig you can even have a similar service without the risk for the coin owner to get robbed by the green address provider, though at the expense of bigger transactions and thus higher fees.

But in general, you should know that bitcoin has not been designed to support fast payments.
People who think that Bitcoin can do such things have been deluded.

Bitcoin is much faster than most of the irreversible payment methods known before (e.g. bank wires), but it has never been meant for instant payments.
Although it provides a solid base for a possible instant payment services that would be developed over the bitcoin protocol.
I general, what you need for instant payments is some kind of a central authority, an insurer which the parties accepting payments would trust.