It's a very dangerous situation because the security of zero-conf transactions can change overnight simply by some fraction of the hashing power implementing that exact change.
Therefore, we are adapting ourselves (and letting others adapt) to a false reality by designing systems with an assumption that there is some security in zero-conf transactions. I'd much rather just write it off completely, and let businesses and users adapt to the idea that zero-conf transactions are basically useless for exchanges between untrusted parties. Forget it. If you don't trust the person, don't mess with zero-confirmation transactions. Period.
Those are very good points.
Full disclosure: I'm considering writing that patch and collecting that $500 reward myself.
Such patch would not be that useful if it's not used by most relays and at least a few generators. But it's a start anyway.
Have you even thought through the implications of this? An "undo" button would train the users into thinking that:
1) Bitcoin transactions can be reversed for a few minutes after they send the transaction.
2) The reversal is guaranteed.
#1 isn't true at all, since any manner of variables can come into play that could ultimately make the undo button useless almost immediately. How would you explain to people that the undo button might work for anywhere between seconds and hours?
It's sort of like GMail undo when you click Send. You have a few moments to change your mind, but once the mail is gone, you can't bring it back.
An eventual undo button should be disabled as soon as a confirmation is seen.
As for #2, if a merchant is making a great deal of profit off the transaction, they could secretly pay certain miners to choose the original transaction over the undo transaction.
Good point. Warnings would be welcome.
Not at all, and you have the invention of ASICs to thank for that. Mining now requires a large up-front investment that would be completely useless if Bitcoin were to collapse
Come on, you must admit that some double-spent of 0-conf transactions would never make Bitcoin collapse, that's an exaggeration. Particularly if people understand that a 0-conf tx can be easily undone.