Topic: The future of bitcoin and transaction confirmation times (Read 1629 times)

some sites take 0 confirmations, but it is slightly risky because of double charges.

It's pretty simple. You have a company, like the credit card company, which screens potential customers in advance and decides to accept a certain risk of double-spending or insufficient funds up to a limit. In exchange, the company receives a small fee from the merchant and reserves the right to bill the customer if there's insufficient funds. Merchants get instant confirmation when user swipes card or provides authentication they have an account. Just like a credit card company, the merchant gets paid whether or not the customer can foot the bill, whether it's 30 days later for a credit card or 10 minutes-a few hours for a bitcoin transaction.

This is highly unlikely.  It has significant potential for becoming A mainstream payment system, but it would require some significant changes to ever be versatile enough to become the single most significant payment system.

At the moment, due to the maximum size the protocol allows a block to be, bitcoin can handle approximately 7 transactions per second.  There is already significant debate about whether this limitation should be changed and how much larger it should be.  Such changes to the protocol require a consensus not only of miners but of all peers.  Given the significant spectrum of ideologies in bitcoin, such a consensus is extremely difficult to accomplish.

It is likely that either there will be multiple independent payment systems, of which bitcoin may be one, or that there will be payment systems that are backed by bitcoin.

I expect Bitcoin to set to stage for better protocols in the near future.

DannyHamilton, I expect it to be THE mainstream payment system i.e., it will replace credit cards. But I don't see how it can happen with this slow confirmation mechanism...

did you include a reasonable tx fee? 1 hour should be the very rare exception if you do include a tx fee. Also bitcoin isnt ment to be used for local trade, its meant to be used over the internet, you really dont think that even if we did have to wait 1 hour for a confirmation that this would be acceptable for long distance trade? When im buying something that takes 3 days to ship im hardly worried about 1 hour.

I agree that is a major drawback if not THE major drawback.  I sent someone some BTC last night and it took about an hour before it even got one confirmation.  That just isn't practical.   So add that to the issue with the price being so volatile and I doubt that Bitcoin will ever get that widespread with its usage.

Are you suggesting that bitcoin can only be considered a success if it completely replaces every payment processor and every currency that exists in the world?

Are you assuming that in the future there will be nothing but bitcion? No other payment systems at all?

Let's assume an average rate of 2000tps, so just VISA. Transactions vary in size from about 0.2 kilobytes to over 1 kilobyte, but it's averaging half a kilobyte today.

That means that you need to keep up with around 8 megabits/second of transaction data (2000tps * 512 bytes) / 1024 bytes in a kilobyte / 1024 kilobytes in a megabyte = 0.97 megabytes per second * 8 = 7.8 megabits/second.

This sort of bandwidth is already common for even residential connections today, and is certainly at the low end of what colocation providers would expect to provide you with.

So if nothing else we could use alternative blockchains when we run out of bandwidth to feed the bitcoin blockchain. If bitcoin could scale up to about the volume of visa than we should only need one or two additional blockchains to facilitate all long distance trade (if that). Remember gold and silver coin will still always be the preferred method for local trade.

That's only Paypal. What about the rest of the credit card industry? Banking industry?

Tens of thousands of transactions per second?  According to this:

https://www.paypal-media.com/mediacenter.cfm


7.6 million per day / 86,400 seconds per day = 88 transactions per second.

I'm not sure that "Tens of thousands" of transactions are necessary.

same question as katie1348

i read about the Bitcoin client, that he's a part of the large P2P network.
does this mean, when a perso (example: my neighbor) starts his client, he downloads the blockchain from my computer, too? 

On a similar note, how useful is it for me to run the Bitcoin client, which will authorize transactions, does it really make that much difference?

Am I really helping, or just wasting my bandwidth?

 

Is it correct to say that the system as it is now is not capable of large scale eCommerce where tens of thousands of transactions need to be processed each second? If that is the case, when will it be ready?

Hope transactions will only get faster, also loading the blockchain with a local wallet all the times and keep it updated when relaunching... There a lot of idle time spent waiting for things to sync

Contrary to popular belief a transaction is pretty damn secure after a single confirmation and more secure than you might realize even before a single confirmation.

Without a miners fee it will take longer to confirm but usually after 6 confirmations your transaction should be done anyway, how long it will take for these to complete it will depend on your transaction fees.

You are mistaken.  In today's eCommerce system, merchants are willing to accept a certain amount of risk to provide you with instant access even though the payment you have made will continue to be reversible (possibly for up to 18 months).



You don't pay to a wallet. You pay to an address.


You will generally be sure that the transaction has been transmitted and seen by the network within a couple of seconds.


It is up to the merchant how much risk they are willing to accept.  Merchants wait 24 to 48 hours with credit cards before "settlement" when the money shows up in their bank account, even though they accept the transaction the moment they receive it.  Beyond settlement, the transaction can be reversed for months.  Bitcoin is much faster than this.  The transaction is seen within seconds. The first confirmation happens on average in about 10 minutes, and within a few hours the merchant can be certain that the transaction won't be reversed.


It really depends on the details.  How big is the transaction, how old are the coins, what is the value of the various outputs? There are several technical solutions to this issue, they simply haven't been implemented by miners and/or merchants yet.  There is no reason to think that they won't be implemented eventually.  A coupe possibilites are:

- Large scale merchants can start up their own mining operations or can contrat with other mining organizations to ensure that their transactions are confirmed as quickly as possible.

- Miners can look at fees on transactions that are built on top of unconfirmed transactions which would allow the recipient of a transaction to add their own fee to improve the odds of getting a confirmation.


None.  The fastest that a confirmation can occur is the next solved block.  The network adjusts difficulty to keep the average time between blocks close to ten minutes.


Certainly not, which is why the grocery store doesn't make you stand around in the line until 3am when they get their settlement from the credit card company.  Instead they are willing to accept a small risk of theft and fraud for an increase in transaction speed and convenience.  They take the cost of that fraud and bury it in the retail cost of the products they sell.  There is no reason they can't do the same with bitcoin.

Hi, I am new here and already did a lot of reading on the bitcoin. One of the main issues I can't understand is why confirmation takes so long (yes, 2-3 minutes is a LONG time, not to mansion 6 confirmations which can take hours). In today's eCommerce system, when I pay for something, confirmation is instant i.e., I click "confirm" and I am done and can continue about my business.
With bitcoin, how does it work? When I pay to a certain wallet, after how long can I be "sure" the payment arrived? How long will I be hanging in the air until the transaction is complete? What if I choose to make the transaction without a miner's fee? What fee will make the confirmation instant?
If I take it a bit further into the future and want to pay for my groceries in the supermarket, I can't hold the line waiting for a confirmation...