I am a little bothered by the way some bitcoin folks have perverted the original statement that really came from Ronald Reagan, which was "trust but verify." The current bitcoin maximalist statement that is circulating around, including coming frequently out of the mouth of Max Hillerand is "don't trust verify," which to me says something quite different from the "original": "trust but verify."
Either of them work, essentially you can trust that the transaction has been sent but verify it for proof.
Yes. Agreed. If any BTC transaction is relatively small, such as a coffee, and even perhaps decently small retail transactions of less than $50, there might be some confidence to NOT rely upon any confirmation before allowing the transaction to take place without necessarily knowing the BTC sender. On the other hand, a lot of merchants, and I changed my practice in this regard too, wait for at least 1 confirmation if the transaction is hundreds of dollars or more. Of course, if you are transacting with several thousand dollars (maybe $10k or more, depending on risk tolerance), and an unknown person, then waiting for 3 to 6 confirmations would give the greatest assurance before releasing the non-BTC end of the transaction.
In other words, when dealing with strangers, the higher the stake the more incentive for the other person to cheat, but most regular people do not cheat on a regular basis, but some regular people still might end up cheating (and not do the right thing) if they were accidentally left with a windfall situation that causes them to receive a decent amount of possibly untraceable and irreversible value. Some people will not do the right thing, even though they may have never been left in such a power position to test how they would react.
I have one personal Localbitcoins story, in this regard. About a year ago, maybe a little less than a year ago, I had conducted a cash transaction for about half of a bitcoin around $7k. For some reason, I had miscalculated and gave the person $600 more than what was the current price (So in that situation I gave the person $3,800 rather than $3,200 - something like that).
I caught the mistake about 10 minutes after the transaction, and after the person already had left the transaction location with the extra $600 that I had given to him. Neither of us had intended such a situation, he acknowledged the mistake, and after I repeatedly texted him, and even offered to go to his location to retrieve the $600, he did not do the right thing of returning the $600 to me.
He also began to call me names in what seemed to be a kind of rationalization for him to keep the $600. Anyhow, I consider that person to have been a regular person, and even that he had rationalized in his own head that he was correct to keep the extra $600 that I had given to him (windfall), but I still believe (my assumption that people who you meet in person are usually honest) only a minority of people would have kept the $600 in that particular situation... but the real test remains getting into the situation, and test of character about whether you personally do the right thing when given an opportunity to nearly anonymously profit.
