Show HN: Instant confirmation via Bitcoin payment protocol(greenaddress.it)
greenaddress.it
Show HN: Instant confirmation via Bitcoin payment protocol
https://greenaddress.it
7 comments
It seems that much of the "bitcoin is great because it is feeless" stuff is going to get eaten up by the services/fraud reduction layer put on top of it, by stuff like this. Right now, including miner fees, it seems like the transaction cost of bitcoin is actually as high, if not higher, than most credit cards.
How do you see the fees finalizing? Will there still be a significant cost reduction for in person transactions once the industry has matured a bit more? (equivalent of CC transactions in terms of ease of use).
Either way, this is a cool idea, best of luck to you.
How do you see the fees finalizing? Will there still be a significant cost reduction for in person transactions once the industry has matured a bit more? (equivalent of CC transactions in terms of ease of use).
Either way, this is a cool idea, best of luck to you.
Some of those things are worth paying for. The revolutionary thing about Bitcoin (from a financial systems perspective) is that those things are optional. If I don't want or need instant confirms, I don't have to use them.
Another important thing to note is that you're likely a member of a very privileged class, by virtue of being on HN. You likely have a bank account and a credit card. Not everyone is so lucky, and Bitcoin serves many of the same needs you fulfill with the traditional financial system.
Then you have remittance. Imagine you are a Somali immigrant living in Michigan, and you'd like to send money to your brother in Xamar. How do you do that? It's legal, but to my knowledge no US Bank operates in the region. Bitcoin world's as easily to your brother as it does to anyone else.
Another important thing to note is that you're likely a member of a very privileged class, by virtue of being on HN. You likely have a bank account and a credit card. Not everyone is so lucky, and Bitcoin serves many of the same needs you fulfill with the traditional financial system.
Then you have remittance. Imagine you are a Somali immigrant living in Michigan, and you'd like to send money to your brother in Xamar. How do you do that? It's legal, but to my knowledge no US Bank operates in the region. Bitcoin world's as easily to your brother as it does to anyone else.
> Some of those things are worth paying for. The revolutionary thing about Bitcoin (from a financial systems perspective) is that those things are optional. If I don't want or need instant confirms, I don't have to use them.
Sorry, I think you missed the point of my question. For the use case I'm talking about, which is PoS, I don't see how those things are optional at all.
Sorry, I think you missed the point of my question. For the use case I'm talking about, which is PoS, I don't see how those things are optional at all.
I wouldn't consider pos a very good usecase for bitcoin in general.
Credit cards are specifically designed for a consumer environment, and even if bitcoin continues towards the moon, I don't predict physical paper currency is going anywhere anytime soon.
Being able to buy a burrito with internet money is pretty cool, but I think of bitcoin as more of a useful network of human trust/power, than a consumerism enabler.
PS: Get a Bitcoin https://blockchain.info/charts/market-price?daysAverageStrin...
Credit cards are specifically designed for a consumer environment, and even if bitcoin continues towards the moon, I don't predict physical paper currency is going anywhere anytime soon.
Being able to buy a burrito with internet money is pretty cool, but I think of bitcoin as more of a useful network of human trust/power, than a consumerism enabler.
PS: Get a Bitcoin https://blockchain.info/charts/market-price?daysAverageStrin...
Bitcoin users are an even more privileged class of the already privileged population. They have regular access to a private computer, and robust internet access. That is not the case for most people in the world.
Lots of people in developing countries have access to cheap Android smart phones but no computer these days. Fortunately that's all you need to use Bitcoin.
Only with a thin client, defeating the purpose of Bitcoin. The Blockchain is currently over 18 GB, more storage than any cheap phone I've ever seen, and takes days to download.
Even Satoshi said it is likely most people will use lightweight clients. Even the original paper describes how to make a lightweight wallet that don't need the full history.
Do you think the banking industry will support the unbanked faster than a stable and accessible internet will reach them?
> Do you think the banking industry will support the unbanked faster than a stable and accessible internet will reach them?
I would guess so. It's unlikely that big, stable telco companies get created without banks.
Edit: and also, BrokenPipe, I'd really like to hear your thoughts on my original question since you are the author here...
I would guess so. It's unlikely that big, stable telco companies get created without banks.
Edit: and also, BrokenPipe, I'd really like to hear your thoughts on my original question since you are the author here...
I got distracted, sorry
I think fees will get cheaper as times goes by and the bitcoin network and market matures but it is very hard to say right now with the current transaction size limitations.
Bitcoin is still in early development and very niche, so far the incentives have been working well enough but once the block rewards halves is yet to be seen if fees will be competitive enough and whether the price for them will go up. We also have to hope that the block size and the network capacity can grow fast enough to support its own weight.
In general I think that as more players come in the industry the fees of exchanges, atms, debit cards etc will decrease.
I wish some core developer could also contribute to answer your question and provide more insight than i can offer.
I think fees will get cheaper as times goes by and the bitcoin network and market matures but it is very hard to say right now with the current transaction size limitations.
Bitcoin is still in early development and very niche, so far the incentives have been working well enough but once the block rewards halves is yet to be seen if fees will be competitive enough and whether the price for them will go up. We also have to hope that the block size and the network capacity can grow fast enough to support its own weight.
In general I think that as more players come in the industry the fees of exchanges, atms, debit cards etc will decrease.
I wish some core developer could also contribute to answer your question and provide more insight than i can offer.
Makes sense, thanks for sharing your thoughts.
If the wild success of M-Pesa is any indication, then the traditional finance industry will reach the next billion consumers well before an obscure technology like Bitcoin will.
Given that M-PESA is run by a telephone company, is it the traditional financial industry or not? It can be argued both ways. SafariCom effectively runs a bank, but it is nonetheless primarily a technology company.
So, simultaneously? Look up bitpesa and the SMS based hosted wallets.
[deleted]
Last night, at the city-that-shall-not-be-named Bitcoin meetup, we specifically discussed this sort of BIP, and I raised the opinion which was initially posted in response to Gavin's support for BIP70, which is that the last thing Bitcoin needs is more complexity.
Fundamentally, Bitcoin is trying to be a settlement network and an asset and a UI and a platform for developing future financial services and now a half-baked business-oriented transaction layer on top of the settlement network. Unix philosophy[1] says this is insane, and as someone involved with one of the largest exchanges, I'm inclined to agree.
Most of this stuff boils down to using Bitcoin to try to solve things it's not well-suited to solving, eg. instant payment.
I mean .. adding X.509 & SSL[2] to Bitcoin clients to 'simplify' payments? Really? Do you guys have any idea what that does to an implementation's risk model?
[1] http://en.wikipedia.org/wiki/Unix_philosophy [2] https://github.com/bitcoin/bips/blob/master/bip-0070.mediawi...
Fundamentally, Bitcoin is trying to be a settlement network and an asset and a UI and a platform for developing future financial services and now a half-baked business-oriented transaction layer on top of the settlement network. Unix philosophy[1] says this is insane, and as someone involved with one of the largest exchanges, I'm inclined to agree.
Most of this stuff boils down to using Bitcoin to try to solve things it's not well-suited to solving, eg. instant payment.
I mean .. adding X.509 & SSL[2] to Bitcoin clients to 'simplify' payments? Really? Do you guys have any idea what that does to an implementation's risk model?
[1] http://en.wikipedia.org/wiki/Unix_philosophy [2] https://github.com/bitcoin/bips/blob/master/bip-0070.mediawi...
To answer to your question, I think your points have already been raised and while I may even share them BIP70 is by default using SSL and X.509 and it seems natural to use it for extensions too.
Other than that, instant confirmation is also done via our own API (which is via wss, ssl) and there is no reason as to why it couldn't be done with ECDSA instead, issue as usual is key management.
You think arbitrage&liquidity between exchanges via instant confirmation is not well suited for exchanges?
Other than that, instant confirmation is also done via our own API (which is via wss, ssl) and there is no reason as to why it couldn't be done with ECDSA instead, issue as usual is key management.
You think arbitrage&liquidity between exchanges via instant confirmation is not well suited for exchanges?
You think arbitrage&liquidity between exchanges via instant confirmation is not well suited for exchanges?
With all due respect, correct me if I'm wrong but I don't believe you run a major exchange. There are loads of factors that need to be considered including legal, fraud, security, timezones, multi-hop settlement times (transactions that involve crossing assets) for which we are perhaps one hop and which rely on speed and precalculable latencies, etc. Basically, if anything at all to do with running and exchange seems 'obvious', you probably don't have the whole picture.
Furthermore, most of these issues are better solved in a manner that is not asset-specific or intimately connected to an asset-specific settlement network, ie. we really don't want Bitcoin to provide its own, half-assed solution for what is not a Bitcoin-specific problem.
With all due respect, correct me if I'm wrong but I don't believe you run a major exchange. There are loads of factors that need to be considered including legal, fraud, security, timezones, multi-hop settlement times (transactions that involve crossing assets) for which we are perhaps one hop and which rely on speed and precalculable latencies, etc. Basically, if anything at all to do with running and exchange seems 'obvious', you probably don't have the whole picture.
Furthermore, most of these issues are better solved in a manner that is not asset-specific or intimately connected to an asset-specific settlement network, ie. we really don't want Bitcoin to provide its own, half-assed solution for what is not a Bitcoin-specific problem.
Which merchants currently accept your key for instant confirmations?
From the bitcoin wiki:
[green addresses] are generally considered a bad idea and not advisable to implement.
An ATM bitcoin to cash manufacturer is testing the functionality right now and another one is planning to integrate it when they implement the payment protocol.
There's also other users that can check either inside the GreenAddress wallet or at https://greenaddress.it/instant
it's called GreenAddress because when I thought about the concept, end of 2012 beginning of 2013 it wasn't yet associated with the bad reputation or MtGox double spends and I felt anyhow that it could be improved (which I think we did).
The modus operandi of the platform is different from the original GreenAddress concept as the instant confirmation comes out of band and is based on multisignature allowing the system to prevent users double spends.
However, like the original GreenAddress concept, it is based on third party trust, there is no magic bullet.
There's also other users that can check either inside the GreenAddress wallet or at https://greenaddress.it/instant
it's called GreenAddress because when I thought about the concept, end of 2012 beginning of 2013 it wasn't yet associated with the bad reputation or MtGox double spends and I felt anyhow that it could be improved (which I think we did).
The modus operandi of the platform is different from the original GreenAddress concept as the instant confirmation comes out of band and is based on multisignature allowing the system to prevent users double spends.
However, like the original GreenAddress concept, it is based on third party trust, there is no magic bullet.
How could you prevent somebody signing a transaction using your service, waiting until the nLockTime has expired, then creating a transaction that is not signed by you but valid due to the nLockTime expiry? They would then be in a position to double spend because they could use a transaction that is verified by you to buy something instantly (cash from an ATM for example) and redirect the same funds back to their own control using the single signature transaction with a high chance of success.
We only provide instant confirmations for bitcoins we know that are going to get included in a block long before the nlocktime will expire allowing you to spend them.
How long before, because that would make it impossible for people to spend their coins at all during that period, which could be annoying.
Also, does this mean that to verify a transaction can be considered instant, the merchant has to check with your servers and there is no way of verifying this independently? Isn't this a serious privacy problem?
Also, does this mean that to verify a transaction can be considered instant, the merchant has to check with your servers and there is no way of verifying this independently? Isn't this a serious privacy problem?
We don't provide instant confirmation but that does not mean you can't spend your funds without it.
The minimum is 1 day or 144 blocks, default to 90 days, max is max block size.
The minimum is 1 day or 144 blocks, default to 90 days, max is max block size.
Hi Lawrence,
probably that is the right step toward solving the transaction speed,albeit by a slightly more centralized workaround,it reminds me of a comment I made almost a year from now:
https://news.ycombinator.com/item?id=6130813
great job ;)
probably that is the right step toward solving the transaction speed,albeit by a slightly more centralized workaround,it reminds me of a comment I made almost a year from now:
https://news.ycombinator.com/item?id=6130813
great job ;)
cheers!
[deleted]
"...or analysing transaction network propagation."
Haven't we already agreed this is meaningless?
Haven't we already agreed this is meaningless?
I think we did, good point.
It should be removed imho. Especially since the instant confirmation with a monitor couldn't really be synchronous without .. wait for it, waiting.
good catch!
It should be removed imho. Especially since the instant confirmation with a monitor couldn't really be synchronous without .. wait for it, waiting.
good catch!
Yay, easy way to confirm false transactions :D
Not really, the payment protocol gives you back the full transaction that can be checked by the merchant.
The 'instant' comes from trusting a third party that temporarily controls enough keys to block the funds before they can get double spent but long enough that the tx can be confirmed.
The 'instant' comes from trusting a third party that temporarily controls enough keys to block the funds before they can get double spent but long enough that the tx can be confirmed.
I hope to see it soon on my lovely iphone!
For the record I know HostFat does not have an iPhone and he is a friend. I think.
I would be incredibly careful of trusting any new BTC trust protocols this week, with the ongoing 51% threat from GHash.
http://arstechnica.com/security/2014/06/bitcoin-security-gua...
http://arstechnica.com/security/2014/06/bitcoin-security-gua...
reminds me of this comment on reddit
http://www.reddit.com/r/Bitcoin/comments/284me8/instant_conf...
Not to dismiss the 51% issue but that would affect all transactions, this -'instant protocol' is on top of bitcoin, not in replacement of.
http://www.reddit.com/r/Bitcoin/comments/284me8/instant_conf...
Not to dismiss the 51% issue but that would affect all transactions, this -'instant protocol' is on top of bitcoin, not in replacement of.
Ongoing? Their network skate had dropped substantially.
Author of the BIP draft for the Instant Confirmation Payment Protocol aka BIP70 extension and founder of GreenAddress.
You can find the draft here https://github.com/greenaddress/bips/blob/bip-payment-reques...
Bitcoin dev mailing list discussion http://comments.gmane.org/gmane.comp.bitcoin.devel/5628
Reddit discussion http://www.reddit.com/r/Bitcoin/comments/284me8/instant_conf...
The aim of this extension is to reduce risk by allowing, via a third party, instant confirmation of bitcoin transactions.
Questions, comments and in general any feedback is very welcome!
Cheers! Lawrence