Please, reply to this:
Are you (all) saying that WE cannot have a decentralized system THAT confirms my transactions in 12-18 seconds instead of 1hour.
Interesting...
Why is that?
Why is 10 minutes such a magical timeframe?
Why 10, and not 5 or 20?
The reason for the 10 minute time-frame is to decrease the possibility of miners solving the same block at the same time, potentially creating orphaned blocks. Currently, the average of the network is set to be 10min, however, you CAN get lucky, and solve the block in 1 minute. This IS happening. If the "time-frame" is too small, it means the window is too small, increasing the chances of orphaned blocks occurring.
Litecoin is 2.5min. This is a gamble, because miners who solve orphaned blocks don't get paid a fee. The risk of mining is thus greater. It's a trade-off.
Also. To add:
Unconfirmed transactions are nearly instant. If you are in a restaurant and you are paying someone (with say the wallet app), to pull off a double-spend is nearly impossible. This guy who is standing there is paying a small amount for meal. He then has to somehow have a mining pool at the ready (with enough hashing power) to quickly come in, and hopefully force a double-spend on a $20 meal. The incentive for the mining pool to do this is just so unfeasible, it's just extremely unlikely it will happen.
For low-value transactions, 0 or 1 confirmation is usually enough. In retail, a person is standing in front of you. For them to coordinate a double-spend is nigh impossible.
Ok, this is the kind of response I was looking for, reasoning about design and its consequences... And replying to the post before this. I would be stupid to start to code something or even to purpose a new design BEFORE arguing with others more experienced in Bitcoin its possible pitfalls.
For a computer system 10 minutes is an awful lot of time, even 2 seconds is an awful lot of time. Computers lives in milliseconds, nanoseconds...
If the problem of that "instant transactions block chain" is just that mining would not be worth it, then we could just remove mining prizes altogether on that block chain. The incentive on that chain will only be transaction fees, the prices of "instant security" and for mining you have the parent traditional block chain that will work just as it does now.
As for the last part "Unconfirmed transactions are nearly instant./to pull off a double-spend is nearly impossible" doesn't change the fact that the restaurant or any merchant or receiver will probably prefer to have confirmation before letting the costumer go. The system should aim to provide that confirmation.
Another question, what is wrong with ripple consensus? (for "instant" transactions)
And, have you considered the scalability problems on 10 minute block transactions if bitcoin ever reaches VISA traffic?
Sooner than later bitcoin-qt will be made obsolete, at least trying to keep the block chain locally on a PC.
TODAY is ALREADY not feasible to have it on your mobile phone, you need to trust someone else service.
2000tps*512bytes= 0.97 megabytes per second (from here
https://en.bitcoin.it/wiki/Scalability)
In 10 minutes that means that the block will be 0.5GByte, in an hour that means 3.5GB (more or less)... if your wallet was of for 24h then it has to download 84GB for each day offline!
You need a new HD every week! (with todays technology)
These are real problems to take into account.
(They can probably be fixed more or less easily, but first we need to accept we have them.)