Quote from: Brangdon on February 17, 2014, 08:30:14 PM

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We will not see blockchain transactions at the point of sale on any kind of scale (e.g. large stores and supermarkets) where there is a high turnover of sales.

If they can take cash, and have an internet connection, they can take bitcoin. Bitcoin has many advantages over cash for the retailer and the customer. It has some caveats, but those can be managed. Loyalty cards and retail accounts will be layered on top of that, for those that find them convenient.

It depends. I don't think there will be a single solution for all merchants in all situations all the time.

Some merchants can probably just accept 0-confirm txs (solving the mutability issue should be a priority). For an entity like starbucks if they "listen" for double spends the risk should be lower than credit cards. Lets say starbucks pay 1.5% average for CC, and losing another 1% due to CC fraud. If Bitcoin offers a cost & loss rate of less than 2.5% the company improves their bottom line. There is no significant economic incentive to try and defraud starbucks given the costs and complexities that the fraud will involve. Bitcoins doesn't have to be perfect, it just has to be better. Vending machines, fastfood, parking meters, move theaters are not going to be high value targets for hackers.

For high value transactions, transactions will need confirmations. For some types of in person sales this is a non-issue. An example would be buying a car or boat. It is going to take you a couple hours to do all the paperwork anyways. Plus you have to hand over all kinds of personal documents for title and registration purposes. Any retail shop which does delivery fits in well with Bitcoin. If you go to Home Depot and buy a washer and dryer most of the time it is shipped from the warehouse to your home. For this type of transaction retail is no different than internet mail order.

Some transactions will already require the merchant to verify your identity anyways. For example say redbox took Bitcoins. How do they ensure you return the movie (unless you are willing to put a deposit of the value of the movie in Bitcoins)? They do so because when you created an account and signed up they verified your information and you agreed to have your CC charged if you fail to return the movie. Redbox could take 0-confirm tx tomorrow with no additional risk. Why? if you double spend they just charge your CC. If your CC was fake/stolen why do the double spend to begin with. Their risk profile isn't worsened by taking 0-confirm txs.

The most complicated category would be moderately sized, low margin transactions, in a time sensitive physical retail environment. The archetypical example is a grocery store. With transactions possibly exceeding $300 the fraud risk becomes material. 0-confirm probably can't be relied upon. This will require some off the blockchain solutions. One would be to use an off block-chain payment processor but another would be to simply get a backup payment method. You register a credit card with the store when they enable bitcoin payments. If you double spend then they charge your credit card plus say a 1% penalty. In return if you pay with bitcoins the store saves ~1.5% so they give you a 1% discount off the total and they still save 0.5% off the top. A win-win. I could see a small grocery chain in a tech friendly area doing something along those lines. Maybe you have an option of providing a voided check (for ACH authorization) instead of debit card at the time of the authorization. While Bitcoin is small it may need to co-exist with traditional payment options and this is one way to do so.

Wow D&T that was a giant wall of text. Yeah more than I originally intended but the broader view is there is no one "solution to rule them all". Each merchant (or processor) will need to tailor their acceptance to the risk profile of their business.