Post
Topic
Board Bitcoin Discussion
Re: bitcoin is failing in replacing fiat in physical shops
by
Peter R
on 17/02/2014, 21:38:06 UTC
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.  

Thank you for the thoughtful comments, DeathAndTaxes.

I agree with most of the points you made, but could you clarify why you think $300 grocery purchases may be too high a risk for zero-confirm transactions?  Assuming that malleability is eliminated in the future, how could a customer using a mobile app cheat the grocery store cashier [assuming the grocery store has a well-connected listening node]?  My understanding is that the fraudster would either need to coordinate a Sybil attack, or he would need to pass the fraudulent double-spend over a non-public back-channel to an unethical miner that controls a great deal of global hash power.  

Both these attack methods seem like a lot of work for groceries, neither method is guaranteed to succeed, and the fraudster risks getting caught and charged with a crime.  (Despite what Augusto Croppo says, as bitcoin becomes more mainstream, we will begin to recognize these shenanigans as a crime similar to using counterfeit bills or stolen credit cards).

I imagine that in a "bitcoin future" there will be less zero-confirm fraud using bitcoin [malleability aside] than purchases with counterfeit cash or stolen credit cards.  Do you disagree?