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Date: Tue, 7 May 2013 11:00:52 +0200
Message-ID: <CANEZrP2TTcBJX86T+aRULDb7h9=MmoQa5U4cW0Z5ka8QAe_6Jg@mail.gmail.com>
From: Mike Hearn <mike@plan99.net>
To: Peter Todd <pete@petertodd.org>
Content-Type: text/plain; charset=UTF-8
Cc: Bitcoin Dev <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] Discovery/addr packets (was: Service bits
 for pruned nodes)
Precedence: list

> You mean scam you with a zero-conf transaction that hasn't actually been
> broadcast?

Yeah. Or just scam you at all. It's hard to imagine an organisation as
a big as a mobile carrier engaging in financial scamming (roaming fees
excepted).

I've said this before, but I think it's worth repeating. The
double-spend protection the block chain gives you has a sweet spot
where it's really, really valuable (essential even) and then there are
lots of kinds of transactions on either side of that sweet spot that
don't really benefit from it.

Obvious/trivial case where you don't need a block chain - Facebook
buys Instagram for a gajillion coins. The legal system is plenty good
enough to ensure the payments are honoured. Another example, when my
employer pays me my salary. They aren't going to double spend this
except through some horrible accident that we can get sorted out some
other way.

Another case, very small payments. This is Satoshi's bag of crisps
example. If the cost/complexity of double spending is higher than what
the payment is worth, again, you don't really need the block chain.
That's why it's worth optimising unconfirmed transactions to be harder
to double spend, it optimises (pushes up) that lower bar.

Place where you really want the chain - largeish sums of money are
moving around, but not large enough to justify expensive
cross-jurisdictional legal action, or where the cost of identity
verification and all the associated paperwork is just too high. I
guess most online transactions fall into this bucket today.