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From: Eric Lombrozo <elombrozo@gmail.com>
In-Reply-To: <CADJgMztdPEQP+J0wc06i=abvu-2ewBqps1-Vfr9UKMtpbv0BCA@mail.gmail.com>
Date: Sun, 21 Jun 2015 01:51:51 -0700
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To: Btc Drak <btcdrak@gmail.com>
Cc: Bitcoin Dev <bitcoin-development@lists.sourceforge.net>,
	Justus Ranvier <justusranvier@riseup.net>
Subject: Re: [Bitcoin-development] F2Pool has enabled full replace-by-fee
Precedence: list


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> On Jun 21, 2015, at 1:41 AM, Btc Drak <btcdrak@gmail.com> wrote:
>=20
> Eric,
>=20
> BitPay clearly do understand the risks of 0-conf. In case you were not =
aware BitPay does not particularly "accept zero confirm transactions". =
When a payment is seen on the network the payment screen reports the =
invoice has been paid, but that's front-end user facing. On the back end =
it's marked as paid but the API exposes the the confirmation status =
allowing the merchant to make business decisions about when to progress =
to fulfilment. A good example of this is Neteller (a sort of paypal =
variant) which allows one to fund the account with fiat using Bitcoin, =
via Bitpay. When you pay the bitpay invoice, your account is marked as =
payment pending until there are some confirmations.
>=20

I am glad to hear that. Yes, it absolutely makes sense to let the =
merchant to make business decisions still pending confirmation (i.e. =
should I actually ship?)

> Coinbase does not expose the confirmation status and from what I =
understand (not checked myself) they guarantee payment to merchants for =
0-confirm, regardless of whether they confirm or not.

Then Coinbase is essentially taking on the role of an insurer=E2=80=A6are =
they taking the appropriate precautions to limit potential losses? Can =
they make up for these losses with fees? And if not (or if they don=E2=80=99=
t really have a quantifiable risk model) could they survive a worst-case =
scenario with at most a surface wound? (i.e. a systemic attack involving =
many machines in many different places all attacking at once).

It would be absolutely the height of idiocy to guarantee payment on =
merchandise that has yet to ship, i.e. So I hope these reports are wrong =
:)


- Eric Lombrozo

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