James A. Donald wrote:
> So what happened to the coin that lost the race?
> 
> ... it is a bit harsh if the guy who came second 
> is likely to lose his coin.

When there are multiple double-spent versions of the same transaction, one and only \
one will become valid.

The receiver of a payment must wait an hour or so before believing that it's valid.  \
The network will resolve any possible double-spend races by then.

The guy who received the double-spend that became invalid never thought he had it in \
the first place.  His software would have shown the transaction go from "unconfirmed" \
to "invalid".  If necessary, the UI can be made to hide transactions until they're \
sufficiently deep in the block chain.


> Further, your description of events implies restrictions
> on timing and coin generation - that the entire network
> generates coins slowly compared to the time required for
> news of a new coin to flood the network

Sorry if I didn't make that clear.  The target time between blocks will probably be \
10 minutes.

Every block includes its creation time.  If the time is off by more than 36 hours, \
other nodes won't work on it.  If the timespan over the last 6*24*30 blocks is less \
than 15 days, blocks are being generated too fast and the proof-of-work difficulty \
doubles.  Everyone does the same calculation with the same chain data, so they all \
get the same result at the same link in the chain.


> We want spenders to have certainty that their
> transaction is valid at the time it takes a spend to
> flood the network, not at the time it takes for branch
> races to be resolved.

Instantant non-repudiability is not a feature, but it's still much faster than \
existing systems.  Paper cheques can bounce up to a week or two later.  Credit card \
transactions can be contested up to 60 to 180 days later.  Bitcoin transactions can \
be sufficiently irreversible in an hour or two.


> If one node is ignoring all spends that it does not 
> care about, it suffers no adverse consequences.

With the transaction fee based incentive system I recently posted, nodes would have \
an incentive to include all the paying transactions they receive.

Satoshi Nakamoto