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Are there any arbitrators that would guarantee the bitcoin transaction such that no one has to wait ten minutes to confirm the transfer of the said bitcoins?

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@Dori This is not remotely an exact duplicate. The other question involves in-person transactions, while this question is about the ~10 minute delay in confirming any Bitcoin transactions. See meta.bitcoin.stackexchange.com/questions/45/… –  Michael McGowan Sep 1 '11 at 13:39
    
@Dori While many answers might be valid for both, the questions are not exact. I'm not suggesting this is a good answer to the other question, but conceivably the merchant could require the customer to physically wait in the store while the transaction clears. That would answer the other question while not answering this one. I don't know why SE even bothers to use "exact duplicate" as a close reason because clearly exact duplicate just means "very similar" in the eyes of most that vote to close. –  Michael McGowan Sep 2 '11 at 2:06
    
So at what points in time did this get votes to be closed. Or did you just close it dori? As I recall this had less then 5 views when it was shut down. You closed it as exact duplicate and then changed it to possible duplicate. I bet you don't even have any bitcoins. –  Buckhead_Comp_Ser_Co Sep 2 '11 at 18:26
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user9704: dori is our community moderator, but the great thing is the community can override things like this. No need to make it personal. I voted to re-open as I think the confirmation question is specific and will come up frequently. –  lemonginger Sep 2 '11 at 20:01
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@user9704 - you do know how to edit your username, right? –  ripper234 Sep 3 '11 at 8:27

4 Answers 4

There are no such arbitrators currently, as far as I know. There have been plans discussed to create trusted sources of Bitcoins. The idea would be that I'd hold my Bitcoins with an e-wallet service and ask them to transfer my coins to you. The e-wallet service would confirm (outside the Bitcoin network) that it was going to send you so many coins.

In one plan, the e-wallet service would send you a signed email containing the transaction ID and a copy of the transaction. If a conflicting transaction ever appears in the public block chain, you would have proof that the e-wallet service had cheated you, destroying its reputation.

There is another method that doesn't require the sender to use an e-wallet service. In this method, a verifier connects to as many Bitcoin clients as possible over as much of the network as possible. He monitors the transactions appearing. If he sees a transaction on all points and doesn't see a conflicting transaction anywhere, the only possible double-spend attack would be to conspire with a miner who happens to mine the next block by luck.

For most transactions, just seeing the transaction posted is sufficient. But if you add in making sure the transaction is seen over most of the network, the risk is low enough to be worth taking for all but the highest-value transactions (say $5,000 or more). For transactions higher than that, it's hard to see how a 10 minute delay is a big deal. But if it is, you'll need to develop a method to handle it.

There have also been proposals for "side chains" that generate blocks more quickly and permit transactions to be confirmed faster. However, they're really not suitable for large transactions as they are unlikely to ever see enough hashing power to ensure they're resistant to a 51% attack.

Note that if you are ever ripped off in this way, you can always prove it. If you see the unconfirmed transaction, you can save it. If no conflicting transaction gets in the block chain, you can still post that unconfirmed transaction. If a conflicting transaction does get in, you'll have both transactions. So you can at least name and shame.

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The best way for an eWallet to confirm a transaction is by using its known green address. And, most likely you will be able to do this even without trusting the eWallet with your money, by using multiple-signature transactions. –  Meni Rosenfeld Jan 13 '12 at 11:13

There is no single answer to this question. It involves a risk / convenience tradeoff and depends heavily on the circumstances, i.e. the risks of trusting a payment before some number of actual transaction confirmations are seen in the blockchain, vs the risk of lost opportunities by making things slow or difficult for your customers.

Generally speaking, go ahead if the risks are small in comparison to the benefits of responding quickly. We see the same thing with credit card purchases, which are even revokable. For small transactions, merchants typically choose to keep the checkout line moving rather than asking customers for a signature.

The risks are affected by factors like:

  • What information do you have about the payer - IP address? Email address? Do they have an online account with you? Have you seen payments from the same bitcoin address before? Do you have their physical address, e.g. for shipping? Other behavior patterns?

  • How easy would it be for someone to get away with lots of small transactions? Do you have good ways to limit their access if they keep coming back?

You can ask the same questions from the standpoint of potential arbitrators. In most cases the vendor would be likely to have more information to use in making an informed risk determination than an independent arbitrator would have. But one form of "arbitration" that is getting some attention is the use of a whitelist for bitcoin addresses. See e.g. the Green address technique. Arbitrators could research and maintain various whitelists suitable for different risk scenarios (e.g. payment amounts), access to which they could sell.

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This is not an answer. A simple no would have sufficed if this is your view on bitcoin transactions. –  Buckhead_Comp_Ser_Co Sep 6 '11 at 23:41
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@user9704 I was answering the question in your title. If you only want the narrower question in the body to be answered, then you should change the title, which should be a basic summary of the question. Note that the many people who only read the title on the index page will also get the wrong impression. –  nealmcb Sep 7 '11 at 2:59
    
I would add: TL;DR - For small amounts, there is no serious risk at accepting a transaction with zero confirmations. –  ripper234 Sep 7 '11 at 3:35
    
@ripper234 ... unless someone can get away with a lot of small amounts... And I'd hope a merchant could find the time to read a half page of things to think about when deciding how to handle payments. –  nealmcb Sep 7 '11 at 4:16

Instawallet Green Address is a way to accept bitcoins with zero confirmations and zero risk of double spend attacks. Of course you still have the risk that Intsawallet is compromised in some way.

Also, for a lot of application (e.g. coffee shop), you can just accept with 0 confirmations with minimal/almost zero risk. The cost of ripping you off would be much more than the price of the cup of coffee. In fact, I believe Mezza Grill accepts without looking at confirmations at all, just based on the word of the customer than he transferred a few bitcoins.

I'm not aware of other methods right now, would love to see more answers.

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You can hardly say that there is zero risk with the green address approach. Financial web sites are broken into all the time, especially when they set things up so there is especially quick money to be made. –  nealmcb Sep 7 '11 at 3:02
    
@nealmcb - Right, corrected to "zero risk of double spend attacks" –  ripper234 Sep 7 '11 at 3:20
    
Again, if someone pwns Instawallet (and what online site is truly safe from such an attack?), they could do double spend attacks also. –  nealmcb Sep 7 '11 at 3:31
    
@nealmcb: That's true, but if they ever did, there would immediately be conclusive proof in the form of the conflicting transactions. Ideally, a service like this would post a bond you could claim if that ever happened. (Maybe that will happen in the future.) –  David Schwartz Sep 8 '11 at 3:59
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Yes, I see some kind of insurance policy being the future of these types of things for both e-wallets and instant transfer. –  lemonginger Sep 8 '11 at 4:46

Use an exchange that allows "user to user" transfers, for instance if both parties use MTGOX then they can instantly transfer bitcoins from one to the other.

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