5

This answer suggests popularity growth of people privately exchanging bitcoins for a physical currency, in person. This might occur in "coffee shops, hotels, hostels, hackerspaces, etc".

An example would be 2 travellers meeting in a hostel in, say, the UK. Traveller A has just been to the USA and traveller B is about to go there. Traveller A has US$200 that's no longer needed, so he agrees to exchange it for some of traveller B's bitcoins.

Definitely assume traveller B has a mobile phone or other internet access to perform the transfer, but please consider both cases of traveller A having and not having similar access at the time.

What are the risks of such a deal, and what can be done to improve the chances of a successful deal?

5

I think that "personal safety risks" are outside the scope of this website, so I'll mention the technical risk - double spend. If you don't wait for one confirmation, a double spent attack can be performed, and you won't get your Bitcoins.

Luckily, you'll only have to wait five ten minutes on average for a block to be found (blocks are one every ten minutes, so the expected delay until the next block is five minutes).

After one confirmation, it's very unlikely such a small transaction will be double spent. If you want to increase your security, wait another block or two.

Traveller A doesn't need to have internet, he can use a Pimpcoin-like card (link NSFW), with SMS notifications of incoming transactions.

  • 2
    I think the expected time until the next block is always 10 minutes, not 5. Are you thinking that the last block is probably 5 minutes ago, so we're "half way to finding the next one"? It doesn't work like that. Also, I think we were meant to also consider the case where A doesn't have a phone so won't get the SMS. – Chris Moore Jun 7 '12 at 6:56
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    @ChrisMoore: Right, it's definitely 10 minutes. Block finding time is a memoryless distribution. – Meni Rosenfeld Jun 7 '12 at 7:48
  • PS it's very unlikely that a small transaction will be double-spent even after 0 confirmations. – Meni Rosenfeld Jun 7 '12 at 8:59
  • Right @ChrisMoore, my bad. – ripper234 Jun 7 '12 at 9:03
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    I made a separate question about the expected time between blocks, which led to an interesting discussion. bitcoin.stackexchange.com/q/3909/659 – Chris Moore Jun 7 '12 at 10:11
4

There are capital controls and anti-money laundering laws that are different for each country. The tourist might want to become aware of what the laws are.

1

Further to @ripper234's comment "he can show you a fake BlockExplorer.info clone on his computer that lists the transaction as "confirmed", even though he never broadcast it. ", it's also a possibility that any other software or websites viewed on someone's computer might be faked. This could include the Bitcoin Client itself (even if it looks like it's working). This is a risk for Traveller A for the situation described in the question.

Additionally, assume that any details entered into someone's device are being logged, so don't enter passwords or personal details that you don't want to share.

Traveller A really needs to have some kind device of their own they can use to confirm that the transaction is genuine.

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