Mon Jan 11, 2016 6:39 pm

I read this post by /u/PattayaPete on Reddit the other day and thought it was very relevant as a real world use of 0-conf txThe original post is here.I have run various successful businesses over the past 30 years. One overwhelming lesson this has taught me is that the vast majority of people are honest. I also believe that a majority could be dishonest if the right incentives are applied.A few simple illustrations. My present business is a busy bar and restaurant in a developing country. We operate a tab system for every customer. A customer could easily just walk off and not pay the tab. We serve over 2,000 customers a day but this happens less than 0.00001% of the time.We offer a money back guarantee as have all my previous businesses. If you are not happy for any reason we will refund your money. Obviously in a restaurant we can not also reclaim the goods. People are often shocked that we offer such a guarantee and feel sure we must get ripped off a lot. We do not.Here is the reality. The vast majority of people need to achieve substantial gains before they will risk dishonest behavior. The bigger the potential gain the larger percentage of people will be dishonest. Some people will be honest no matter how large the potential gains but the risk of dishonesty grows as the potential gains grow.The risk of being caught also affects this calculation. As the risk of being caught diminishes so does the amount of potential gain required to foster dishonest behaviour.In the restaurant the risk of being caught skipping out on a tab is small but clearly, from empirical evidence, large enough to discourage this behavior. The risk of being caught making a false claim on the guarantee is virtually 100%. To make the claim you need to advise the staff who will most likely know if your experience was unsatisfactory. You will still get your refund but the staff will know you are dishonest and this in itself seems to be enough to discourage bogus claims.That is why I have always been relaxed about accepting 0 confirmation bitcoins in the restaurant. The reward for cheating is not high enough to make cheating worthwhile. Also the effort required to double spend on these small amounts does not pass the threshold to overcome peoples basic honesty. In two years of accepting 0 confirmation bitcoins and thousands of transactions we have never had a double spend. Not once!In other words, for us, 0 confirmation bitcoins are 100% safe.Now, contrast this with the bitcoin eco-system at large. There are billions of dollars at stake here and clearly the design of bitcoin has to be 100% secure. The threshold for dishonesty is well and truly met and any weakness will be mercilessly exploited. The inventor and developers have rightly made security their number 1 priority.This is why bitcoin experts will explicitly state that 0 confirmation bitcoins are not safe. "The system was not designed to make 0 conf safe and it isn't so we should not allow or encourage it", they say. They extrapolate their system wide view of bitcoin where 0 conf is absolutely not safe, to my restaurant were 0 conf bitcoins are 100% safe (data not theory).Then along comes RBF. This removes the difficulty of pulling off a double spend to zero and the chance of being caught to zero on 0 conf transactions. RBF offers limited and dubious advantages that could easily be implemented differently without breaking 0 conf transactions. It breaks my calculations that 0 conf transactions are 100% safe in my business situation. Maybe once RBF is fully implemented it will still not meet the threshold to cheat but it certainly makes it much lower and my gut tells me it lowers it enough to break 0 conf in my use case scenario.Don't worry though, Lightning Network is coming to save the day with demonstrably safe 0 conf transactions. That's great and I will certainly use it IF it ever actually arrives. For now it is all talk and theory and I can't use it in my restaurant and am unlikely to be able to for the next few years.Who in their right mind would break a real world use scenario for bitcoin now, for a promised improvement way down the track. I totally bought into Satoshi's vision of a digital peer to peer cash outside the existing corrupt monetary system. Now some people want to take that away from me and I am not happy about that.Developers and theorist, please carry on developing and theorizing but don't tell me how to use the system and don't tell me 0 conf has always been unsafe and don't mess up a very very valuable attribute bitcoin has right now for some pie in the sky future that may never actually arrive.