Author: Troy Benjegerdes 2015-02-19 08:56:04
Published on: 2015-02-19T08:56:04+00:00
In a discussion around settlement times in payment systems, it is argued that the longer times are a feature and not a bug as it allows more time for humans to react to errors. However, the longer settlement time is also a direct consequence of non-finality in current electronic payment systems and results in transfer costs. Satoshi made this point in the bitcoin whitepaper saying, "with the possibility of reversal, the need for trust spreads". The argument is made that reversible mechanisms built on top of bitcoin make sense for most activities, but it is impossible to build a non-reversible layer on top of a reversible layer. On the other hand, having a base currency that is non-reversible makes the system brittle and too big to fail. The blockchain improves on everything else by providing transparency and allowing for continuous transaction reversal rates instead of sudden failures. Therefore, it is suggested to extend zero-conf double-spend transaction reversal explicitly to give senders and receivers a choice to use it or not.
Updated on: 2023-06-09T16:53:20.705922+00:00