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  • I think I heard you quote somewhere that like 86% of the commercial transactions are taking place uh in person anyways and that's the market you're going for.

  • Did I get that stat right?

  • Or was that pre pandemic or?

  • No?

  • That's post pandemic really.

  • Actually that that wood should be over 90% in the U.

  • S.

  • That would surprise most people because they just assume they're making everything online in payments.

  • But is the reality different because they're not remembering each one of those physical payments they make.

  • Yeah.

  • So think about anyone that drives all your fuel purchases are done in person.

  • When you go to the grocery store, all of those purchases are done in person uh still you know clothing and other like durable goods at home.

  • All your furniture is a lot of it is purchasing person.

  • So there's surprisingly a lot more um you know physical retail payments.

  • I think people recognize particularly around grocery, you know those are some of the biggest markets out there.

  • So we're like a you know a movie theater, right?

  • All these things you start adding up actually do a lot of these things is like a human physical human being.

  • And I'm making all these payments where a lot of the convenience products are often buying online.

  • So e commerce is still absolutely still accelerating, right?

  • So it's not slowing down at all.

  • And the pandemic may be growing faster.

  • So I think that number is going to continue going down and down and down.

  • But I don't see a world where it becomes zero or there'll be some point where it stabilizes where there's a certain amount of things we always buy in person.

  • It will just maintain that way.

  • Yeah.

  • Now that I think about it every time I double click my phone and use Apple Pay during the day it's quite a few times you know because I'm walking here doing this doing that so it's actually more than I you know how often do I use amazon once every couple of days.

  • So it makes a really good point.

  • Alright let's look at a use case scenario right now say I go to a store that accepts say Bitcoin if you find one out there or light coin and it gives me the option of paying with crypto versus that same store that accepts flex to.

  • Um And I don't know a good example.

  • I don't know if Starbucks accepts that probably doesn't but I walk in right now.

  • First of all is it even physically possible to pay with Bitcoin with the speed of transactions right now what is the current state of the art because I don't think most people know transaction times any of those other friction points that are currently there.

  • Oh man that's a I could take a few hours to answer that question.

  • The short answer is hens.

  • Uh and it's all about the context.

  • So the first thing is do people want to spend Bitcoins?

  • That's already a whole hurdle and discussion register but assuming they do which is but they don't they don't, do they?

  • I don't think that I mean why why would you write?

  • It's really it's narrative right now.

  • Right wrong or whatever uh is that it's a story value and why would you go buy things with the store value that you bought with the intent of it appreciating further?

  • Um you know as a narrative right?

  • So you can agree or disagree but that is the prominent narrative.

  • So I don't really think people want to spend that stuff but assuming they do now it really depends on what you're buying and what the context is.

  • If it's someone that you reasonably trust or it's a small transaction you could probably do zero, you know unconfirmed transactions.

  • You know just anything in the mental is going to be fine and you can actually get transactions pretty quickly that way.

  • So buying coffee in a reasonable way from someone or a small or medium sized merchant might just work great actually with like Bitcoin with Bitcoin would probably, but only Bitcoin right now nothing else would Um almost anything right if it was a small transaction if you were to give me $10 in crypto was really because the only thing that can happen is that you would basically replace that transaction with the higher fee transaction or You could work through some sort of a malicious network to try to take over the network or you have some insider information, you know there's gonna be some sort of weird for happening like these sorts of things.

  • The reality is for a $10 transaction that just doesn't play into the scope of a practical usability.

  • So for small transactions I think it's just completely fine.

  • You can just say hit the men pull it only takes a few seconds like this would actually be fine and I can accept this payment.

  • The problem though is that it starts to scale That becomes now nontrivial of what risk is actually there.

  • So there isn't an exact you know threshold.

  • But let's say you're someone like Walmart and you might be accepting $10 million 10 minutes.

  • That's not a problem because that is a scale where now a miner could collude and actually you know present a different version of the chain and now all those transactions ever occurred right?

  • Or you could replace all those transactions you know with replace by fee and now and that's so economically feasible.

  • Like in fact it's like the outcome.

  • This is what fraudsters do.

  • There's literally um Stats that say something like a sad status, something like all Internet traffic to the continent of Africa like 60% is fraud like 60 because of how many operations have been set up there around.

  • Just like literally financial transaction fraud so that's just the scale that we're dealing with to where if you're going to open up a network like this like they don't understand it now it's an accepted the same way but there is zero chance that if there's a vulnerability where people can print tens of millions of dollars just do a simple vulnerability like that.

  • It will happen.

  • So there's a threshold where it becomes practically usable and fine versus there's no possible way we would ever consider this because this would be financial suicide.

  • So there's some inflection in the middle now even though these are in person because there's one thing if I swarm their online site with you know 400 orders in 1000 each.

  • But if you've got to be in person for each one is that reduce the chance of fraud or they'll still, it still can be done.

  • Still depends right?

  • So let's say it was large enough and I was buying a $5000 tv or something right from one of these places and then I had 100 of my friends or 1000 because again these are crime syndicates that literally do this today.

  • And 1000 people are now all of a sudden buying these multi $1000 TVs to really push this up into the multimillion dollar figures all at once and at a scale like walmart, I mean you have more than 1000 stores so that's actually barely feasible and wouldn't even look all that crazy to happen and what they do is you make all those transactions and now all of a sudden there's millions of dollars worth of of you know one confirmation transactions and then you could just attack the chain and potentially published a new version and you could collude with minors.

  • Again it's is it likely?

  • Probably not but it's a possibility and it's certainly not a risk that a merchant would underwrite by saying oh yeah we'll do this and we're totally subject to this black swan of something happening and we could just lose all these transactions all this value at any given time.

  • Because yeah the short is just talking around economic finality to where the easier description is.

  • Let's just hypothetically say it costs $50,000 to its close right a block to the Bitcoin Blockchain, right?

  • So if that costs you $50,000, if I'm gonna give you $500,000 in a transaction.

  • Well economically just Very hand wavy and straight forward, I should wait for 10 Bitcoin blocks Because in theory then it's economically advantageous to you to try to build the system to actually take over the chain.

  • Rewrite transactions because I need 10 blocks which would equate to $500,000 worth of value Where you get more than that back.

  • If you were able to rewrite the chain in less than 10 blocks.

  • So that's you know a little bit of hand waving math.

  • But the concept is absolutely true and so that's what this economic finality concept is is you know everyone likes to talk about this state of this Blockchain is final, right?

  • That this is a final state, like totally immutable.

  • Like yes, but there's always a cost where it can be.

  • There's always a non infinite cost to make something completely rewritable and to change the state of the chain.

  • If you take over the chain or an approve of state network, there's other types of different attacks that you can, you can experience.

  • So again, you just need to get to a state where it's economically unfeasible or economically not valuable and then you're in great shape.

  • So I'm by no means saying this is a negative necessarily the system, but it's a limitation that to really harness all these sorts of payments you just need to be really aware of.

  • Um, it's things like how exchanges, right, Crypto exchanges are the same where they wait for a certain amount of confirmations before they let you trade or draw assets.

  • Right?

I think I heard you quote somewhere that like 86% of the commercial transactions are taking place uh in person anyways and that's the market you're going for.

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B1 transaction chain buying accepts state fraud

86% OF POST PANDEMIC PAYMENTS ARE STILL DONE IN PERSON ? Tyler Spalding

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    林宜悉 posted on 2021/11/24
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