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Coinbase hires Charlie Lee, creator of Litecoin

blog.coinbase.com

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Re: Coinbase hires Charlie Lee, creator of Litecoin

#31

Post by ISL »

dragontamer wrote: post #10
TomGullen wrote: post #8

Earlier quoted context omitted.

Can't there exist a company that accepts Bitcoin transactions on behalf of clients (shops) and guarantees them? Even if a transaction fails, the company coughs up, and to make ends meet they charge a small per-transaction fee. Even without this, it's quite possible that bad bitcoin transactions will be far less costly to shops on average. If a shop sells a coffee for $2 paid for by a bad bitcoin transaction, the shop…

Why would a consumer put up with such a company? You've got the economics backwards. Consumers want features such as reversibility of transactions, money back guarantees, and reward points. Credit Card companies offer _customers_ rights, not the business. Businesses put up with credit card companies because it brings them additional business. If you want to create a pro-business "transaction framework", go on ahead.…

Some consumers would rather have lower prices and happier merchants than rewards points.

I'd much rather pay for my coffee in digital cash than pay an extra 2%+ to facilitate the transaction. If the product is poor, I just won't buy it again. Same goes for lunch, etc.

Cards that return ~1% back highlight a problem; the transaction fees are too high. $0.10/bitcoin transaction [1] is also steep for minor transactions. If it were more like $0.01, tiny transactions might take off...

Chargeback/escrow services/guarantees are appropriate when the money involved isn't small in relevant units.

[1] https://en.bitcoin.it/wiki/Transaction_fees

Re: Coinbase hires Charlie Lee, creator of Litecoin

#32

Post by Simucal »

enraged_camel wrote: post #19
yapcguy wrote: post #9

"Creator" of Litecoin - is this some kind of joke? Litecoin is a trivial fork of Bitcoin. Litecoin uses scrypt instead of SHA256 for proof-of-work and the total number of coins is 84 million instead of 21 million. That's it!

How does it feel to be so embarrassingly ignorant all the time?

What are some other differences?

Re: Coinbase hires Charlie Lee, creator of Litecoin

#33

Post by marcell »

ISL wrote: post #31
dragontamer wrote: post #10

Earlier quoted context omitted.

Why would a consumer put up with such a company? You've got the economics backwards. Consumers want features such as reversibility of transactions, money back guarantees, and reward points. Credit Card companies offer _customers_ rights, not the business. Businesses put up with credit card companies because it brings them additional business. If you want to create a pro-business "transaction framework", go on ahead.…

Some consumers would rather have lower prices and happier merchants than rewards points. I'd much rather pay for my coffee in digital cash than pay an extra 2%+ to facilitate the transaction. If the product is poor, I just won't buy it again. Same goes for lunch, etc. Cards that return ~1% back highlight a problem; the transaction fees are too high. $0.10/bitcoin transaction [1] is also steep for minor transactions.…

FYI, default minimum transaction fee is 0.0001 BTC in current version, or about $0.01.

Re: Coinbase hires Charlie Lee, creator of Litecoin

#34

Post by yapcguy »

enraged_camel wrote: post #19
yapcguy wrote: post #9

"Creator" of Litecoin - is this some kind of joke? Litecoin is a trivial fork of Bitcoin. Litecoin uses scrypt instead of SHA256 for proof-of-work and the total number of coins is 84 million instead of 21 million. That's it!

How does it feel to be so embarrassingly ignorant all the time?

So if I fork Bitcoin by changing the hashing algorithm and tweaking a parameter, am I suddenly a "creator" too? Get real. This is an insult to Satoshi Nakamoto.

Re: Coinbase hires Charlie Lee, creator of Litecoin

#35

Post by bdcs »

dragontamer wrote: post #3
mikemoka wrote: post #2

I can't be convinced that bitcoin is anything but inevitable, and I think that it will, at some point in the near future, solve its apparent problems by means of a company born from its very ecosystem

BTC is going to have issues as long as it takes a significant period of time to confirm a BTC transfer. I'm seeing reports of people trying to buy coffee, but the BTC transfer takes so long to confirm that the customer is long gone before you know whether or not the BTCs really transferred. Nothing can stop this either, it is innate to the system. BTC confirmations will take on the average 10minutes, but can last muc…

"Confirmed" has two definitions depending on if you apply it to credit cards or Bitcoin:

1 "Confirmed with a certainty that's good enough for values less than 10,000USD" )

Credit cards are good for this basically instantly... unless the register is "taking longer than normal today." It is on the order of seconds. Notice that PayPal doesn't accept credit card payments over 10K AND takes a large percentage. The same is true of Escrow.com, for example. Wires (SEPA in eu) take several hours, but are much more used at these amounts.

With bitcoins, this is true once 90% of the nodes have a transaction in their memory pools which ALSO happens to be on the order of seconds (you can watch propagation of transactions on blockchain.info)

2 "Truly irreversible")

This level of confirmation is true of credit cards after, usually, 180 or 270 days. Whereas with Bitcoin this is true after 4 or 5 confirmations (~40-50 minutes).

Bitcoin's speed gets a bad rep because it is held up to definition #2 and credit cards are only held to a standard of definition #1. This whole non-sense about litecoin solving ANY problems is just that: nonsense. The some members bitcoin community clamored for bitcoin to decrease the confirmation time, but the core devs knew it wasn't necessary. In fact, Charlie Lee, in an effort to satiate these requests created an altcoin, Litecoin, to confirm faster, so that the discussion of bitcoin could regain its track.

TL;DR: Bitcoin is very much confirmed within seconds, just like credit cards. Litecoin's faster confirmation time contributes very little (unneeded) benefit.

Re: Coinbase hires Charlie Lee, creator of Litecoin

#36

Post by bdcs »

yapcguy wrote: post #9

"Creator" of Litecoin - is this some kind of joke? Litecoin is a trivial fork of Bitcoin. Litecoin uses scrypt instead of SHA256 for proof-of-work and the total number of coins is 84 million instead of 21 million. That's it!

Charlie Lee is well aware of this. He created Litecoin to stop endless requests to change bitcoin to a faster confirmation time, even though the benefits are scarce.

Re: Coinbase hires Charlie Lee, creator of Litecoin

#37

Post by hvidgaard »

dragontamer wrote: post #28
richcollins wrote: post #25

Earlier quoted context omitted.

You can just wait until its in the memory pool of some trusted nodes. Double spend risk on coffee isn't worth waiting for a block.

What about a $100+ grocery transaction? Are people willing to wait around 10 minutes in front of the cash register to wait for a single blockchain confirmation?

There isn't any real risk of double spend attacks. The effort it takes to make a double spend happen requires far more money than that (and no, I'm not taking about a 51% attack), and is not reliable in any way.

A transaction is broadcasted to most of the network, and certainly to the main pools within seconds. So once you see a transaction in the pool of trusted miners, you can assume it's okay. The only "real" possibility of it being a double spend is if they appear on the network at the same time, but is visible when the second transaction uses money that the previous transaction have spend. At that point it's equivalent to the credit card failing from an interruption in the connection - you just try again (the oldest win).

Re: Coinbase hires Charlie Lee, creator of Litecoin

#38

Post by hvidgaard »

nazgulnarsil wrote: post #21

Just a FYI: Litecoin does NOT confirm faster than bitcoins. Based on how the core bitcoin protocol works (which litecoin does not alter), a halving in confirmation time is also a halving in reliability of the confirmation.

How is that? My understanding is all it does is slightly reducing the time it takes to successfully make a 51% attack, and slightly increase the risk of orphaned blocks.

The reduction in time to perform a 51% attack is countered with just a few more conformations.

Re: Coinbase hires Charlie Lee, creator of Litecoin

#39

Post by hvidgaard »

gigq wrote: post #24

Is anyone else surprised that the creator of Litecoin needed to take a job? Given that the market cap of Litecoin is 53 million I would have expected the creator to have mined a good amount of that in the early days. Of course he may have just wanted to take the job and not needed it but I would have assumed he would have worked on something for the Litecoin ecosystem.

Perhaps the job is an opportunity for Litecoin that he would otherwise never have hoped to make happen?

Re: Coinbase hires Charlie Lee, creator of Litecoin

#40

Post by nullc »

gigq wrote: post #26
dragontamer wrote: post #3

Earlier quoted context omitted.

BTC is going to have issues as long as it takes a significant period of time to confirm a BTC transfer. I'm seeing reports of people trying to buy coffee, but the BTC transfer takes so long to confirm that the customer is long gone before you know whether or not the BTCs really transferred. Nothing can stop this either, it is innate to the system. BTC confirmations will take on the average 10minutes, but can last muc…

There is the concept of green addresses ( https://en.bitcoin.it/wiki/Green_address ) to solve this. Basically if customers use a wallet that the merchant trusts not to commit a double spend then they can safely accept a zero confirmation transaction. MtGox and Bridgewalker ( https://www.bridgewalkerapp.com ) support this so if you trust them and your customer uses them then you can accept the transaction immediately.…

Green addresses, specifically, are not a great solution because they thoroughly disrupt Bitcoin's privacy and frangibility model by making that source identification highly public.

But fortunately you can do something which is almost exactly equal: Have the trusted party just hand a buyer a signature of the transaction ID, which they hand to their vendor.

No one but the involved parties see the data... and it allows other models like ones where you retain control of your own funds and the signing party just agrees to take the risk the you cheat (and the cost of tracking you down if you do).

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