Bitcoin settlement time: An explanation for people who really don't get it

Visa takes from 24 hours (for debit) to 6 months (for credit) to settle.

Visa supports instant verification, but that money can be "taken back" from the merchant at any time during the settlement period. This is called a "chargeback". In Bitcoin-speak it would be called a "double spend".

• Instant verification is suitable for a coffee

• Maybe it's OK for a dinner... but it depends what part of town you're in. In risky neighborhoods, many restaurants don't take Visa.

• Visa cannot be used to buy a car

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Bitcoin's settlement increases in security over time. After a 5 seconds, you have more assurance than 1 second. After 10 minutes, you have more assurance . After 40-60 minutes, you have the equivalent of 6 months of Visa's "settlement".

Bitcoin supports instant verification just like visa. Anyone can, at any time check to see if a transaction is valid - instantly. Just like Visa, that money can be "taken back" from the merchant at any time during the settlement period. This is roughly equivalent to a "chargeback". Currently Bitcoin chargebacks are far less likely than Visa chargebacks. Also, the longer you wait, the less likely a chargeback becomes.

• This suitable for a coffee. Much like a visa transaction.

• In about 20 minutes, you have a level of settlement suitable for buying a car. It would cost far more than a car to alter the blockchain after 2 confirmations. You cannot buy a car with Visa.

• Bitcoin also supports a 20 second "very high likelihood verification", where money is "even harder" to take back

• This is suitable for a dinner - even in a high risk neighborhood!

• There are technologies, like green address, that support instant transactions, with a level of surity appropriate for buying a car, and with a level of convenience like Paypal.

Submitted March 04, 2016 at 04:28AM by earonesty http://bit.ly/1QWlUl7