What's really bizarre to me is how a "digital currency" can have such slow transactions. I want my transactions carried out and verified instantly. Right now its minutes to hours. But once the network grows, it could be days.
It's important to note as a business that most "instant" verification provided by traditional payment networks are far from being "fully" verified. Instead, it's more like a preliminary verification. Most merchants who sell for credit cards, Paypal, or even ACH know that their payments can be reversed weeks to even months afterwards.
Bitcoin compresses this drawn-out risk of reversal into a ~1 hour window (0 to 6+ confirmations). So if you're OK with a very small risk of reversal, you can accept payments instantly (i.e., after 0 confirmations). This is perfectly fine if you're selling meals, or domain names, or alpaca socks. If you're selling a car, and you want near absolute certainty that your payment will never be reversed, wait an hour or so for 6 confirmations. After 6 confirmations, payment has been reversed only one known instance in Bitcoin's history, and that payment was eventually returned to the merchant in question (so no merchant has ever lost money after accepting a 6 confirmation transaction).
Now, for consumers, it's a different matter -- there are advantages and disadvantages to Bitcoin. But for merchants, Bitcoin is a very clear winner. And many of us consumers are very happy to buy with Bitcoin.
Not to mention all the non-commercial uses for money transfers Bitcoin fulfills, most notably remittances.
By the way, if you have an idea for a decentralized digital currency with the protection against the Byzantine Generals problem [0] needed to protect against transaction reversals that also provides "full" verification instantly, I encourage you to develop your project. It has the potential to be a Bitcoin killer (then again, the network effect may be too strong...).
And finally, to correct a misconception, the time needed for 6 confirmations on the Bitcoin network will always take an average of an hour, regardless of network size. That's what the self-adjusting Bitcoin difficulty is all about.
I'm not informed as much as I could be about bitcoins, but it's comments like these that make it even more daunting. Slow learning curve I guess.
What happens when the number of bitcoin transactions becomes too great for the network to handle? There is a finite number of computers, they can only process so many transactions at a time. If bitcoin became as popular as the US dollar, would there be enough nodes out there to handle a load of that magnitude? Or, for a more specific example: tomorrow every monetary transaction in the US is done using bitcoin, what happens?
Transactions are effectively carried out and verified instantly right now. Try it yourself on gyft.com or namecheap or anywhere else that takes bitcoin through BitPay. Accepting 0-confirmation small value transactions is the norm.
Also, the confirmation time does not scale with the size of the network. The mining difficulty automatically adjusts to one block every ten minutes on average.
Bitcoin compresses this drawn-out risk of reversal into a ~1 hour window (0 to 6+ confirmations). So if you're OK with a very small risk of reversal, you can accept payments instantly (i.e., after 0 confirmations). This is perfectly fine if you're selling meals, or domain names, or alpaca socks. If you're selling a car, and you want near absolute certainty that your payment will never be reversed, wait an hour or so for 6 confirmations. After 6 confirmations, payment has been reversed only one known instance in Bitcoin's history, and that payment was eventually returned to the merchant in question (so no merchant has ever lost money after accepting a 6 confirmation transaction).
Now, for consumers, it's a different matter -- there are advantages and disadvantages to Bitcoin. But for merchants, Bitcoin is a very clear winner. And many of us consumers are very happy to buy with Bitcoin.
Not to mention all the non-commercial uses for money transfers Bitcoin fulfills, most notably remittances.
By the way, if you have an idea for a decentralized digital currency with the protection against the Byzantine Generals problem [0] needed to protect against transaction reversals that also provides "full" verification instantly, I encourage you to develop your project. It has the potential to be a Bitcoin killer (then again, the network effect may be too strong...).
And finally, to correct a misconception, the time needed for 6 confirmations on the Bitcoin network will always take an average of an hour, regardless of network size. That's what the self-adjusting Bitcoin difficulty is all about.
0. http://en.wikipedia.org/wiki/Byzantine_fault_tolerance