

Kenya May Be Primed For Wide-Scale Bitcoin Adoption - cgi_man
http://www.thegenesisblock.com/guest-post-kenya-primed-for-wide-scale-bitcoin-adoption/

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trothamel
Isn't bitcoin too slow to be used for many transactions?

Right now, you can walk into a convenience store, buy a pack of gum, pay with
your credit card, and the transaction clears within ten seconds or so.

From what I understand, a bitcoin transaction isn't set in stone (that is, the
money could be double-spent) until it's placed in a block that someone mines -
and to prevent problems with people mining the same block twice, multiple
blocks. Since one block is mined every ten minutes, we're talking significant
time to process a transaction.

There are ways around this - but IIRC they involve an intermediary that both
sides trust. That intermediary is unlikely to work for free, so it looks like
there would still be a problem.

It's possible that I'm misunderstanding something, or that someone has come up
with a clever solution to this problem since I last checked - in which case,
I'd like to know what the answer is.

~~~
bdcs
I think this may be a case of comparing apples to oranges. You're holding each
method to different standards. Let's apply the same standards to each
protocol:

The credit card transaction can't be double spent after 180 days (or however
long the chargeback period lasts).

Bitcoin can't be double spent after your transaction is seen by the majority
of mining nodes (ca. 10 seconds). Then, after a few blocks are mined
(~30minutes) bitcoin offers unparalleled security.

TL;DR: When comparing credit card transactions' vs bitcoin transactions'
hardness, use similar metrics for confirmation.

~~~
MichaelGG
While correct, it doesn't really address the issue: Bitcoin isn't useful for
such scenarios.

Chargebacks are not quite the same. There's an investigation and so on. I
can't repeatedly take my credit card out, buy $2000 cameras, and claim I
didn't. Bitcoin doesn't have that safety measure.

~~~
johnsoft
Bitcoin nodes will reject transactions that conflict with ones they have
already seen. Once the transaction is broadcasted, the only way to replace it
would be to mine the next block and include it yourself.

The only other feasible way to double spend a merchant would be to scour the
topology and find a client that has low latency to the merchant you are trying
to defraud, but much higher latency to any significant hashing power. Unless
they have their node configured to accept incoming connections, which is not
recommended for merchant nodes, the attack is very difficult to pull off and
requires a significant element of luck to work.

There are also companies like BitPay that will absorb the risk of a double
spend in addition to handling your payment logistics, for a fee less than the
typical credit card fee.

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gbhn
The title, though reflective of the article, is misleading. It should be "Some
speculation about what might happen in the unlikely event that many Kenyans
started using Bitcoin".

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notahacker
It's also speculation which doesn't exactly fill me with confidence the author
knows what he's talking about: the unsupported suggestion that Bitcoin will
stop people asking for bribes is frankly laughable and then he suggests the
"relative consistency" of Bitcoin could be a welcome change above a chart
which appears to show that over the last year the Kenyan shilling has fallen
in value _less than BTC fell in the last week_ (I'm comparing 7 day MtGox USD
exchange rates with a presumably YoY Kenyan inflation rate of <5%)

I really wish Western speculators whose position in BTC vastly exceeds their
financial knowledge wouldn't shill their position by recommending people in
developing countries risk their money

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dreen
Can anyone explain how Bitcoin "removes vulnerability to human corruption"? Is
it because you can see all transactions in the blockchain? Because I fail to
see how does that prevent corruption.

~~~
clarkmoody
As long as a human controls access to something, that something will be
vulnerable to corruption.

Bitcoin removes the vulnerability if it takes the corruptible human out of the
process.

~~~
dreen
Yea ok but it doesn't do that. That is my point. So what do you mean?

~~~
jdreaver
Humans (banks, PayPal, other third parties) are not required to verify
transactions. It means you and only you have access to your bitcoins, and you
don't need a trusted third party in order to use your money. You don't need a
trusted third party to create bitcoins, either (like when governments print
fiat currency).

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monus21
The OP has made some huge assumptions here but MPESA, even with all its social
and economic benefits, only got to where it is today because of Vodafone's
deep pockets.Don't really see a similar Bitcoin champion emerging in these
parts.

~~~
krmboya
I'd say MPESA met a great need, and maintained it's lead ahead of competitors
because of network externalities. Speaking from first-hand experience.

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jdreaver
It seems like Kenya has very little to lose in adopting Bitcoin. I welcome
adding new users, even if they just act to stabilize the currency against
speculators.

~~~
dandelany
I, too, would love to see wider adoption. However, Bitcoin's value is still
extremely volatile. A person could convert their life's savings to Bitcoin and
see its value halved overnight... As the article mentioned, the Kenyan
shilling has gone through some bad inflation cycles but nothing close to
Bitcoin's volatility. Why do you think they have very little to lose? Seems
quite risky to me.

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dobbsbob
When Bitcoin becomes more stable it will be used on every corner on earth.
Right now its too risky, unless you can immediately sell/cash the coins you
take on too much risk. You could sell products online in Kenya 24hrs for a set
price and find out when you wake up bitcoin plunged and you lost money to the
point of giving away your products. So long as there is only 1 major exchange
we are at the whims of speculators and bots.

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bernardlunn
why switch from mpesa which works well and has dominance? Better article maybe
"why mpesa will soon dominate payments in western countries".

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jjsz
Theoretically, one can see all the transactions of Kenya right?

~~~
jdreaver
Indeed, Bitcoin offers just pseudo-anonymity. However, if you are very
disciplined, you can severely limit or even totally remove the possibility of
someone linking you to your Bitcoins. No one even needs to know a transaction
happened in Kenya.

~~~
stinkytaco
>However, if you are very disciplined, you can severely limit or even totally
remove the possibility of someone linking you to your Bitcoins.

I'm curious how you might do this? Basically you must be able to hide the fact
that you own an address, correct? Does that mean using different addresses for
handling transactions while updating the block chain from different IPs (in
different physical locations, just so your phone or simple general geographic
pattern doesn't reveal you)? Is there something I might be missing?

~~~
sliverstorm
IMO the best and only way to do this is to focus on the entry and exit of
funds from the bitcoin cloud. As soon as one address can be tied to you, all
your other accounts can be tied to you, no matter how many games you play with
multiple addresses and shuffling coins around.

If you want to know how to achieve this, look to modern money laundering
practices.

~~~
stinkytaco
Perhaps the word I should have used is "private key" rather than "address".
There's no reason I couldn't have a dozen private keys and wallets that I use
in different locations for different reasons. As long as that private key
can't be tied to me personally (i.e. by protecting my identity during
transactions, transacting in varying locations from varying IPs, etc.) it
should be anonymous.

That would make the protocol useless for day to day transactions like buying
groceries, but at least as anonymous as cash for more sensitive transactions.

~~~
sliverstorm
But see, the private key has to be funded! Unless people start exchanging
private keys instead of bitcoins, and _never_ transfer money in and out of the
wallet, there will still be a trail.

Exchanging private keys is fraught with peril- the originator doesn't lose
knowledge of what the key was when they give it to you. The only way to make
it work safely is to _immediately_ transfer funds out of the key you just
received (to ensure the originator doesn't pull the funds before you can use
them), and then we are back to having a trail. As far as someone following
that trail is concerned, it is just an extra "hop"\- the money still flowed
from IllegalVendorA to <unknown> to You.

You can _certainly_ try to obfuscate things, but the point is _all the data is
there and always will be_ , and even if it seems like a human wouldn't be able
to figure it out, computers are very good at working through graphs!

