You just hand-waved away the fact that the trust necessary for an independent retailer to accept an "untrusted" credit-card has been aggregated in Visa and MasterCard and codified through tort law and agreements with the aforementioned credit-card companies.
What are you going to do, provide a detailed transaction history to the retailer proving that "your bitcoin transactions always are legit?" Kind of removes the last of the "anonymity" afforded by Bitcoin.
It's normally a matter of seconds until other clients can see a bitcoin transaction that you've posted for the network. The only way that will end up not being legit is if you've double-spent the funds - that won't happen if you're a legit user using a regular client, and for the most part even for a nefarious user it would require significant computing resources (e.g. you've already mined a block spending those coins but won't release it until you walk out of the store).
So the idea is that if you're a regular retail store, accepting unconfirmed transactions is fine. Unless a big exploit becomes known, any fraud you might happen to see certianly won't any higher than the credit card chargebacks you're getting now. If you're selling your house, you probably want to wait for a few block confirmations.
Not to mention there are other crypto-currencies with significantly faster block clearing times, and cryptocoin to cryptocoin exchanges are significantly easier to run than bitcoin to fiat exchanges.
So it really seems like all of this is only a minor inconvenience for bitcoin if anything. And there's certainly no reason to ever have to trust someone because "they've been legit in the past", that's an approximation of trust that previous systems have had to rely on but exactly what bitcoin avoids.
You outlined a couple of scenarios where a transaction can be fraudulent, which is more than the 0 acceptable to a small business where margins are razor-thin already.
You really expect every mom and pop store to accept Bitcoins when they have to be as technically literate as the posters of HN?
>You outlined a couple of scenarios where a transaction can be fraudulent, which is more than the 0 acceptable to a small business where margins are razor-thin already
What? You really think a small business has zero credit card fraud? You're wrong. Not to mention when you get hit with a chargeback, you get charged a fee that is usually higher than the amount stolen from you to begin with.
The credit card companies push fraud liability down to the merchant in the current system.
Bitcoin probably is less susceptible to PoS fraud than credit cards are, from a merchant standpoint. Consumer of course is a different story.
It's not riskier first off, it's less risky, by far. Bitcoin is cash, it can't be charged back and it doesn't incur the fees cards do. To say it's riskier shows you don't know what you're talking about.
Secondly, why would a business turn down any means by which a customer wants to pay? Have you ever run a business? Do you typically turn down cash payments? Bitcoin is cash.
that won't happen if you're a legit user using a regular client, and for the most part even for a nefarious user it would require significant computing resources (e.g. you've already mined a block spending those coins but won't release it until you walk out of the store).
Just in case he's not making it clear from the description of what actually doing that would involve, mining a block is a big deal. You're talking about winning the lottery in competition with 35 million other gigahash/sec worth of mining power. If the worst you want to do with that block is defraud a mom and pop store that accepts bitcoin you're positing a scenario something on the order of a multimillion dollar operation in order to undertake such an attempt. If you're going to do that, you're not going to try to defraud the corner store for a snickers bar.
Also, if that's genuinely not enough;
Not to mention there are other crypto-currencies with significantly faster block clearing times, and cryptocoin to cryptocoin exchanges are significantly easier to run than bitcoin to fiat exchanges.
Plenty of 60 second block confirm altcoin chains out there, no reason to use bitcoin if you absolutely insist on some way to address the double spend "problem".
So having a miner in your pocket is certainly one way to execute a double spend. That's a Finney attack.[0]
The other and less costly way is all about node connectivity.[1] If you are going to execute a double spend all you 'need' to do is broadcast two txs spending the same output at the same time--one going to the merchant the other spending it back to yourself--and cross your fingers and hope the double spend gets put in a block. Now, you can increase the probability (e.g. shielding the merchant's node from your double spend) of success but it's not a sure bet. And the higher the node connectivity of the network (i.e. how many nodes are each node connected to) the harder this attack becomes.
There has been some work in this area, especially in pursuit of the efficacy of double spend attacks in light of some minor changes to the protocol which (I think) were rolled into core with the most release 0.9.0.[2] It's about .09% probability of success.
What are you going to do, provide a detailed transaction history to the retailer proving that "your bitcoin transactions always are legit?" Kind of removes the last of the "anonymity" afforded by Bitcoin.