Blockstream/Core has chosen a path of settlement/SoV for Bitcoin Core (BTC), leaving Bitcoin Cash (BCH) to pursue the original intent of the Bitcoin whitepaper namely – electronic commerce. As a bricks-and-mortar merchant, applying a settlement/SoV system for what is clearly an electronic commerce application has obvious limitations (outlined specifically below).
Given that Bitcoin Core (BTC) has 10x transaction load of Bitcoin Cash (BCH), it is tempting to assume BTC has 10x the number of bricks-and-mortar merchants also.
So, are there any bricks-and-mortar merchants still accepting Bitcoin Core (BTC) and if so, how have they adjusted to the limitations of using a settlement/SoV system for electronic commerce?
Blockstream/core added Replace-by-Fee (RBF) whereby merchants must detect a customer setting the RBF flag or risk having the funds stolen with an effortless RBF double-spend when the customer leaves the store. Merchants detecting RBF should consider withholding goods until the TX is confirmed.
Blockstream/core instituted artificial congestion with their 1MB blocksize limit. Thus, for the merchant to consider accepting 0-conf, a merchant must examine the customer’s TXs fee with respect to the Mempool fee distribution and Mempool size to ensure the customer’s TX joins the top 2000 Mempool TXs (those likely to be included in the next block) for an acceptable 0-conf risk (A customer must also check the Mempool fee distribution and size in order to meet the fee and RBF flag conditions that the merchant sets or suffer the variable wait time for their TX to confirm which could very well skip several blocks).
If a merchant can see the customer’s TX in the top 2,000 Mempool transactions, at what rate are new TXs joining the Mempool and how likely will the customer’s TX be bumped from the set of TX’s included in the next block (A situation further complicated by block time variance)?
Merchants must contend with nonlinear fee rises with each uptick in speculation or trade.