You got that backwards, one of the two, Mike, suggested to that they should spend some time working on payment channel and improvements like lightning and since they though it was a good idea they did.
Blockstream has to benefit from blocks as large as possible without losing decentralisation and security properties, like everyone else.
To answer to your question, I think your points have already been raised and while I may even share them BIP70 is by default using SSL and X.509 and it seems natural to use it for extensions too.
Other than that, instant confirmation is also done via our own API (which is via wss, ssl) and there is no reason as to why it couldn't be done with ECDSA instead, issue as usual is key management.
You think arbitrage&liquidity between exchanges via instant confirmation is not well suited for exchanges?
Not really, the payment protocol gives you back the full transaction that can be checked by the merchant.
The 'instant' comes from trusting a third party that temporarily controls enough keys to block the funds before they can get double spent but long enough that the tx can be confirmed.
I think fees will get cheaper as times goes by and the bitcoin network and market matures but it is very hard to say right now with the current transaction size limitations.
Bitcoin is still in early development and very niche, so far the incentives have been working well enough but once the block rewards halves is yet to be seen if fees will be competitive enough and whether the price for them will go up. We also have to hope that the block size and the network capacity can grow fast enough to support its own weight.
In general I think that as more players come in the industry the fees of exchanges, atms, debit cards etc will decrease.
I wish some core developer could also contribute to answer your question and provide more insight than i can offer.
We only provide instant confirmations for bitcoins we know that are going to get included in a block long before the nlocktime will expire allowing you to spend them.
An ATM bitcoin to cash manufacturer is testing the functionality right now and another one is planning to integrate it when they implement the payment protocol.
it's called GreenAddress because when I thought about the concept, end of 2012 beginning of 2013 it wasn't yet associated with the bad reputation or MtGox double spends and I felt anyhow that it could be improved (which I think we did).
The modus operandi of the platform is different from the original GreenAddress concept as the instant confirmation comes out of band and is based on multisignature allowing the system to prevent users double spends.
However, like the original GreenAddress concept, it is based on third party trust, there is no magic bullet.
Hello :) author of the proposal here, if you have any question or comment feel free to ask!
Users that trust https://GreenAddress.it can check the instant confirmation inside their wallet (on a UI 'badge' similar to the N confirmations or unconfirmed).
While some platforms are interested in the instant confirmation some will take longer or won't.
For this reason and for external wallet users you can still manually check if a specific transaction is instant via https://greenaddress.it/instant provided that you are the recipient of the transaction and can prove it - and of course that you trust GreenAddress to not allow users to double spend.
The external instant confirmation link does not work for multisig or P2SH external addresses yet.
true. if you want to try a wallet that offers multisig via 2fa, which should protects you more from the above risk, you may want to give https://greenaddress.it a go.
Blockstream has to benefit from blocks as large as possible without losing decentralisation and security properties, like everyone else.