Topic: Announcing New Product - Bitcard, digital currency in the palm of your hand. (Read 2626 times)

A somewhat more dynamic version.

So I'm clear, this is just a competitor to bit bills right?

http://bitbills.com/

Or is there something different?

j

This will initially launch btc payment only. I will in the future be accepting other forms of payment as well as offering redemption of still sealed cards for currency I will likely accept bitbills for redemption as well.
If all goes well I'll accept other payments before the first series is sold out. If not I'll strive to have other payments online for the next series.

As far as change goes, if the card is to remain a sealed trade unit than change would have to be in smaller denomination cards, or alternative currency. The change solution will come with centralized processing which others are working on.

Are you only accepting BTC for these cards or can people buy them with USD? 

Also how does one make change?

To be clear, this product will not currently interface with a merchant's system for payment. It is to be treated as a redeemable cash tender.
As far as risk of trojan/malware/etc.. that is the same risk that exists with all existing payment systems. Just because you can slot anywhere doesn't mean you should. As with anything you should be careful to ensure that you trust the systems you interface with and follow the same basic security practices as you would with any payment method.

This is better than an atm/credit card in this regard in that the balance is finite and therefore loss to such attacks is limited. No product can protect the end user from careless operation or fraud.

So if I plug this USB flash drive into a strange computer at the POS, what's to stop malware on it from pilfering the contents of the wallet? Maybe I'm missing something.

It sure seems like it wouldn't be THAT hard to set up.

What are the requirements for becoming your own payment processor under an existing platform (i.e. visa/mastercard)?

Yeah, that's what I thought. It would be ideal if it were possible to create a plastic card which could be read by existing technology used in most shops, with the only requirement being custom software. Something similar to a pre-paid visa card but is handled by the custom software.

There are really only 2 transaction types in POS today. Cash and cash equivalents or credit/ach processing. What you are proposing is exactly what is needed, but it can't happen in exactly that way. The idea of funding an account is exactly right. We will have to trust someone to maintain a bitcoin bank account. Existing entities or new ones can meet this need. The real challenge is in the processing network. Getting a half dozen shops to install some custom processing thing might not be so hard so you can buy your comics with BTC but getting 25,000 grocery stores or 25,000 McDonald's across the US to do so is another story.

The cleanest method is easily a bank which does BTC conversions and can participate in the existing processor network. That could potentially allow BTC depository accounts which can be liquidated as needed for actual legal tender when required at the POS. Such a bank could be of great value by offering depositories in gold/silver/btc/etc.

It has to be remembered the BTC is commodity, not money. It will never be legal tender so long as governments rely on fiat to pay the bills and governments will always rely on fiat so long as we elect fiat leaders.
BTC is largely a risk/inflation hedge like gold. So long as people have the general option to spend a dollar or a BTC they will spend the dollar because it is a junk currency. While I would love to participate in the creation of such a bank I know from past research into a gold depository bank that at least under local law I have no where near the capital nor experience required for charter approval.

Perhaps Mr. Creator could get a loan against his 25% stake   and bankroll the startup of such an institution....

For this to really go mainstream, and some time soon, it may be an idea for regular folk, like myself, and particularly those new to bitcoin, to be able to purchase bitcards in fiat currency, just like you can purchase a Travelex or other forex card in your currency of choice.

That is a huge problem I have pondered. Theoretically, the simplest solution could be a Bitcard website where customers have the ability to deposit funds and reload their cards (meaning they would need an easy way to write to the flash storage device on the card). It would take several minutes to verify the transaction and get the card refilled with BTC, but after that, the card could be used instantly. Merchants could easily verify purchases with the card by interfacing with an API offered by Bitcard website. Would that work?

EDIT: What am I thinking, they wouldn't need to write anything to the card. The card would simply verify their identity and then check their Bitcard account has enough funds available.

I completely agree with you on that. Technology may be constantly getting better and better, but that is not the point. Not everyone uses or can afford the newest types of storage devices. Not to mention, 1GB is actually quite a lot in comparison to my total bandwidth quota, and does actually take a while to download, since I live in a rural part of Australia.

This is going to be a problem for BTC products to deal with. There are two options, constantly increasing the memory of portable BTC devices or adoption of pruning or headless technologies. The first choice is no choice at all since it is a losing battle with cost. I expect in the next 6 months we will see a variety of new client technologies which will be gladly adopted by myself and others developing BTC products.

Frankly, the concept of requiring end users to download and maintain gigs of data to participate in the system is otherworldly. But, that has been gone on at length in other threads

Won't the block chain be > 1GB by the year's end?

Indeed, there really isn't a way that I see at this stage to have both variable balance AND secure trading cards. The reason debit cards work is because the store or ATM equipment first verifies that the person presenting for payment owns the account and contacts a third party processing system, for example Concord, which then connects to the bank that has the money, verifies the actual owner of the money and funds availability and debits the account at the bank and credits the account at the merchant.

Bitcoin has a problem to date in that there is no integration except in custom POS or stand beside configuration that a merchant could verify bitcoin. Also there is currently no way to verify without accessing the wallet at the POS, a security risk, that the presenter is A) the owner of the public key presented or B) to initiate a debit/credit request on the bitcoin network.

For bitcoin debits to work, just like for the currency exchanges central multi-party ecns need to be developed to be the trust arbiters.

This card can either be a trusted cash method or an untrusted variable balance card per the users whim, but without a 3rd party verifier it cannot act as both.

It would seem that what could work in theory is that a purchaser initiates a payment  request, the central authority or local POS system issues a challenge which the initiator would respond to using their private key. If the identity is true than the answer would be correct using the known public key, if the answer was incorrect than the processor would know the identity was false. Like a pin check. Could this pose a method for reversing the private key?

If the identity check succeeds the processor could then check the block chain to verify the available BTC for the given address. This could be troublesome if BTC are split amongst various IDs in the same wallet giving insufficient funds reports and declined transactions.

If ID check and balance checks are good than there would need to be a payment submitted. This has two problems, first, the 10 minute wait time for a single block verification (at average theory time). Customers cannot wait 30 seconds, much less 10 minutes. Second, the requirement that the transaction actually be processed means that someone other than the customer has to initiate the payment request since customers cannot be relied on to act in good faith at all times.

In short, a 3rd party trusted processor is required as an escrow agent of sorts in the process.

From a practical standpoint, I work in POS so I say this with relative comfort, it is extremely unlikely that anyone other than a technophile shop owner would have a stand beside processing system for BTC. The only hope of widespread variable balance/debit card bitcoin products is to have existing processors treat BTC as a foreign currency in which case BTC would be handled like a payment in foreign funds exchanged at the card issuer's rate at the time of purchase.

Nice and all. But far too soon. The value of Bitcoin is in its redemption to real currency. As you say:

"This of course requires some degree of market stability. It is hard to exchange 1000 bitcoins for cash if the market is only 200 deep at the given rate."

Oh...so it's like a pre-paid, one-time card? Hmmm...let down. 

I also anticipate that since this product is tangible, and is delivered, that CC sales and other consumer cash for product payment methods will be possible.

At present to redeem this product in its sealed minted state a person or business after accepting it like cash would need to break the seal and transfer off the bitcoins.

Depending on the market I am considering offering a market channel for distributors of pre-loaded cards (if you wanted you could distribute these to local retailers or sell them yourself) and cash buy back of sealed cards so that merchants could redeem them in exchange for a check by mail-in. This would add an extra layer of efficiency through re-minting cards. As far as instant redemption for cash, the best way would be for a merchant to unseal and transfer the coins to an instant sell exchange. That is a function they would be more suited to. This of course requires some degree of market stability. It is hard to exchange 1000 bitcoins for cash if the market is only 200 deep at the given rate.

As it is, anyone with sufficient reserves could act as a 3rd party redemption point in their local area offering a value added service by accepting the cards in exchange for cash and completing the process of transferring the BTC to a sell exchange and collecting a skim on exchange rates or fees for services. Consider that every credit card transaction costs the equivalent of .02 bitcoins plus 2% or more. If the same fee structure were applied to redemptions a redemption point which processes 1000BTC/week would bring in about $320/USD/Week.

The distributor/redemption center could be the same entity and make a front and backend revenue stream.

It would be beneficial if perhaps the mountains and hills could form an ecn to standardize exchange rates and market orders.

nice

We need more companies that are like this started. Best of luck with your business.