Topic: Bitcoin smartcard Point of Sale terminal - page 5. (Read 26864 times)

I agree, it would be helpful, but you'll have to seed the market for it to be meaningful.  Incidentally, markets can be big or small as in mass marketing or niche market. They can be high margin or they can generate losses. Markets in the strategic design sense is separate from profits.  People can seek profitable markets or narrow their definition to make the market more profitable (i.e., exclude poorer people) A market is just a collection of people who you believe will benefit from your good or service.  For programmers it's like a collection of objects, where objects are always people.

When defining a market segment for the purposes of developing new payment systems I look for what is the most accessible, low-cost technology at the POS for both customer and merchant. Avoiding the whole hardware sell, install, train headache. So in the case of Greece solutions may well look more like M-Pesa (9 million people in 3 years. B/c it is a top down authoritarian model. They're being studied at all the top B-schools now) or the mobile solution in Ghana (open source with equal rights to participation for all consumers and all telcos)

Don't assume that b/c those economies are lesser developed that they haven't found a way to exchange value without using the debit and credit card networks, b/c they have and in that sense they are years ahead of the US (ironic isn't it?) Mass market access to mobile payment, elite only access to Visa/MC. The very opposite of the US. In our case we'd replace bank ACH clearing and settlement with BTC clearing and settlement.

Oops my bad, didn't mean to misquote you. Sloppy on my part. I was merely giving the context for why the card providers developed the smart card technology to make it a little easier for people to understand its limitations.

I imagine the "supercards" are less than $20.  The point is that once you have a display and keypad, you don't need a reader.  So the cost is similar.


No, there's no need to manually enter the transaction amount.  Transactions can be sent over the wire.  This is irrelevant.


A lot of smartcard apps are poorly designed.  But it isn't black magic or anything.  It's definitely doable.  Look at the satellite TV access cards.  They can be reverse engineered, if you have access to the card itself and a scanning electron microscope.


Why are you mis-quoting me?

Well, I wouldn't exactly call them "my market". I don't have the resources to launch a huge BTC promotion in Greece (nor do I have greek contacts), although I am curious; how could you use BTC with an old flip phone?

Also, that would depend on what technology is commonly affordable/available in Greece. Since "not EUR/ECB" is the most appealing feature of BTC for Greeks, delivering the currency to them requires putting it in whatever form is most available to them. I don't even have the slightest clue what greeks commonly use or have.

I'm only interested in that point because it would be nice to see the people of a country outsmart their multi-hierarchal dictators for once, not particularly because I want to profit from the venture.


Well if the initial outlay for a USB card reader isn't so bad, and you can get a card with a numpad, then you could just input the price they display to you on your card, enter your pin, then hit send. The card signs a tx with only that exact value so they can't change the price after you begin entering your pin. It could be doable but it seems a bit complicated imo. That and, what's the price difference between a USB card reader + supercard with screen and such vs the cost of the cheapest BTC runnable smartphone?

assuming you can even implement a protocol that doesn't allow the private keys to be leaked, you'll also need some sort of way to prevent unscrupulous merchants from skimming the card using a tampered terminal.

related vid:
http://www.youtube.com/watch?v=JABJlvrZWbY

Obviously it doesn't in that case.  What I'm proposing is that you stick your card into a machine and deposit your $5, the machine sends a +1 BTC transaction, it gets displayed on the card, and you okay it.  The card keeps track of your balance.

For the cards I posted at least, if you browse the site you can see they have cards with keypads as well.  It would be possible to manually set your balance with those.


Same solution, cards with keypads.  But a pin is not necessarily a requirement, especially when using multisig keys as mentioned.  Ultimately a reader is only like $15 anyways so I think your minimum outlay is going to be around $20 regardless of which type of card you use.


The high end cards can store several keys, several hundred even.

Okay, If I understand you now. If you'd like to build a prototype geared to the Greek market? Because if that's the case, I'd recommend a mobile solution rather than a card based solution. Matters not what kind of phone they have, old flip fone, smartphone... The key to making it work is a middle office. You'd have to build that. Where would customers get their BTCs? From storefronts or online via the exchanges? If I am hearing you about your target market we can work out more details...

I believe ithaca uses a time-currency worth about ~$10 an hour. There's also Berkshares and a few others. All of said currencies come with a socialist hook, however.

My question is, even if you load BTC to your smartcard's address without connecting it to your computer somehow, how does the card know how much is on it? Seems to me it'd be up to memory and luck to make sure you didn't overdraft, which would end up sending an invalid tx anyway. More importantly, how do you set your pin without a central authority doing it for you? I think it's also worth noting that if a card continuously re-uses a single address, then it kinda kills your privacy too.

On the merchant end, assuming physical sales, there's still the problem of integrating a bitcoind backend for register and accounting software, and exchange risk. It seems to me CAO/ICS systems would be less affected, if at all except for the inherent exchange risk involved.

Protecting against double spends = easy
Protecting against exchange risk = not so much
Protecting against arbitrary government confiscation and dealing with accounting conversions = jungle gym

In Greece I think all the disadvantages are moot. Greek business owners currently can't get loans, greek people have no money to spend, and the value of the Eur is evaporating out from under them both in government debt and inflation. Anything that would allow them to easily manage their business or even do business at all would be nothing short of deus ex machina for them, and it's not like they give a damn about complying with government tax regulations or anything. They would like nothing better than for the EUR, the ECB, the IMF, the unelected European Commission, and their own unelected government to hurry up and die so they can get on with their lives.

There are a few paper-based analogs. I seem to remember reading of a handful of towns that created there own voucher (currency) that could be used in all the shops in that town.  Maybe Ithaca NY (Cornell) was one?

Yes agree, the US markets are highly regulated and the FATF is driving KYC rules thru the entire global payments systems via SWIFT. Remember that anyone using the VISA or MC networks must have a BIN to even apply for access. 

I think your system will work and if you work 100% in BTC you may not even need a money transmittal license until such time BTCs are formally defined. Having said that, there is a elephant in the room that simply cannot be ignored. For everyday mom and pop shops, they would really have to be BTC enthusiasts b/c at present the # of potential customers, likely sales and the costs and risks of running a separate offline payments system that has to be marked to market and cashed out on an exchange is likely to be a very hard sell given the dollar amount in tax savings. 

Or to put it another way, can you think of actual products or specific types of stores that would benefit from adding a BTC capability and have you constructed a simple spreadsheet showing the # of such goods or services they would have to sell to break even on their startup costs (meaning lower cost per transaction + interest on deferred taxes)?

As some point all of us early adopters and innovators will need to level up quite a bit in terms of infrastructure/support (hardware+ software, txt & video manuals = ease of use) if we expect to see the growth in BTCs acceptance and usage that gets us to some sort of tipping point in the brick & mortar world. Strategically, I am developing a pretty clear vision of how BTCs can interact with the current global payment systems, and to me that's exciting. As for network and app development, I am a total noob, all I can offer is a list of must have functionality.

Yeah that seems quite impossible as the card would need to access mtgox, sell the BTC, send it back from mtgox... not happening via terminal!


The same could be said for BTC, why did it ever take off?

Well however we debate that part of the reason was because it was THERE and it was USEFUL. If we focus on just that we can't mess up.

As for advanced merchants as you describe, for now, I would ignore them completely.

Well isn't it pretty sad that WE can't use our own damn currency even if we all lived in one town?

Lets fix that and see what happens.

It should not be much of a stretch to wire a USB cable from that into the corp computer that merges it with the normal POS data.

True. You'll need to factor in Merchants reluctance. They tend to be afraid of voiding their warrantee, and that an untested systems might write errors to their G/L. So doable, but time to sell and implement and merchant value proposition must be compelling.


Otherwise all transactions and their times going into the corp address would be in the blockchain for later auditors.

So we're talking BTC converts like ourselves....

Universal adaptor, sorry mate, not really in scope for the way you are envisioning your system. I was thinking about a virtual wallet that enables BTC to link seamlessly into debit or credit card networks.  Okay back to your design. It's likely best to work with whatever hardware is currently in place. Selling into small mom & pop shops will be easier than selling into a national chain (but still time consuming) b/c they are more likely to accept some manual processes.

Sure you could depend on someone else to handle exchange risk, but hedging exchange risk might give you the opportunity to offset the cost of deploying your solution. (Most smaller merchants are not that tech savvy and rather risk adverse)  In my experience changing Merchant behavior to achieve meaningful scale will involve some sort of incentive meaning accepting BTCs is cheaper and/or brings new Biz.

If you want a recent analog, take a look at GreenDot. (Since they are publicly traded you should be able to get their Annual Report for the past few years from the SEC's website for free. In it you'll see a bit more about the cost of floating their system.  It ain't cheap) Sure the hardware relative cheap but the time and labor to implement, not so much.

Sure you could design an opt in Smart Card system, but it'll be more like a novelty/alpha test than a prototype/beta test.

Payment systems are hard b/c they are highly regulated, little is published, and they touch both Merchant-- Inventory Mgmt and the G/L of the business on the front end, and cash management, accounting and audit in the back office. Realize that one way the regulators and IRS are able to "encouraged" the Merchants to follow best practices is to link compliance to bank--loans, cash management services, and even merchant acquiring accounts.

I agree that is unacceptable, I am talking about a pure BTC system - client = bank, BTC card = USD credit card and BTC POS = Visa terminal.

A complete replacement, beautiful, simple, cheap and pure like BTC itself.

Well lets say we develop a POS terminal accepting BTC (cards) directly.

It should not be much of a stretch to wire a USB cable from that into the corp computer that merges it with the normal POS data.

We would provide an API for communicating with the BTC terminal of course.

Otherwise all transactions and their times going into the corp address would be in the blockchain for later auditors.


Anyway big businesses will not be the first adopters, lets focus on the small guys - and thus, I think, the Android + 15$ cable connector.

Sorry about the delayed response.  Any design leveraging the card processing network. Any network that registers debit or credits in USD. It you co-locate a private BTC only network that doesn't talk to the merchant's cash register then you may as well move straight to mobile as the merchant will then have to reconcile by hand all BTC trade, since they well need some sort of paper trail for the accountants/ auditors.

Well there is no reason we can't develop the software for real terminals first, but where do you think our chances are best? Immigrant shops that would prefer using their Android or big supermarket chains?

Whatever the shape of the curve it can't begin before we create this tech - we could be the creators of a new world spanning standard here.

The components would cost in total 15$ as I wrote last post - that is at LEAST 10x cheaper than a normal POS system in my country.

If you go full terminal the cost largely remains the same, but you don't get a nice smartphone in the package to use after work.


The system would be cheaper actually, both in implementation and use:

You just go by unconfirmed transactions.

If somebody pulls a double spend they get arrested as they are on your store camera or witnesses saw them.

Heck even pulling off a double spend is pretty hard to do, especially considering that we could program the POS to check for it (lots of transactions suddenly coming from the address after purchase).

You would wait max. 10s. - the time it takes to pack your groceries anyway.

Guys the adoption rates on new merchant POS devices is an S curve. As for adapting existing hardware, merchants tend to be VERY reluctant as the POS device typically links into inventory management or at a minimum the G/L.  Incidentally, the Europeans have been trying to get the Americans to adopt Smart Cards for almost a decade. They've kind of given up on the retail payments side, but it's my understanding that they are now pitching it as a medical records management solution.  Doubt it'll work there either, as the developing world is leapfrogging over smart cards to mobile (Smart cards are too expensive for both consumer and doctors/pharmacies/clinics/hospitals to implement.) As for working through the card processor, not very likely as you have to have a BIN to join the network. The big banks, Paypal, and new retail payments entrants like Google are using competing protocols to fight over share of wallet, and they typically look to devise solutions that erect barriers to entry (friction and fees)

Personally, I think a card based solution that leverages tradition POS technology is a mistake, as the entire systems is in flux; (thus crappy dongle technology like Isis and Square) and the merchants seem to be waiting on a dominant design to emerge before yet another upgrade to their POS hardware. As you know the banks are trying to shove NFT down the merchants' throats, haven't heard of any positive news un uptake rates beyond markets serving the top 1%.

I think solutions should be forward looking and with an eye toward creating some sort of universal adaptor should demand support the need for backwards integration.  My early sketches suggest that the cost structure of a "universal adaptor" would not be competitive, so how do you get the merchants to accept a more expense system with increased settlement risk (yes it's non reversible, but 10 mins is 9 min 50 seconds too long meaning you've got to build a middle office to hedge that risk) So to whom does one pass on costs in excess of the industry average 2.8%.

Don't mean to sound like a nay sayer, I think about this problem rather frequently, and I too find myself frustrated by the timing differences between the evolution of BTC, the lagging implementation of mobile money (the US is woefully behind, search "M-Pesa" 9MM users in 3 years), and the lack of vision and defensive genuflecting by the big banks when it comes to next generation retail payments solutions. 

I agree totally. However to expand BTC beyond computer-to-computer use we need a POS-system.

Given this, the nature of BTC and your argument the technology that exists IS smart cards.


I don't think a swipe card can be programmed unless it has the same chip as a smart card anyway - otherwise I would be with you there.

Paper BTC won't work as you would have to trust a million different printers who could have saved the private key they put on the coin.
(Even Casasciuos has admitted this flaw)


Smart cards work very much like swipe cards though; the ONLY exception is that you insert it instead of swiping - PIN, terminal etc. all looks and acts the same.

You ignore the returned checksum unless merchants start scamming people.


The cards cost 2$ a piece so you could practically hand them out.

The terminal could be a 10$ cable, a free app and your already-owned android phone. A total cost of maybe 110$ that even grandmas could pay to with their card.


All WE have to do is to order the cards, cable (I'm sure it exists), develop the chip program and the android terminal client.

Then we release all our code, suppliers, data and guides and anyone can sell programmed cards in their region and anyone can download the app/buy the cable.

EDIT:
EXACT supplies needed to turn my Android into a POS terminal:
http://www.amazon.com/USB-Type-Female-Adapter/dp/B000GHXTA0
(1.1$)

http://www.athena-scs.com/products-solutions/readers/contact
(Approx. pricing of above: 14$ - source: http://www.kinapriser.dk/konig-smart-card-reader-p-4695.html)

So... lets start programming?

I don't see any point in developing new hardware. Bitcoin is the most adaptable currency invented (I consider it the ninja currency) and should use whatever is already ubiquitous. Magstrip readers are plethera, barcode scanners too. I don't see many smart card scanners in America, though it's probably because I live in a rural area. I'm sure there are a lot of magstrip haters here, so I probably shouldn't have mentioned it. I'm sure many other countries are technologically way ahead on the smartcard trend to buy their bullet train tickets. I hate to be a pessimist, but I see the way most average Joes behave and they won't be using iPhones, smart cards, or any other new gadget any time soon in the retail environment. They will be using magstrips and paper. If Bitcoin cannot adapt to magstrips, paper, and sms, then it will require bucking the system. It's too expensive to try to educate the masses about new gadgets.

tl;dr  Bitcoin is the most adaptable currency and should use what is already ubiquitous, because it's too expensive to educate a market.

I had another idea:

Step 1: Create smart card reader that can be connected to an android phone via the standard plug.

Step 2: Create app using said cable connector to turn the phone into a POS terminal.


Now anyone with a sub 200$ android phone could become a merchant!