If there's an interest in "community holograms", I would be willing to take up a collection and spearhead an order with the label production company and basically do the following:
That certainly would make it cheaper to alternatives to startup but SHOULD it be cheaper/easier to get into the physical Bitcoin biz?
I mean lets take you for an example. You "could" rip people off by making copies of private keys and stealing funds however you have already sunk a lot of money into the project. Couple thousand for custom designed hologram, couple thousand more in runs of the holograms (now on 2nd version), thousands more in physical coins plus the time, energy, and effort put into it.
So while when I buy a coin from you it is possible you "could" rip me off I don't think you will. If the barrier to entry is lower doesn't that lower the implicit trust in the "issuer"? In essence they have less skin in the game, less to risk if they decide to run a scam.
Sadly Bitcoin is full of scams, theives, and idiots who will trade their reputation for a quick hundred bucks (or less). So far the only two significant physical bitcoin operators (you & BitBill) have be legit. Look at the track record for exchanges, wallets, etc and that in itself is pretty amazing.
Cheaper to startup means that it will also be cheaper to sell, and push margins way down. So a physical bitcoin might cost a small percentage above actual bitcoin value. This would be a wonderful thing as it would be equivalent to getting cash from an ATM.
Legitimacy is an issue, and questions of how to determine how much a vender can be trusted is difficult. I don't know if the cost to a new custom hologram would deter a scammer. That might just be considered an investment in a large scale scam.
I will be releasing some code on github which will create pdfs easily that output QR codes on double sided slips for behind holograms, and this will make it at least an effort to get the private keys in mass for what you are printing.
In the end, anyone producing physical bitcoins could be a scammer. I trust Mike as much as I could trust someone I have never met, and know only through the internet. That said, he could have been storing the private keys all along and just waiting for the key moment to swipe the many thousands of bitcoins that reside on all those coins.
How do we deal with this situation (outside of not producing physical bitcoins)?
I think the one way would be the multiple private key & public key combined bills which would require multiple producers to collude to steal from users. Since no single operator would be able to have access to the coins, this does a lot to resolve the situation.
If the algorithm can be found for 3 or more operators, I would probably trust it more than most other things.
By lowering this barrier to entry, this will bring more producers to the market, and this will reduce the costs that would be needed for this type of protection. Eventually you will never see single private key physical bitcoins, and double private keys will be the standard.
Lowering the barrier and getting more producers is the first important step in this process.