Topic: How To Issue A Paper Currency Backed By Bitcoin? (Read 313 times)
if you do that, bitcoin will become a centralized currency, just as regular paper-money, so why will you do that to kill the decentralization of Bitcoin in the first place?
Are we talking about a combination between centralized and decentralized, who is the authority you mean?
I think we cannot create paper currency from decentralized technology. let alone create a currency backed by bitcoin.
we can only create paper currency from centralized.
I think we cannot create paper currency from decentralized technology. let alone create a currency backed by bitcoin.
we can only create paper currency from centralized.
I think this no need because you can print paper wallets with preloaded 0.0001BTC.
Accepting a paper wallet from someone as payment is an even worse idea than OP's. It is trivially easy for the person paying you to have the private keys to the paper wallet also set up on a mobile wallet, for example. Within seconds of you scanning the wallet to ensure the funds are there, they could have transferred them out, leaving you with a worthless piece of paper. Or they could simply print the paper wallet multiple times and use the same wallet to pay multiple different people.
That's without even mentioning that you are trusting everyone who has ever held the paper wallet to have not done the same thing and the original creator to have securely created the paper wallet in the first place.
It’s called Casascius coins and it’s illegal (without expensive licenses).
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
“As of Nov 27, 2013, Mike Caldwell suspended sales of items that contain digital bitcoins. The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed him before, that minting physical bitcoins qualifies him as a money transmitter business, which means he needs to register at the federal level and probably get state licenses too.”
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
“As of Nov 27, 2013, Mike Caldwell suspended sales of items that contain digital bitcoins. The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed him before, that minting physical bitcoins qualifies him as a money transmitter business, which means he needs to register at the federal level and probably get state licenses too.”
And I assume the legal requirements are similar in other countries.
The main problem would be that governments in most countries, protect their own reserve Fiat currencies and once citizens starts to print their own private
I know some people in Asian countries try to circumvent these regulations by issuing tokens that can be redeemed for goods.
Let's say we had a bitcoin wallet with exactly 1.0 BTC in it. We wanted to use this 'reserve' to issue your own physical, paper currency.
This could come in the form of a bond or security. The necessary thing is that it must be tradable, counterfeit proof, and hold value.
If we printed a circulation of this paper currency, perhaps we could call it a note redeemable for bitcoin within the wallet at a fixed exchange rate.
1 Physical Note = 0.0001 BTC
It would seem that a signature from the private key of the reserve wallet would be required to produce a QR code which can be printed on the physical note. Each note must be signed cryptographically.
When the note is presented to the authority, it is redeemed from the bitcoin wallet to the customer?
How could such a system work?
This could come in the form of a bond or security. The necessary thing is that it must be tradable, counterfeit proof, and hold value.
If we printed a circulation of this paper currency, perhaps we could call it a note redeemable for bitcoin within the wallet at a fixed exchange rate.
1 Physical Note = 0.0001 BTC
It would seem that a signature from the private key of the reserve wallet would be required to produce a QR code which can be printed on the physical note. Each note must be signed cryptographically.
When the note is presented to the authority, it is redeemed from the bitcoin wallet to the customer?
How could such a system work?
Idea is interesting. Do you think this will be useful?
I think this no need because you can print paper wallets with preloaded 0.0001BTC.
As mentioned, this is a bad idea as it completely removes the decentralized nature of bitcoin and places complete trust in the single person or entity who guarantees the physical notes or coins.
The only benefit of this proposal that I can see is enhanced privacy. There would be no record of spending these coins on the blockchain, because no transactions had taken place. They would only become visible in the blockchain, as it were, when they were redeemed for bitcoin against the central wallet.
But with the existence of coins like Monero, which are both private and decentralized, then I'm afraid your proposal is meaningless.
The only benefit of this proposal that I can see is enhanced privacy. There would be no record of spending these coins on the blockchain, because no transactions had taken place. They would only become visible in the blockchain, as it were, when they were redeemed for bitcoin against the central wallet.
But with the existence of coins like Monero, which are both private and decentralized, then I'm afraid your proposal is meaningless.
It’s called Casascius coins and it’s illegal (without expensive licenses).
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
“As of Nov 27, 2013, Mike Caldwell suspended sales of items that contain digital bitcoins. The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed him before, that minting physical bitcoins qualifies him as a money transmitter business, which means he needs to register at the federal level and probably get state licenses too.”
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
“As of Nov 27, 2013, Mike Caldwell suspended sales of items that contain digital bitcoins. The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed him before, that minting physical bitcoins qualifies him as a money transmitter business, which means he needs to register at the federal level and probably get state licenses too.”
And I assume the legal requirements are similar in other countries.
Doesn’t matter, murrica owns the whole world. BTCe wasn’t in murrica but they were closed by murrica.
Bitcoin is digital currency and it is decentralized and peer to peer network. If we introduce it in a paper currency it won't be decentralized. So the idea may good but it decreases bitcoin popularity.
The idea is to have a physical currency that is also redeemable for bitcoin. The physical aspect of it would require a centralized issuer.
we get the idea, it is just that it is not a good one.
the whole point of bitcoin is to be decentralized and not need you to trust any third party. what you are proposing is centralizing the whole thing which means you are simply ruining one of the main reasons why bitcoin even exists!
Bitcoin is digital currency and it is decentralized and peer to peer network. If we introduce it in a paper currency it won't be decentralized. So the idea may good but it decreases bitcoin popularity.
The idea is to have a physical currency that is also redeemable for bitcoin. The physical aspect of it would require a centralized issuer.
It’s called Casascius coins and it’s illegal (without expensive licenses).
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
“As of Nov 27, 2013, Mike Caldwell suspended sales of items that contain digital bitcoins. The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed him before, that minting physical bitcoins qualifies him as a money transmitter business, which means he needs to register at the federal level and probably get state licenses too.”
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
“As of Nov 27, 2013, Mike Caldwell suspended sales of items that contain digital bitcoins. The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed him before, that minting physical bitcoins qualifies him as a money transmitter business, which means he needs to register at the federal level and probably get state licenses too.”
And I assume the legal requirements are similar in other countries.
Go backwards again to use Paper Currency？
Completely redundant thoughts. If you just want to carry your bitcoin wallet, then the paper currency we use now have this feature fully and don't need to print.
And now we can use portable Internet tools such as mobile phones in almost any corner of the world, which is much more convenient than a paper currency.
Completely redundant thoughts. If you just want to carry your bitcoin wallet, then the paper currency we use now have this feature fully and don't need to print.
And now we can use portable Internet tools such as mobile phones in almost any corner of the world, which is much more convenient than a paper currency.
It’s called Casascius coins and it’s illegal (without expensive licenses).
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
“As of Nov 27, 2013, Mike Caldwell suspended sales of items that contain digital bitcoins. The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed him before, that minting physical bitcoins qualifies him as a money transmitter business, which means he needs to register at the federal level and probably get state licenses too.”
https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
“As of Nov 27, 2013, Mike Caldwell suspended sales of items that contain digital bitcoins. The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, informed him before, that minting physical bitcoins qualifies him as a money transmitter business, which means he needs to register at the federal level and probably get state licenses too.”
A project of interest others may consult on physical bitcoin notes: http://www.bitnotes.org/
Quote from: Paleus link=topic=5067124.msg47780957#msg47780957
The authority presents their public key, prints a cryptographically signed message on each note in the form of a QR code, and promises that it will be redeemable for 0.0001 BTC?
How would it be redeemed? Is a fixed exchange rate necessary? Why not print the private key on the note itself? If the paper currency is directly redeemable for 0.0001 BTC, than why not simply use bitcoin itself?
1.Through The Bitcoin Note Issuer.How would it be redeemed? Is a fixed exchange rate necessary? Why not print the private key on the note itself? If the paper currency is directly redeemable for 0.0001 BTC, than why not simply use bitcoin itself?
2.Yes It Necessary,To Ease The Transaction.
3.It Would Make The Paper Note Single-Use,Unless Somehow You Can Make A Change Between Redeemed And Unredeemed Note.(Maybe You Can Copy The Gift Card Mechanism)
4.For Offline Transaction.
The main purpose for printing it on a physical paper note would be for offline transactions. We do not want to require everyone to carry around with them a mobile wallet. Therefore a physical, paper currency could work.
Eventually however, the ledger held by the issuing authority would need to verify their balances into the blockchain for the public to see. This could be done by embedding the data of the ledger into the blockchain (or even coinbase). The formatting would be in a manner that takes advantage of compression and also possibly in an encrypted manner that is revealed only to those who hold the necessary decypher key.
Quote from: Paleus link=topic=5067124.msg47780957#msg47780957
The authority presents their public key, prints a cryptographically signed message on each note in the form of a QR code, and promises that it will be redeemable for 0.0001 BTC?
How would it be redeemed? Is a fixed exchange rate necessary? Why not print the private key on the note itself? If the paper currency is directly redeemable for 0.0001 BTC, than why not simply use bitcoin itself?
1.Through The Bitcoin Note Issuer.How would it be redeemed? Is a fixed exchange rate necessary? Why not print the private key on the note itself? If the paper currency is directly redeemable for 0.0001 BTC, than why not simply use bitcoin itself?
2.Yes It Necessary,To Ease The Transaction.
3.It Would Make The Paper Note Single-Use,Unless Somehow You Can Make A Change Between Redeemed And Unredeemed Note.(Maybe You Can Copy The Gift Card Mechanism)
4.For Offline Transaction.
Why would anybody want it printed?
Unless you hate tree's or like making things more difficult than they need to be, it sounds like a bad idea.
Unless you hate tree's or like making things more difficult than they need to be, it sounds like a bad idea.
Let's say we had a bitcoin wallet with exactly 1.0 BTC in it. We wanted to use this 'reserve' to issue your own physical, paper currency.
Then the initial idea of "a decentralized cryptocurrency" would loose meaning. I mean would you prefer using Paper backed BTC? You would still have to redeem to fiat currency... right?it makes no sense to me at all. I think it would be much better to leave bitcoin as it is otherwise it would even cause more clashes with the Government
You can do as you described - provide a cryptographic signature on every banknote to somehow prove that the banknote is backed, but what's the point really? It all boils down to a centralized entity that holds the coins and exchanges them on demand, so you can skip the signature part and just issue paper notes and provide proof separately to auditors or the public by showing your cold wallet addresses and signing some message.
The authority presents their public key, prints a cryptographically signed message on each note in the form of a QR code, and promises that it will be redeemable for 0.0001 BTC?
How would it be redeemed? Is a fixed exchange rate necessary? Why not print the private key on the note itself? If the paper currency is directly redeemable for 0.0001 BTC, than why not simply use bitcoin itself?
There will always be problems, for example this entity can just print more notes than they have backed and there's nothing we can do about it. So, we'd have to trust that they are not doing anything shady.
Printing private key is a bad idea because then banknotes will be single-use only.
As to why not use Bitcoin directly, that's a question that you should answer because you opened this thread with a question how to create a paper currency backed by Bitcoin.
You can do as you described - provide a cryptographic signature on every banknote to somehow prove that the banknote is backed, but what's the point really? It all boils down to a centralized entity that holds the coins and exchanges them on demand, so you can skip the signature part and just issue paper notes and provide proof separately to auditors or the public by showing your cold wallet addresses and signing some message.
The authority presents their public key, prints a cryptographically signed message on each note in the form of a QR code, and promises that it will be redeemable for 0.0001 BTC?
How would it be redeemed? Is a fixed exchange rate necessary? Why not print the private key on the note itself? If the paper currency is directly redeemable for 0.0001 BTC, than why not simply use bitcoin itself?
You can do as you described - provide a cryptographic signature on every banknote to somehow prove that the banknote is backed, but what's the point really? It all boils down to a centralized entity that holds the coins and exchanges them on demand, so you can skip the signature part and just issue paper notes and provide proof separately to auditors or the public by showing your cold wallet addresses and signing some message.
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