Paper bitcoins (bitnotes). Is it worth it? - page 5.

deisik

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Quote from: freshman777 on December 12, 2016, 02:58:24 AM

It may be not a bad idea to solve the problem of scaling Bitcoin. I don't see much harm in banks abusing this and issuing more "bitnotes" than bitcoins they have in reserves. If bearers of bitnotes can no longer redeem notes as advertised, that particular bank will go bankrupt and be purged from the economy. There is no central bank to bail it out that can quantitatively ease to infinity. The damage will be limited unless the inflationary settings of Bitcoin itself change

I think that you are sarcastic

If banks start defaulting on their bitnotes (I will use this term to avoid confusion with paper wallets), they will be scamming on people just like any other Bitcoin scams out there. To say that it wouldn't hurt Bitcoin is basically equal to saying that scams don't hurt Bitcoin either, which is obviously very far from truth. People even tend to blame Bitcoin itself for facilitating the spread of such fraudulent schemes

Quote from: CyberKuro on December 12, 2016, 04:35:28 AM

Yeah, it seems impossible and not realistic right now but maybe in the future there is someone or a bank that makes it come true, we don't know yet how technology lead us, an innovation is always needed. There are a lot of homework to do if paper bitcoin will issues, the most important is about security of private key and forgery such as others had mentioned.

The issues you are talking about are not very different from the ones faced by any web wallet. In fact, they are pretty much the same

CyberKuro

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Quote from: OnkelPaul on December 11, 2016, 10:55:26 AM

Quote from: deisik on December 11, 2016, 10:41:32 AM

Quote from: OnkelPaul on December 11, 2016, 10:33:21 AM

It does not make a lot of sense

It would make sense if there is no more fiat around, and Bitcoin is accepted as a universal means of payment

That's a big IF

Quote from: deisik on December 11, 2016, 10:41:32 AM

If Bitcoin banks aren't going to abuse the system of paper bitcoins...

That's an even bigger IF

Yeah, it seems impossible and not realistic right now but maybe in the future there is someone or a bank that makes it come true, we don't know yet how technology lead us, an innovation is always needed. There are a lot of homework to do if paper bitcoin will issues, the most important is about security of private key and forgery such as others had mentioned.

deisik

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Quote from: Przemax on December 12, 2016, 02:42:10 AM

All of the future options of the bitcoin, like long, shorts and leveraged position are in a sense a paper bitcoin that exists only as a fiction on the exchange. So we already have such an assets in the bitcoin world, im sorry to say.

You have nothing to apologize for

The emergence of Bitcoin leverage was predetermined, in a sense. It was just a matter of time and Bitcoin adoption. Strictly speaking, we are not quite there yet. When true derivatives of Bitcoin such as futures, options and swaps show up in massive amounts, only then could we say that Bitcoin became a full-fledged financial asset, ready for mass adoption by crowds of professional speculators. Until then, it is only a fancy toy of wannabe traders and die-hard Bitcoin enthusiasts

freshman777

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It may be not a bad idea to solve the problem of scaling Bitcoin. I don't see much harm in banks abusing this and issuing more "bitnotes" than bitcoins they have in reserves. If bearers of bitnotes can no longer redeem notes as advertised, that particular bank will go bankrupt and be purged from the economy. There is no central bank to bail it out that can quantitatively ease to infinity. The damage will be limited unless the inflationary settings of Bitcoin itself change.

This is not a bad solution to the scaling problem, but Bitcoin has other problems - I still think Bitcoin is only a pilot project and will lose substantial market share with time.

Przemax

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All of the future options of the bitcoin, like long, shorts and leveraged position are in a sense a paper bitcoin that exists only as a fiction on the exchange. So we already have such an assets in the bitcoin world, im sorry to say.

deisik

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Quote from: pitham1 on December 12, 2016, 12:06:05 AM

Quote from: deisik on December 11, 2016, 08:40:31 AM

It is an established fact that bitcoins aren't very useful for offline transactions (even if you could use, for example, OpenDime devices for making such transactions). If Bitcoin banks are allowed, they would most certainly start issuing Bitcoin certificates (let's call them paper bitcoins), like many banks did in the 19th century with gold. These certificates could easily serve as paper money of sorts and thus solve the issue with offline transactions. The main problem with this approach is that banks might start (and most likely will) issue more paper bitcoins than the amount of real bitcoins in their wallet. So this raises two questions. Namely, if it is possible to prevent Bitcoin banks from issuing paper bitcoins altogether once they get allowed and start popping up here and there, and if there is a way to make these banks to limit the amount of paper bitcoins so it would match the amount of real bitcoins they have...

I think we might eventually have to face these issues, especially if Bitcoin gets more traction in the future

If you extend the traditional banking model to banks, they would just lend out the bitcoins that you deposit in them.
The bitcoins deposited will be in an account balance, tagged to you. We are not in age of bearer deposits any more.

Things may change in the future

We are no longer in the age of bearer deposits simply because fiat makes such deposits irrelevant. Today banks don't need to issue paper money at all (Central Bank does that), but they still issue an unlimited amount of debt (not quite unlimited in fact since it is evidently limited by the number of people willing to borrow), which could be loosely considered as basically the same bearer deposit notes in disguise. But Bitcoin is not fiat, it can't be issued conditionally arbitrary

pitham1

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Quote from: deisik on December 11, 2016, 08:40:31 AM

It is an established fact that bitcoins aren't very useful for offline transactions (even if you could use, for example, OpenDime devices for making such transactions). If Bitcoin banks are allowed, they would most certainly start issuing Bitcoin certificates (let's call them paper bitcoins), like many banks did in the 19th century with gold. These certificates could easily serve as paper money of sorts and thus solve the issue with offline transactions. The main problem with this approach is that banks might start (and most likely will) issue more paper bitcoins than the amount of real bitcoins in their wallet. So this raises two questions. Namely, if it is possible to prevent Bitcoin banks from issuing paper bitcoins altogether once they get allowed and start popping up here and there, and if there is a way to make these banks to limit the amount of paper bitcoins so it would match the amount of real bitcoins they have...

I think we might eventually have to face these issues, especially if Bitcoin gets more traction in the future

If you extend the traditional banking model to banks, they would just lend out the bitcoins that you deposit in them.
The bitcoins deposited will be in an account balance, tagged to you. We are not in age of bearer deposits any more.

deisik

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Quote from: OnkelPaul on December 11, 2016, 12:39:01 PM

If the paper notes contain a bitcoin address where the denoted amount is held, they could be checked occasionally while a merchant holds them who is online. That still leaves the problem that separate paper notes could contain the same bitcoin address, either because the bank cheats and prints several notes with the same address, or because a counterfeiter creates a fake note with the same address.

Onkel Paul

Let's assume that the banks don't actually want to fiddle with the amount of paper bitcoins issued. Banks understand that Bitcoin people won't trust them and their promissory notes at all unless they can offer an easy and reliable method of checking whether the amount of paper bitcoins actually matches the amount of real bitcoins. Indeed, banks wouldn't be particularly interested in disclosing information about how wealthy they are, but, on the other hand, all we need to know is whether these amounts match, not so much the amounts themselves...

Assuming benevolence and integrity of the banks, what could they do to prove their adherence to these qualities?

OnkelPaul

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If the paper notes contain a bitcoin address where the denoted amount is held, they could be checked occasionally while a merchant holds them who is online. That still leaves the problem that separate paper notes could contain the same bitcoin address, either because the bank cheats and prints several notes with the same address, or because a counterfeiter creates a fake note with the same address.

Onkel Paul

deisik

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Quote from: n0ne on December 11, 2016, 11:54:40 AM

Quote from: ~Bitcoin~ on December 11, 2016, 11:20:28 AM

Like gold bitcoin are not subject to risk of loss or getting theft so why would anybody like to store their bitcoin in banks vault?
Also there will be nothing that can stop banks from issuing more certificates than the actual amount of bitcoin they have in their wallets.

Better solution for offline transaction could be bitcoin paper wallet rather than those certificates. However your idea seems quite complicated and even harder to implement.

Paper bitcoin use looks to be a better option for common people to start using bitcoin similar to traditional currency, but accessing is possible only with the help of paper wallets. So I too think it's hard to implement right now as described by the above mate.

Paper bitcoins have nothing to do with paper wallets apart from having the word "paper" as a characteristic of them (which is different in each case, anyway). The concept of paper bitcoins may be hard to understand, but it is trivial to implement. Many people are implementing this concept themselves when they borrow or lend money to their friends or other people. Paper bitcoins (or Bitcoin certificates) are basically a document used to acknowledge that someone (bank) owes money to the bearer of them...

In this case, this sum of money will be a certain amount of bitcoins

miffman

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You mentioned preventing banks from issuing paper bitcoins. I don't see a problem with it as long as it isn't an IOU, and that paper/device was trustless like OpenDime.

n0ne

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Quote from: ~Bitcoin~ on December 11, 2016, 11:20:28 AM

Like gold bitcoin are not subject to risk of loss or getting theft so why would anybody like to store their bitcoin in banks vault?
Also there will be nothing that can stop banks from issuing more certificates than the actual amount of bitcoin they have in their wallets.

Better solution for offline transaction could be bitcoin paper wallet rather than those certificates. However your idea seems quite complicated and even harder to implement.

Paper bitcoin use looks to be a better option for common people to start using bitcoin similar to traditional currency, but accessing is possible only with the help of paper wallets. So I too think it's hard to implement right now as described by the above mate.

deisik

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Quote from: OnkelPaul on December 11, 2016, 10:55:26 AM

Quote from: deisik on December 11, 2016, 10:41:32 AM

Quote from: OnkelPaul on December 11, 2016, 10:33:21 AM

It does not make a lot of sense

It would make sense if there is no more fiat around, and Bitcoin is accepted as a universal means of payment

That's a big IF

If wishes were horses beggars might ride

Quote from: OnkelPaul on December 11, 2016, 10:55:26 AM

Let's consider this scenario. Assume that there is no fiat money around, and people use bitcoin everywhere. Additionally assume that because of the inconvenience of being online all the time (hey, how do those poor folks live without facebook?), people resort to paper bitcoins. As banks see that printing paper bitcoins is a lot easier than mining real bitcoins, they just print some more when they need more money. As long as all the paper bitcoins stay in circulation and are used to pay for goods or services, nobody will complain. Only when someone does the math and realizes that there are many more than 21 million paper bitcoins in circulation, they will realize that one paper bitcoin is not worth a true bitcoin anymore

I'm well familiar with that

And that was precisely the point of my second question. Namely, if we can't prevent Bitcoin banks from issuing paper bitcoins altogether (which they will certainly start to issue provided they become interested in Bitcoin somehow in the first place), is there a way to make them not issue more paper bitcoins than they actually have in their wallets? Quite naturally, the banks would claim that they will follow this requirement, but talk is cheap, and they would have to prove their claims in some way. So, which is the best way?

PokemonFun

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No I dont think that it will happent because bitcoin isnt only crpto currency in this online currency world and many laws will denied bitcoin and create own country crypto currency so maybe bitcoin will not be on 1 place anymore.

~Bitcoin~

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Like gold bitcoin are not subject to risk of loss or getting theft so why would anybody like to store their bitcoin in banks vault?
Also there will be nothing that can stop banks from issuing more certificates than the actual amount of bitcoin they have in their wallets.

Better solution for offline transaction could be bitcoin paper wallet rather than those certificates. However your idea seems quite complicated and even harder to implement.

FaucetRank.com

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Issuing more paper money than original holding of Bitcoin is illogical because if a bank 1000 bitcoin they can not issue 2000 paper bitcoin because if I go to bank and ask to give me my 2000 bitcoin and take your 2000 paper bitcoin than Banks will not be able to give me 2000 Bitcoin because they actually do not own that number of bitcoin in my account.

calkob

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Would anyone seriously trust a paper bitcoin, the very fact that they are using bitcoin would open them up to the idea of securing their own keys. this is why i think that would never happen.

K~Ehleyr

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Ooh, shiny things!!

What is this strange word "offline"? Tongue

In just a few years there will be no "offline" at all, making the term "offline transactions" completely meaningless. The future is connected, so all we have to worry about is making connected/online transactions quicker and more convenient. There's no point planning around scenarios that will soon be obsolete.

deisik

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Quote from: stark101 on December 11, 2016, 10:46:53 AM

Paper bitcoins? is the same for paper wallet? well,
One of the most popular options for keeping your bitcoins safe is something called a paper wallet. But is this trustworthy and safe? In my opinion, a wallet is said to be safe and trustworthy if this wallet has very strict security precautions.

No, paper bitcoins have nothing to do with paper wallets

But the terminology can be misguiding, that's true. Think of paper bitcoins as of paper money, i.e. pieces of paper that you can squeeze in your hand and which can be used as money for direct exchange of goods. In any case, paper wallets is not the topic of this thread and not related to it, so I ask everyone in advance to refrain from discussing them here

OnkelPaul

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Quote from: deisik on December 11, 2016, 10:41:32 AM

Quote from: OnkelPaul on December 11, 2016, 10:33:21 AM

It does not make a lot of sense

It would make sense if there is no more fiat around, and Bitcoin is accepted as a universal means of payment

That's a big IF

Quote from: deisik on December 11, 2016, 10:41:32 AM

If Bitcoin banks aren't going to abuse the system of paper bitcoins...

That's an even bigger IF

Let's consider this scenario. Assume that there is no fiat money around, and people use bitcoin everywhere. Additionally assume that because of the inconvenience of being online all the time (hey, how do those poor folks live without facebook?), people resort to paper bitcoins. As banks see that printing paper bitcoins is a lot easier than mining real bitcoins, they just print some more when they need more money. As long as all the paper bitcoins stay in circulation and are used to pay for goods or services, nobody will complain. Only when someone does the math and realizes that there are many more than 21 million paper bitcoins in circulation, they will realize that one paper bitcoin is not worth a true bitcoin anymore.

This has happened a number of times in history, there's no reason to assume that it would not happen again. People are greedy.

Onkel Paul

Topic: Paper bitcoins (bitnotes). Is it worth it? - page 5. (Read 3837 times)