Topic: Physical bitcoins, take 4 (Read 10877 times)

I plan on starting a digital voucher system backed by bitcoins
suitable for both online and offline usage in the very near future.

+1
Just print a private key as a "redeem code" and use the public key as the address where to send the coins. Simple and easy yet elegant.
Would be perfect if dialogs (generate/print private key and redeem) were added to the official client.
See also https://bitcointalksearch.org/topic/bitcoin-bounty-website-35905
Once there is a bounty site we can create/join such a proposal. Hopefully we can convince the devs to add this.

problem with any central bank issuing paper bitcoins is the trust that the bank is actually securely deleting/forgetting the private keys when they issue you currency.  For this to work there would have to be trust, beyond that it's easy for anyone to print a private key on a piece of paper.  In fact, I gave a friend of mine a bitcoin on paper exactly this way (here)...

Not sure why this thread was necroed btw...

Will

 

They sent me samples of security paper.

I am still thinking of printing paper bitcoin.....   But simply......    Public and Private Key Pairs.... on paper.....   for offline Bitcoin dry storage.

So Bruce, did you ever get those samples? Were they samples of bitcoin notes or only of the paper they might be printed on?

Nothing wrong with the post, I just don't see much to respond to in it. There will be some vulnerabilities with paper notes, just like there are with, say, checks---but most people decide that the convenience makes up for the risk.

Is anyone planning on buying or selling wares for bitcoins at the conference in August? If so, I have some ideas for a sort of "clearing house" that would make this easier.

Anything wrong in my post?
suddenly everyone silent.

The moment Bitcoin gets physical, it will become vulnerable. Any physical form needs some one to create & it is HARDWARE.
Satoshi Nakamoto, now Gavin working on SOFTWARE. Since software, he create & then everyone copies it.
Hardware or physical has to be created every single piece. Then some one will have to create & that some one WILL CONTROL.
So far, the trust worthy person in bitcoin is Gavin & he can't create any physical form of bitcoin ALONE.
If he adds friends/trust people with himself to create physical, there is NO guarantee that friends/trust people will be always trusty.
If they take control from Gavin then bitcoin will be ruled by some one, like bank, not by people.

Bitcoins are already physical in the sense that wallet.dat is vulnerable to loss or theft.

The technology of the  bit coin system is in place already ! To be secure against counterfeiting,and inflation by the fed,it cant be taxed and you don't have to tust anyone that you do not know because it must be genuine to be in the system..  To make bit coins in to something physical to be spent in any shop is the same as taking your bitcoins out of the  secure system and converting them into cash or converting them onto your credit card.
that system is already in place !

The only problem with that side of the system in the outside world is that it is controlled by the banksters and not the bit coin community ( the people )

The the only useful purpose  physical bit coin could have, would be to  introduce others and get them to use it.   Use it directly with other bitcoin users going around the banksters controlled system that we have.

if a local store owner accepts it a payment he will not need to use the visa /matercard reader to take payment, therefore avoiding the outrages charges of the banks,....  is this not the point of bit coin ?

 Having a fair and just system .. money for the people controlled by the people .?

what bruce was saying about keeping it simple.... , like writing a simple i owe you works , but a fancy printed iou used as an advertizing tool for bit coin could be much better.

They should be considered to have no value once outside the system, the only value they should have in them is what you personaly attach to it when you hand it over.
For example:

  here is a token or note that i owe you a certain value... introduce the person to this new system.
     Once they are on the system you keep your promise and pay in any currency you like on any system they choose.. hopefully bitcoin and become another member of the community.

when the people accept bit coin as payment, control of the system by banksters will start to weaken and slip while the bitcoin community grows stronger and develops their own  technology to create there own bit coin readers at point of sale.

It,s all about who has control, the many or the few !.

I think that whatever physical systems of bitcoin that are developed, they should all bear this in mind.
 as whoever controls the system control's you.

those in control would love to see us all paying with bitcoin if they still have control of the charges you will incur every time you use your card or phone to buy anything. They are probably pushing for this also.. what a great one world currency !

You think it - you build it - you maintain it - they sell it - you lose !


     

True...
Very interesting.
Well, the samples should be arriving here via FedEx within about 4 hours....
I'll let you know....

PS - "The Bitcoin Show" is now available on OnlyOneTV.com | global television network http://goo.gl/wBdBi

Limited edition high quality printings may well continue to have numismatic value even after the BTC represented are redeemed.

Just think of first edition superman comics .... first ever anything that does not die out only gains in value, enhanced by rarity over time. It's all money in the end.

In the end everyone is used to spend money with plastic cards. Implementing Bitcoin on top of a smartcard should be possible. Just put the key pair on it and implement a signing action. You'd have to trust the card reader to display the correct amount they will take from the card ... but hey ... you do this today and all the time.

Just for the record...

My concept would NOT involve Bitcoin keys at all.  It would simply involve a paper currency on high-security paper (or similar material) with lots of anti-counterfeiting security built-in --- very similar to the drivers license in your wallet.... or the vehicle registration in your glove box.... or the state ID card...  or the dollar bill in your wallet.

It would have a serial number, but no Bitcoin data.    It would be denominated in Bitcoin, and it would be backed 100% by Bitcoin.    But it would require NO computer or electronics at all.    It could be passed hand to hand...   and redeemed at any time for real Bitcoin....  by the issuer.

Obviously, this would only work with a "trusted issuer".

However, depending on who the issuer is....  I think I'd rather trust ONE single "trusted issuer"...  than trust every person who handles the paper.

With this simple system, there's no way of defrauding it ---- except through counterfeiting.   This drastically reduces the risk.   It also moves more of the risk over to the issuer.

With high security forms of printing, etching, etc., etc. in use today (just look closely at your passport), the risk of counterfeiting can be reduced to almost nothing.   Especially when combined with a reasonable expiration date..... and low denominations....   and the fact that most of this currency would remain within the Bitcoin-promoting community.   It won't be very widespread use.    The potential profit a counterfeiter could make would be so small that it wouldn't really be worth his time.   It would be like breaking in to your house to steal a donut and a glass of milk.

[ Alternatively, they could be made for single-use.... like Travelers Checks.   The purchaser could buy one, sign it on one line.   Then, when paying someone, he could sign it again on another line.   The unique code number could even be "called in" over the telephone to verify it's validity... and to verify that it has not been used before (much like a Groupon coupon).   You can print as many copies of a Groupon coupon as you want, but the unique code on it can only be used ONCE.   After it has been used, it is void from then on, and it's payable only to the first claimant.    With such a system, the code numbers on the "coupon" must be kept secret (like a password), and they can only be used for one transaction, and with this method... there's now the added overhead of a "call center" infrastructure... needed to give verifications. ]

I still think the best way is the simplest.    A paper "receipt" for 1 Bitcoin or 10 Bitcoins or 20 Bitcoins.....  simply backed for its face value by the trusted issuer....  and that's it.

I guess the problem is...   After being burned by so many central banks throughout history...  Do we trust ANYONE with that control?

As for the hidden private key forms of a currency, I think there are several in development already...  So I have no doubt that that concept will be readily available soon.

I'd like to see the "paper currency" that operates independently of the Bitcoin network, yet is backed 100% by Bitcoin.... become available as an option too.   Not everyone in the world has a computer.   And even among those that do, not everyone understands the first thing about a "private key" or a "block chain"... much less how to verify the ownership of specific Bitcoins based on that data.   I don't even know how to do that.    I'm looking for an alternative that would also work for the common man on the street, who may not even have a computer or a smartphone....  But he may wanna "buy some Bitcoins" because he heard that the price is going up!    .....or whatever.

Unless there was some security built into the paper system, I would never accept it, *except* if I was accepting it from the (trusted) issuer.  Even if my most excellent trusted friend tried to give me one, I wouldn't accept it because, even though he's acting in good faith, the note might have already been cashed in (or copied, whatever) by some nasty previous holder.  Also, I wouldn't accept a token that couldn't be automatically redeemed - otherwise the other party to my transaction could give me the token, I'd check the (visible) address to see that it was still valuable, but then the other party could redeem it, from a copy, after 10 minutes.  I'd want to secure the funds in my own wallet immediately - for me, that's what the transaction is: putting funds into my wallet.

The token must be visibly destroyed for redemption.  But you can always check that the coins haven't been spent by checking the visible address against the blockchain.  So any attacker only has time to cheat you from the moment you accept the token to the time you try to redeem it.  This time should be made as short as possible, therefore, automatically redeemable tokens, NOT requiring you to return them to the issuer.

I like the idea of physical Bitcoins, but I think paper isn't going to be very feasible. No matter what system you come up with to try to secure the keys, someone will find a way around it. It is like DRM in a sense: you're trying to stop "the bad guy" from copying information (the private key), while still letting "the good guy" access it. Difference is instead of "the bad guy" being someone who wants to copy music they paid for, it's someone who wants to copy a key before passing now-useless cash on to some poor sap.
Never underestimate the resources, smarts, and time crooks have to dedicate to their work, especially when it involves essentially stealing money (from the sucker they pass the bill to after copying it). There are a few of us and thousands of them who'd love to be able to give themselves free money.
That's not to say I don't think we should even consider some kind of physical/printed currency. I just don't think it'll be as simple to prevent fraud as some seem to think.

What I think would be more feasible and useful is using SD cards and USB sticks as coins and wallets. These days you can get 32GB of each for under $100. For use as coins you'd want not one large card but many small ones (even 1MB should be plenty) - probably everyone has a few laying around, and for such small sizes I'd imagine they'd cost only a few cents each.

For coins, you'd put a private key (or a few) on a card and hand it out. To redeem the coin you put it into your PC and copy the key into your client. SD cards are roughly the size of a coin and just about everyone has a reader for them (and if not they're cheap and have many uses) so this works nicely. MicroSD is a bit small (easily lost) but has some advantages like being usable in modern phones; keeping them in the plastic case they come in could help with the size issue.

For wallets, you'd put a few coins into a wallet file stored on a USB stick. You could hand those out too (like "bills", being physically larger than SD cards) or use them like a bank card - put the stick in, transfer a few coins.

Advantages of this are that you'd be using ordinary SD cards and USB sticks, that are too small in capacity to be of much other use, can be "refilled", and can hold other data besides just the coins. So you could include some notes or media with a payment. For example when paying your bills, just send in a card/stick containing the balance and a text file holding your account number. (Granted if you can pay bills in bitcoins, you'd probably do so over the Internet, but anyway...)

Obvious problems:
1) People can still easily copy the coins and then hand them out again.
2) A merchant can copy your entire wallet when you put the USB stick in to pay.
3) While small-capacity cards would presumably be cheap, nobody sells them anymore.
4) Being given an SD card or USB stick, you have no way to know if it even has any coins on it.

#3 I think is the big thing here. While you can walk into your favourite overpriced electronics store and buy a 32GB card for not much, you can't buy 32768 1MB cards at all. Nobody makes 1MB cards anymore.
What you'd have to do is start up a small business selling small cards/sticks for just this purpose. I imagine you could convince a manufacturer in Asia to make you a few thousand small ones for not too much, which could even be stamped with the Bitcoin logo. You earn back the cost by starting up an exchange; someone sends you some amount of money (plus a few cents to cover the cost of the card and postage), you send back a card with that amount on it.

Now, if you already have these cards being manufactured for you, you can go on to add some security features. Say, reading the card destroys it, or the card comes encased in something similar to their plastic cases which must be destroyed to get at the card itself (so you know a card not in such a case is no longer valid). Those ideas kill reusability, but I'm not coming up with any ideas that don't. Ultimately they'd be more like checks than coins, and nothing stops someone from writing you a bum check either.

For "wallet" USB sticks, the most secure thing to do would just be to keep only a little in it at a time, so that anyone who copies it won't get much. Of course that isn't very convenient. What you might have is a stick that unfolds to expose a simple numeric display and keypad, where you type in a balance, then press OK, and it allows only that much to be taken out. One way to do this would be to make "change" - store several keys worth 0.5BTC, 1BTC, 5BTC, etc, and it passes on to the reader only enough keys to make that balance (rounding up if necessary), just like you'd give a cashier only enough coins to make the balance (but if you don't have any pennies maybe giving a nickel to cover the last 3 cents).
Having such intelligence in the stick itself would of course increase its cost, but you'd only need one - you wouldn't be handing these out to people like you would with coins; they'd function more like a bank card.
You could eliminate the need for a lot of complexity in the design by just having it emulate an ordinary removable disk, with one partition where you can store files like any ordinary disk, and one reserved for the coin keys. When you hit OK, the appropriate keys are readable from the raw partition (no filesystem) and removed from memory on read. Writing a program to handle this on a PC would be dead simple. The device could also be powered by the USB port itself, reducing a lot of physical complexity.


I think no matter what you do, it's going to be somewhere between difficult and impossible to make physical bitcoins that don't carry the risk that they've already been digitally spent (or if you use SD cards, that they don't actually contain coins at all). It boils down to being given an object which is said to have value, but which becomes worthless through an action that can be done without physical access to the object. You have to trust that they won't do that, because there's really not much you can do to prevent it. I also think the future of Bitcoin for in-person transactions is in smartphone apps, not distributable tokens. But if you could make tokens and smart USB sticks work, that'd be pretty damn cool.

I'll be doing something like that for the event I'm planning next week (See: https://bitcointalksearch.org/topic/donations-needed-for-promotional-purposes-at-a-major-university-6202)

I'm trying to count how many people I know who carry around an RFID reader....  

These ideas are great...  Very creative...  And very technical....

I was looking for a much simpler idea though.   Like a simple handwritten IOU.    ....backed by Bitcoin.

Paper is fine.   With an expiration date, and small denominations...., so that it's not practical, nor profitable enough, to interest counterfeiters.

As I said, I don't see such a form of "currency" being used in commerce really.   I see it used at cocktail parties and brunches...  where, when the topic of Bitcoin comes up, a person can pull one out of his wallet..... and say, "Here... Let me pay for lunch.  This is a 20 Bitcoin note."

.....and the note itself would contain printed instructions on how to redeem it.... including the web site to go to to learn all the details about Bitcoin.

.....thus being a convenient way to gift a few Bitcoins to someone... at the same time as you are informing them about what Bitcoin is.

Like a simple Bitcoin "business card"... that happens to have real value built-in to it.

Each printed batch could expire after 1 year, or 3 years, or 5 years (which would make sense?)...   Prominently on the front it should say, "This certificate expires on January 1, 2014" ....explaining that it must be redeemed for real Bitcoins, or replaced with a new certificate, prior to that date.

They could come in only one  denomination:     1 Bitcoin

....or two denominations:     1 Bitcoin     and     10 Bitcoins

....or three denominations:     1 Bitcoin     and     10 Bitcoins     and     20 Bitcoins

They could be purchased for their face value, and redeemed at any time for their face value.

Once Bitcoin has become so mainstream... and everyone on Earth has a Bitcoin smartphone app or the equivalent...  the Paper Bitcoin will no longer be needed, and they can stop being issued.... They can all simply be redeemed as they come in... until there are no more.   It can end naturally, from attrition.

From what I understand, such paper certificates printed on custom-designed security paper could cost as little as 25 cents each to print (and up... depending on how many "layers of security you want to include in the printing process).

For that matter, if we spent $0.25 per item for the 1 Bitcoin denomination paper....   At the same ratio of cost/value...  we could spend $2.50 per item for the 10 Bitcoin denomination paper....  And $5.00 per item for the 20 Bitcoin paper...    if that makes sense to do.

Which is why I mentioned an RFID chip as well, which could contain the address that the private key (keypair) hidden inside refers to.  So anyone with an RFID reader could check the address against a blockchain to see if the address still had the coins.