Topic: Physical BTC. How does it work? (Read 4798 times)

bitcoin is a digital currency. it doesn't exist in physical form. if someone is telling you its telling you wrong BTC only exist electronically

I believe that their is a big potential for yhr mixture of NFC devices, btc and payment. Or at least credit card style card linked to an acc with btc in it. I think this is where this is all going.

Not its own wallet, but its own address. (read up on the terminology if you are not sure about the difference)

Basically the producer of the coin (say a 1BTC coin) will generate a new address and then transfer 1BTC to that address.
This address is usually stamped on the coin so you can verify the balance on blockchain info.

Hidden under the tamperproof seal is the private key which you need to import into a wallet if you want to spend the coin.

It is recommended that when spending these or paper wallets to spend the whole lot, since the private key will have been exposed to the network and could compromise the safety of any funds left in that address (or the change address)


FAQ.. https://www.casascius.com/faq.aspx

+1
paper wallet -> in safe -> in fire place

They are like a paper wallet!

Are you asking how bitcoins enter the system?   All bitcoins are issued first as the block reward subsidy issued to miners.  

As far as how Casascius transfers funds to the addresses for the physical coins it can differ based on how they are shipped.   The coins shipped domestically are manufactured, funded and then shipped.  The coins shipped internationally are manufactured and shipped but because of VAT (taxes), they are not funded until after they've been received by the customer.    If the coins never arrive, they are still funded as otherwise that would mean there are unfunded Casascius coins potentially circulating and that would be bad.

Since Casascius receives payment in bitcoins, those funds might also be used to load value to the physical coins, or more coins might be purchased from an exchange on an as-needed basis.

I know this is old but trying to understand. so each physical coin is it's own wallet? Someone had to transfer the coin from a computer wallet at some point onto the coin, right? I guess my question is where does the bitcoin come from that is put on the coin?

The physical coins like Casascius are essentially destroyed when you peel the hologram to get at the private key.

You can add funds to the coin, as often as you want, but as soon as you want to spend from it, then that's pretty much the end of the coin.

The benefit of physical BTC (e.g., paper wallet) is that it is secure.  No malware is going to get at the private key from a piece of paper you printed from a secure computer and is now stored in a fire-proof safe.  But once you want to spend from that paper wallet, you've imported the private key or redeemed it online, therefore that wallet can no longer be considered secure. 

When higher security is needed, you don't use a paper wallet, you use a secure computer that has an air gap from the network, and create the spend transactions which are then manually transferred to a networked connection and broadcast to the network. 

Now that there are decent mobile alternatives (e.g., BitcoinSpinner for Android) there's less demand for physical bitcoins to serve as the method those with a Windows computer would want to use to ensure their system problems from their PC won't become financial problems for their bitcoin wallet.

Can you refill the coin's wallet after you use it up?

Doh!  Sorry,

 - http://www.BitAddress.org

uh oh. That domain seems to have gone away. 

That's not quite right. Physical bitcoins cost more because they have an added value, being able to be traded without being online. The fact that they cost more to produce than the bitcoins they hold merely means they won't be produced unless they are valued/sold for at least that price.

Great info. 

If you hear of any way to buy BTC in Argentina, we could use a new currency right about now as the 'peso' has gone from 4.5 / 1 - (AR/US dollar) to 7/1 all in the last 3 months.

I have been trying to push a couple of stores/restaurants to start accepting BTC.  This is a cash society - would be perfect.

If you are only looking for a secure, offline wallet - paper bitcoins fit the bill (pun intended).

 - http://www.BitAddress.org  [Edit:  correct domain is .org not .com]

Print that out, then add funds to the bitcoin address using an exchange.

In many countries there are cash deposit methods available.  Specifically:

 - U.S. - deposit at a bank or 7-11, Walmart, CVS, etc using BitInstant with delivery to the bitcoin address you provide.  Also MrBitcoins.com (among others) can be used for this.
 - Canada - deposit at some banks using CAVirtex.com
 - Brazil - deposit cash using Boleto or Banco Recomendito using BitInstant
 - Russia - deposit cash using Qiwi or Cyberplat using BitInstant
 - India - deposit cash at HDFC Bank using MrBitcoins.com
 - Australia - deposit cash at a bank using MrBitcoins.com, SpendBitcoins, and CryptoXChange

There are also methods where you can send cash-in-the-mail or check to purchase bitcoins.

 - USD - cash in mail to Get-Bitcoin.com, cash, personal check or postal money order to Camp BX.
 - CAD - cash in mail to CanadianBitcoins.com
 - USD, EUR, GBP and DKK to BitcoinNordic.com

Then, when the day comes you want to spend the funds, you can import the private key into a wallet or EWallet (e.g. Mt. Gox, or Blockchain.info).

Do keep in mind that if your system needs to be secure when printing out the BitAddress paper bitcoin.  To protect against these risks, what some people do is copy the html from BitAddress.org and use a bootable operating system / LiveOS (e.g., Ubuntu using the ISO distribution) on a system that is not connected to the network (air gapped).  That way it can be assurred that there was no malware that knows the private key.

For larger amounts of money, these protections make sense.  For a couple of bitcoins, not as much paranoia is necessary.

Thanks for the reply.
I'll look into it.
Maybe I'll buy one or two for the stored value.

Physical Bitcoins (like Casascius) contain a private key (a string of numbers and letters) that, when imported to a wallet, allows you to spend the coins in a certain Bitcoin address. That Bitcoin address contains however many BTC the coin is worth. You can import the private key into an online wallet such as MtGox or a program such as Armory.

Physical Bitcoins cost more money than the digital Bitcoins in the address because it costs money to produce and distribute the coins.

As for the value in the metal of the coins, that depends on the physical coin.

Check out http://www.casascius.com for physical Bitcoins.

How to physical bitcoins work?
Do they cost more than digital BTC?
Do they have any value in the metal?
Thanks.