What do you think about this "Bitcoin-backed money" idea?

Harpua

full member

Activity: 224

Merit: 100

Spastic dead-eyed hound.

Quote from: Wendigo on May 15, 2016, 11:18:34 AM

This idea simply won't work because Bitcoin is a decentralized digital currency that can't function normally as a centralized paper-based physical money. We would need some kind of authority to issue these paper Bitcoin certificates otherwise people would go on a rampage scamming each other with empty wallets. How are we going to verify that the displayed amount of Bitcoin is actually not spent already? Plus the public Bitcoin key that is visible might not match the fake private keys that are enclosed inside. People would need to open and check the private keys upon every transaction and this will be definitely much slower than just transacting the coins digitally and be done with it.

I hate to be that guy, but you know in this case that it would be the government being that kind of authority. There would need to be some sort global system that logs all the "physical currency" private keys and put them into a data base that allows a quick scan at the register to check and see if the note is "viable"...

This is way too much, I think, and there will have to be another way for delivering small payments for everyday transactions.

Wendigo

legendary

Activity: 2604

Merit: 1036

This idea simply won't work because Bitcoin is a decentralized digital currency that can't function normally as a centralized paper-based physical money. We would need some kind of authority to issue these paper Bitcoin certificates otherwise people would go on a rampage scamming each other with empty wallets. How are we going to verify that the displayed amount of Bitcoin is actually not spent already? Plus the public Bitcoin key that is visible might not match the fake private keys that are enclosed inside. People would need to open and check the private keys upon every transaction and this will be definitely much slower than just transacting the coins digitally and be done with it.

Ultrafinery

member

Activity: 84

Merit: 10

Quote from: Denker on May 15, 2016, 10:58:01 AM

Lightning Network is the pipeline with a first functional version for this year.Then you won't have to wait a few minutes if you are going to buy something with Bitcoin of bigger value.

You will, otoh, have to pre-fund all your purchases, as you would by buying a gift card. In other words, if you want to use Lightning to buy your Starbucks coffee, you will first have to "create a payment channel" and fund it with enough bitcoin to cover all your future purchases.
Just like buying a gift card.

Denker

legendary

Activity: 1442

Merit: 1016

Quote from: dsyahputera on May 15, 2016, 12:59:14 AM

Quote from: Harpua on May 14, 2016, 06:03:57 PM

Quote from: cpfreeplz on May 14, 2016, 04:08:16 PM

Why not either just use Bitcoin normally or if you want to have a 'note' then print a paper wallet on some fancy paper? I don't really see the point of your idea. If I want to give someone BTC I'll send them some from a hot wallet on a mobile device.

Well, theoretically, let's just say that a lot of people are starting to use Bitcoin every where in the world, and now it's the new "global" currency for literally everything. Think of how many transactions are going to be on pending on every block in that scenario... I mean we are having somewhat trouble at the rate transaction are going right now, and "normal" people aren't using it.

Unless there is some revolutionary way to make the blockchain handle that incredible amount of transactions in "visa-like" fashion; there is no way to expect everyone to transact easily on the network without paying a ridiculously high transaction fee (which is what bitcoin is trying to get away from in the first place).

Yes actually I thought about this idea for a moment where Bitcoin has become a global currency. Instead of waiting a few minutes to confirm the transaction (and perhaps in the future it will be much longer) it is easier to pay only with this ~~banknotes~~ Bitcoinnotes.

Lightning Network is the pipeline with a first functional version for this year.Then you won't have to wait a few minutes if you are going to buy something with Bitcoin of bigger value.

Ultrafinery

member

Activity: 84

Merit: 10

Quote from: odolvlobo on May 15, 2016, 01:18:19 AM

Quote from: dsyahputera on May 14, 2016, 07:06:41 AM

I just wondering if Bitcoin can also have representative form like the gold certificate. This representative form will be a paper that contain sealed private key. This paper will have face value that represent the Bitcoin amount it has. We could call this "Bitcoin-backed money". Futhermore we can use this Bitcoin-backed money just like we use paper money (banknotes) everyday.

Like these?

https://www.bitcoinsuisse.ch/en/physical-products/#Certificates

I know, why don't we make Bit COINS? Huh? Best Idea ever or what?

knowhow

hero member

Activity: 560

Merit: 500

Sure you just got certificates you hold an ammount of gold ,doesnt mean they got that all to let you walk a way with it.Bitcoin its a currency not recognized by the countries,to it happen it would need to change the concept of bitcoin ,decentralization,and become regulated,and well people would left bitcoin almost instant as bitcoin is our currency and not from countries or politicians.

Kprawn

legendary

Activity: 1904

Merit: 1074

In many countries, printing your own money are illegal... This is why most countries classify Bitcoin as a commodity... if they acknowledged it as a currency, they would be allowing every other type

of attempt of people to create their own currency. In any way, most of these certificates are totally worthless... I can guarantee you, if you owned a large amount of gold and you want to claim the

actual gold for those certificates... they would turn you away... Why? ... because most of that gold only exist on paper or on a manipulated digital ledger. Ask the feds to show any credible auditor the

gold that are supposed to be in the vaults and they will also be turned away... {because it's not there} They will say, it is for security reasons.. but it's to hide the real proof... most of it, is gone. Roll Eyes

http://nsnbc.me/2013/04/18/federal-reserve-refuses-to-submit-to-an-audit-of-germanys-gold-held-in-u-s-vaults-2/

Hirose UK

hero member

Activity: 1302

Merit: 503

Leading Crypto Sports Betting & Casino Platform

that's good for my part. if bitcoin has certificate, it will be legal in some countries, even world and my country. so it will make us easier to use bitcoins as currency.

when do you think bitcoin will be kind of thing?

avikz

legendary

Activity: 3080

Merit: 1500

bitcoin-backed-money is not particularly a good idea because, bitcoin is not a tangible asset. If a money is not based on a tangible asset, it will hold no value to the public. Only a few tech savy people would be interested to use it.

Acceptability will become a problem. If bitcoin can be physical asset, then probably it will have some value. Otherwise bitcoin is rocking in its current form.

stereotype

legendary

Activity: 1554

Merit: 1000

If its usable physical crypto money thats being discussed, then maybe smoothie's Lealana LTC, or Mike Caldwell's Casascius are the closest examples. They never will be used as cypto money, of course, as its an oxymoron to have digital money mascarading as physical money. Maybe if some clever NFC tech can be employed, possibly, but you still have the problems of issuance, ongoing security, and durability etc.
However, Mike Caldwell maybe thinks theres a future for paper cypto money.....i seem to remember Mike standing up at a conference (late 2013??), and waving his newly created uberbills in the air.

odolvlobo

legendary

Activity: 4466

Merit: 3391

Quote from: dsyahputera on May 14, 2016, 07:06:41 AM

I just wondering if Bitcoin can also have representative form like the gold certificate. This representative form will be a paper that contain sealed private key. This paper will have face value that represent the Bitcoin amount it has. We could call this "Bitcoin-backed money". Futhermore we can use this Bitcoin-backed money just like we use paper money (banknotes) everyday.

Like these?

https://www.bitcoinsuisse.ch/en/physical-products/#Certificates

dsyahputera

full member

Activity: 224

Merit: 100

Quote from: Harpua on May 14, 2016, 06:03:57 PM

Quote from: cpfreeplz on May 14, 2016, 04:08:16 PM

Why not either just use Bitcoin normally or if you want to have a 'note' then print a paper wallet on some fancy paper? I don't really see the point of your idea. If I want to give someone BTC I'll send them some from a hot wallet on a mobile device.

Well, theoretically, let's just say that a lot of people are starting to use Bitcoin every where in the world, and now it's the new "global" currency for literally everything. Think of how many transactions are going to be on pending on every block in that scenario... I mean we are having somewhat trouble at the rate transaction are going right now, and "normal" people aren't using it.

Unless there is some revolutionary way to make the blockchain handle that incredible amount of transactions in "visa-like" fashion; there is no way to expect everyone to transact easily on the network without paying a ridiculously high transaction fee (which is what bitcoin is trying to get away from in the first place).

Yes actually I thought about this idea for a moment where Bitcoin has become a global currency. Instead of waiting a few minutes to confirm the transaction (and perhaps in the future it will be much longer) it is easier to pay only with this ~~banknotes~~ Bitcoinnotes.

Quote from: nanonymousx on May 15, 2016, 12:40:28 AM

Don't see why this is necessary, and what is the reason doing this, since bitcoin itself probably easier to transfer than the paper. In old days, transport a ton of gold from north to south is prohibitive, but bitcoin is very easy.

Take a look at quoted post above.

mkc

hero member

Activity: 517

Merit: 501

Quote from: nanonymousx on May 15, 2016, 12:40:28 AM

Don't see why this is necessary, and what is the reason doing this, since bitcoin itself probably easier to transfer than the paper. In old days, transport a ton of gold from north to south is prohibitive, but bitcoin is very easy.

I agree, from my understanding of the history of paper currency, it was started as way to help out the trades. Bitcoin itself is super at this.

nanonymousx

sr. member

Activity: 252

Merit: 250

You mean, you or someone come out issue a piece of paper, also, you or someone promise, with this paper, anyone can come to you get this much bitcoins.

Don't see why this is necessary, and what is the reason doing this, since bitcoin itself probably easier to transfer than the paper. In old days, transport a ton of gold from north to south is prohibitive, but bitcoin is very easy.

dsyahputera

full member

Activity: 224

Merit: 100

Quote from: 2c0de on May 14, 2016, 07:37:36 AM

This idea, almost as old as Bitcoin itself, also known as trading paper wallets.

The idea is different from trading paper wallet. It's more to like to spend your ~~money~~ Bitcoin as a paper money.

Quote from: 2c0de on May 14, 2016, 07:37:36 AM

First of all the seal is pointless because the individual who sealed it could see it before sealing, so it does not really prove the key is "secret"

I think there must be a foundation that issued the certificate.

Quote from: 2c0de on May 14, 2016, 07:37:36 AM

Secondly, the user needs to check blockchain to verify the token indeed has the balance any time

Let me ask, did the people in the past who hold gold certificates will check whether the gold is really there?

Quote from: 2c0de on May 14, 2016, 07:37:36 AM

Third , in a real world use, Bitcoin-haters, spies and cops see it's not cash so u can have trouble. This is how legal tender law is enforced.
Compare this with two people pressing buttons on their phones is completely stealth and not suspicious at all.

I do not have any idea about this.

Evildrum

member

Activity: 84

Merit: 10

★YoBit.Net★ 350+ Coins Exchange & Dice

To me I may be misunderstanding this but it feels like a bunch of work to achieve something you could do by just purchasing the bitcoin out right. Bitcoin would also have to reach a large segment for something of this magnitude to work.

Harpua

full member

Activity: 224

Merit: 100

Spastic dead-eyed hound.

Quote from: cpfreeplz on May 14, 2016, 04:08:16 PM

Why not either just use Bitcoin normally or if you want to have a 'note' then print a paper wallet on some fancy paper? I don't really see the point of your idea. If I want to give someone BTC I'll send them some from a hot wallet on a mobile device.

Well, theoretically, let's just say that a lot of people are starting to use Bitcoin every where in the world, and now it's the new "global" currency for literally everything. Think of how many transactions are going to be on pending on every block in that scenario... I mean we are having somewhat trouble at the rate transaction are going right now, and "normal" people aren't using it.

Unless there is some revolutionary way to make the blockchain handle that incredible amount of transactions in "visa-like" fashion; there is no way to expect everyone to transact easily on the network without paying a ridiculously high transaction fee (which is what bitcoin is trying to get away from in the first place).

cpfreeplz

legendary

Activity: 966

Merit: 1042

Why not either just use Bitcoin normally or if you want to have a 'note' then print a paper wallet on some fancy paper? I don't really see the point of your idea. If I want to give someone BTC I'll send them some from a hot wallet on a mobile device.

European Central Bank

legendary

Activity: 1288

Merit: 1087

Too vulnerable to be messed with. Then you got dilution problems too. The only way you can be sure is to crack the certificates open in which case there's no point in having them in the first place.

davinchi

legendary

Activity: 2100

Merit: 1058

I'm sure that the intentions of this idea is good, although I don't see the potential or the need for such as of now. Bitcoin is yet only a peer-to-peer transaction. The question is that who would have the legal authority to confirm the validity of such certificates?

Topic: What do you think about this "Bitcoin-backed money" idea? (Read 1094 times)