Now you are talking about Trusted Platform Modules. Like smartcards, actually. Devices that won't leak their keys but let the holder spend the coins. It could even have it's own simple SPV wallet client to make it easier to handle. And they'd use the attestation features provided by the TPM to prove the software it's unmodified top the current holder.
But then you still have to trust the manufacturer of the device, and you have to trust it has no exploitable side channels.
- Sent from my phone
I had a long discussion recently with somebody who wants and has resources to do exactly this - paper currency representing bitcoins. Yet we've been thinking mostly about a centralized solution, where one party is producing and maintaining paper currency, with bitcoins tied to each note verifiable via blockchain.The points we've ended up is that it needs to be:- reloadable- NFC basedSo anybody can verify any notes instantly by just touching it with his phone, and so merchants could redeem the notes at the moment of accepting it, convert it into fully online bitcoins and avoid costs of maintaining paper money turnover. Probably merchant would sell back redeemed empty notes to the issuer for a price of the note issue, and issuer will recharge it and put back into circulation.One problem we couldn't figure out here though - how to protect the notes from unauthorized redeem. Like if someone else tries to reach your wallet with his own NFC - how can we distinguish between deliberate redeem by owner and fraudulent redeem by anybody else with custom built long range NFC antenna? Any ideas?Best regards,Alex Kotenko2014-05-17 17:40 GMT+01:00 Gregory Maxwell <gmaxwell@gmail.com>:On Sat, May 17, 2014 at 9:07 AM, Chris Pacia <ctpacia@gmail.com> wrote:Not just scan it, but they actually must successfully sweep it—
> I can't really just hand someone the note and walk away
> because they have to scan it to see if it is actually valid.
otherwise they can be trivially double spent. This is especially bad
since any prior bearer can perform such an attack. E.g. record the
private key of everyone that passes through your hands and then
doublespend race any redemption that happens >24 hours after you spend
them. The wrong person would likely be blamed and even if you were
blamed you could plausibly deny it ("Must have been the guy that gave
it to me!").
Othercoin seems to have much better properties in the space of offline
transactions: https://bitcointalk.org/index.php?topic=319146.0
Separately, Cassius also ran into some regulatory issues selling
physical bitcoin artifacts. Especially printing things that seem to be
redeemable for a named USD value sounds especially problematic.
Some random comments— The base58 encoding is fairly human unfriendly.
It's fine for something being copy and pasted, but I've found typing
or reading it works poorly due to mixed case. I expect the A/B side
to be difficult to educate users about. "This side is private" is more
easily understood, you could just pick one of your sides and call it
private. I find it kind of odd that this design seems to have no
facility for checking its txouts without recovering the private key,
though considering no one should rely on such a measurement without
sweeping perhaps thats for the best.
(As far as the numbering goes, I think you should be calling these
draft-felix-paper-currency etc. As a matter of hygienic practice I
will not assign a matching bip number for something that went public
with a number outside of the assignment.)
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