Bitcoin Forum

Hey,

I'm relativly new here (lurked quite some time) and just getting started with this whole crypto currency thing these days as I've watched BTC over the past 2 years.

However, even if I believe that a cryptocurrency will sometime be our major trading currency, I still see a really big flaw in this whole thing when it comes to real life cases. As we all know, we can buy much stuff with our BTC or LTC or whatever crypto currency you want, but as soon as I leave my house, there is not that much I can pay with my BTC, even if I would carry a paperwallet with me.

But let me explain a bit what I really mean...

If I take a normal day of my live and the interactions I have with my surroundings, there is no real space for any cryptocurrency. If I go online - yes, plenty stuff can be paid, but in the real world you don't get much for your paperwallet. Even if you want to explain that guy at McDonalds that you can pay with this self printed sheet of paper container some QR codes...

The current way this goes, I live in germany, so we have debit cards here or what ever you call them, is that I flip out my debit card and simply pay for my groceries or fuel or whatever, if I'm not carrying cash with me. No hussle, pure awesomeness.
And that is basicly one of the main problems all cryptocurrencies currently have. I cant simply flip out my paperwallet and pay with it like I do with my debit/credit card.

And this lead me to how you could fix this one.

How would it be if we had some firms, maybe just one or two or whatever, that sells these swipe things, which you swipe your card through to pay, simply for crypto currencies? You see, its not that hard to make a kind of card holding maybe an identification for the cryptocurrency of the card (btc,ltc,whatever) and the private key of a wallet. It would be flip card out, swipe through, stuff payed. Simple easy... And you can teach this far better to your grandma that that strange bits and bytes on your computer where you own 2 BTCs and thats like $2000, or at least were yesterday.

I believe if there were something like this, it would be easy to sell for banks, since they can simply trade with btcs of customers (here: owner of shop), and even for the customers of the shops themselves. Because you can explain someone to flip the card out where you have like 1 btc and pay 1 thing for 0.25 btc, its simple math.

So how exactly would I imagine something like this...

Well, first of I'm gonna explain a bit more about the card. The card should have some security features to make it resistant to somewhat stealing ffrom a person or any real life problems you will encounter in your life.
Thankfully banks already did this for us. You could simply use a 4 digit pin to encrypt your private key on the card so nobody can read it after stealing it. Well, they could bruteforce a 4 digit pin, but better than nothing right? But could also make it like 4-16pin long or something. But since this would be some kind of prepaid card a 4pin digit will work first.
Also there would be needed some kind of identification for the card for what currency this one trades. If we check the byte size of modern magnetic cards (those used for debit and credit), we get a maximum available bytesize of  448 bytes. That would be enough to save the private key of any bitcoin wallet (256bit key for private key used in bitcoin - 32 byte) we would end up having 416 byte still available, maybe for usage of another bitcoin wallet or to enforce encryption upon the private key itself, making it harder to actually "steal" the wallet. I would most likely go for 64byte private key + encryption and further information about the kind of cryptocurrency, like protocol (BTC,LTC). So there should be no issue storing all that data on a usual card.

Now on to the swipe thingy (still dont know what it is called in english :( ). We would need this swipe thing to parse input of an encrypted private key, giving a keypad for pin input to decrypt the private key. After that would be done we simply would need to connect to the protocol specified for the card (btc, ltc) and send the transaction to the network after maybe checking if the private key holds enough money. There would be no need to actually process blocks.

Now this is one of the main reasons of me believing what needs to be done to reach a more broad audience for crypto currencies themselves.

What do you think about this?


P.S.: If there is enough interest I might start to work on this, making it most likely open source, but not so sure about that because people could modify swipe things and steal from you...
P.S.S.: Maybe I'm gonna publish a whitepaper on this topic these coming days...

In those two years have you never had this idea before?

I am wondering because you make no mention of all the many many threads and projects that already address this...

How did you miss them all?

-MarkM-

Well, if you say it this way, I seem to have missed some. Any actual projects on this issue? Which still are under active development?

I just kinda feel that this has all shifted away to more like exchange stuff, watching the network etc...

Sincerly

Mastercoin, Bitshares, Coloured Coins, FellowTraveler's "Holy Grail" thread are all still active aren't they?

-MarkM-

Well, actually those are simply alt coins after all, but i think you didn't understand what i really meant. However, I see that a whitepaper should be necessary for this...

The problem with giving out your private key is that then people can take your money.

The whole concept of a card that holds your keys does not actually make sense.
What do you need a card for? And hardware beyond your control that reads it?

You already carry everything you need along with you all the time.
It's called a cellphone.
Install a wallet app, load some change onto it, and you're set.

Making merchants accept payments via mobile phone is already happening, not even affiliated with Bitcoin, it's called "mobile payments" and is considered one of the most important markets of the near future, so we don't even need dedicated Bitcoin merchant terminals. All we need is mobile payment solution providers to also prepare for Bitcoin. And they will, because Bitcoin is just the hype of the day when it comes to talking with venture capital.

OpenCXP is very close to what you've described: http://www.OpenCXP.org

Currently in pre-release RFC stage (request for comment) but the official white paper should be released soon.

This looks kind of what I though about, here and there some things I've not figured out that much but look promising, thanks for the link.


Since you seem to be from germany too, you will gladly answer the following questions:

1. When was the last time you payed something with mobile payment from your phone
2. What is the ration of you paying with your card/phone
3. Do you really believe that a cellphone is more secure than a card?
4. Do you really believe that paying via cellphone stops people from stealing your data?
5. Do you really believe you will still be able to make anonymous payments via mobile payment when compared to a card which would be more anonymous?

And yeah, mobile payment is a trend and will be the future. However, living in a world where the "tech scene" still talks about how big ecommerce will be and why you should add responsiveness to your homepage, i don't believe that this future is somewhere so close as all people mean it is. Sure, there are some hip trendy stores accepting it, but thats not a majority and i doubt the majority will accept this so soon.

Almost every Bitcoin meetup, and I tend to attend them a lot ;)

20/1 ratio now, but uphill for the phone.

For your use case, definitely, and by a great margin.
I don't give my phone to somebody to pay. I do give out my card, though. That's highly insecure.

There is no "absolute" security. Relatively, though, you're much safer from theft with your phone than with your cards.

Why would the card be more anonymous? My phone is anonymous "enough" for everyday use. When it comes to protection from identification by the NSA or whoever... well, I don't actually have a need for that. And there are few who do.
If and when I need that kind of security, I wouldn't rely on day-to-day technology anyway.

The point is: a phone can do whatever you can do with your card. The logistics for equipping millions of users with a special card are way above anything a small community like ours can handle. The logistics to just churn out a useful android app and getting users to install that on their already existing smartphones are a lot less complicated. In fact, there already are a lot of wallet apps and a number of users who downloaded them.

Getting merchants to accept a new card will require new hardware on their side or legacy payment providers to update their software, which they won't, because it would damage their business models. Basically, neither is likely to happen anytime soon. Getting merchants to install an app on their respective smartphones or install some software on their office computers is a lot easier.

In the end, it all boils down to this: for a "card" solution, you need a lot of new hardware both on the clients' as well as the merchants' sides. For a smartphone solution, all you need to do is convince clients and merchants of the benefits of some small apps.

Yeah, I see that it is difficult to actually convince you that your smartphone is pretty unsecure. Its not like almost every app can access your filesystem and steal your wallet right?

Anyway, there seems not to much interest in this one so maybe I will just skip this idea.

P.s.: paying in bitcoin meetups is not really valuable for every day life, except you attend one every day.

That's not a real problem.
Of course your wallet app is "absolutely" insecure, which I already mentioned.
The point is, security always is relative. There is no such thing as an absolutely secure system.
For smaller amounts of money, the sums you would carry along in your day-to-day wallet app, it simply doesn't matter. There's no need for your wallet app to be more secure than your cash wallet.
Again, your card definitely is less secure than your mobile phone, simply because you have to give up physical possession of it for payments, if only for a brief period of time when the card is inside some POS-terminal. Your smartphone can stay in your own hand all the time. No need for anything but an air-gapped scanning of QR-codes required. That's pretty secure.

If you think about viruses, trojans, whatever for mobile phones, you're right, though. Wallet apps could become a lucrative target for those. But that's actually a trade-off between security and comfort, which is a problem without a solution so far, no matter what technology is used.

Anyone who has paid by smartphone at retail will recognize that it's not really ready for primetime. It's pretty surprising that retailers are using it at all considering how inefficient and time consuming it is compared to other payment methods.

Any solution that requires fidgeting with phone apps, internet connectivity, waiting for confirmations etc. is a non-starter for any mainstream retail environment. There's just no way it will be adopted until a workable alternative similar to existing payment methods comes along.

You probably never tried a smartphone wallet-to-wallet transaction. It's pretty straightforward, no fiddling involved (given connectivity, I always have problems with that ::)). No waiting for confirmations needed, that's a common misconception.
The sentence "there's just no way it will be adopted" is plain ignorant.
It already is adopted by a growing number of merchants.

I am unsure wether merchants will sooner or later start using specialized hardware for it (I'd expect specialized POS-hardware for connectivity to legacy cash registers etc.), but rest assured, clients will just use their smartphones.

The reason is simple, they already have that.
Easy to setup, easy to use, easy to build an infrastructure.
And it's safe and convenient enough.

The idea of a specialized Bitcoin card, specialized hardware like the trezor etc. has been around for years. For some use cases, there's some merit to these ideas. Not for brick-and-mortar point of sales, though.

Actually my views on this come from having been both a participant and observer to many in-person retail transactions using the Blockchain app, etc. And yes, there's plenty of both fidgeting and waiting for tx's (compared to a tap-and-pay NFC, swipe or even chip-and-pin transaction).

Please note that I was explicitly referring to mainstream retailers (i.e. large, major retailers like grocery, dept. store, etc) - not small cafe's, shops etc. of which a (very small) percentage are already are adopting btc. These are usually single-location retailers with bitcoin-enthusiast owners/managers willing to sacrifice efficiency just for the novelty of accepting btc.

I'll stand by my "ignorant" statement that mainstream retailers will never adopt bitcoin payments in their current form - it will need to become much more streamlined. OpenCXP is a decentralized, non-commercial proposal that addresses these concerns (and can still use smartphones, without requiring them).

basicly thats how I think too. The current retailers accepting BTC are small tech savy guys/girls. There is no big player accepting btcs on the market and they wont do that in the current form of transactions. Its fine to pay with btcs scanning a qr code in your app, but waiting like 10minutes for confirmations will be the pain in the ...

Its just to "difficult" and unpleasent for retailers to accept them with your smartphone. It takes around 20 seconds for me paying with my card instead of maybe 10 seconds scanning a qr code and then waiting like 10minutes for confirmations.

But at least one seemed to get my point which I wanted to state out here...

There is zero need to wait for a confirmation for brick-and-mortar-businesses who want to accept Bitcoin payments.

Bear in mind too that if you are going the scan route then you also free up all your cash register operators, since the customer can scan the products they want instead of loading them into a grocery cart, and the box-and-bag-carrier guys can pack it all and deliver it to your car for you directly from the inventory handling facility... You'd scan your products, maybe even via your phone's browser before you even visit the store physically, pick it up already boxed/bagged for you ten minutes later.

Shoplifting should be cut down since all the sample/example/display items the shopper examines/scans can be nailed/tied down.

I am going with your "major retailers" concept, so thinking of retailers such as Amazon and Walmart. Shops would have two sections, the display section where you choose what to buy, and the fulfillment section that delivers it to you or has it waiting for pickup for you. As soon as you scan something it can be picked by robotic arms put into conveyors or whatever...

Heck if you believe Amazon, a drone will fly it to your doorstep from their fulfillment centre if you want...

I suspect also that just finding my way to a checkout in a huge unfamiliar Walmart with my cart takes me at least ten minutes, so by the time I walked or escalated or whatever back from the department/area my desired goods are displayed in it'd all already be rung up and waiting for me. Assuming I do actually insist on inspecting a display model of the thing instead of just browsing it on a screen/kiosk right up near the entrance to the store or even at home before heading out to pick the stuff up...

-MarkM-