Bitcoin Forum

Does anybody know how Mint Chip will actually work? How does it verify transaction? Is the transaction record kept on the chip, or does every transaction get checked by a central server somewhere?

Just a few threads down from yours you have this one: https://bitcointalk.org/index.php?topic=75441.0

Which is a sprawling 12 pages about the benefits and downsides of a government digital currency.

So can you tell me the details of how Mint Chip works? What kind of cryptography does it use? When and who does it need to communicate with? If you fall in a lake is your mint chip toast? Can you have multiple mint chips all running the same account? How would they know what the other one is doing?

Should this be moved to the Alternate Cryptocurrencies board?
 - http://bitcointalk.org/index.php?board=67.0

no one knows this, and if anyone does they are not allowed to give the public this information at this time. that's not stopping anyone from speculation that it will work like other chips have b4, and will fail because of this.... people see whatever they want to see.

I'm going to assume it's exactly like the Visa/MC chips where it generates a unique handshake per transaction and somebody standing 10ft from you holding a RF reader bought from ebay can steal your coins and spend them without you ever knowing.

I don't think that's a good idea, for it's been argued that MintChip is not a cryptocurrency. Moving it there would be like claiming it is.

~Bruno~

You're right.  The Off-Topic board would probably be more appropriate.

you need to be about an inch away but otherwise 100% accurate

This.

If it's a chip, the first thing I want to do is stick it in the microwave and nuke it so it won't work. Microchips on my passport are bad, microchips on my credit cards are bad and microchips on my money are bad bad bad.

When a government takes control of something it tends to stop working well. Why would I want cryptocurrency issued (and regulated) by a government anyway? Isn't the whole point of Bitcoin that it is decentralized? Doesn't this remove one of the defining features of P2P cryptocurrency?

The reason i got interested in Bitcoin in the first place was that it circumvented the usual government-run banking systems.

assuming makes and ass out of you and me.



right but who cares, MintChip isn't going to revolutionize money(it doesn't even have the potential for that), its only going to make buying bitcoins easier(which has the potential revolutionize money!)  :D

any merchants that accepts mintchip can easily accept bitcoin too, because exchanging bitcoins for mintchip's USD or CAD can be automated and FREE! 0.00% exchange fee! how? P2P irreversible transactions Biatches  8)!

so thank Canada, they are working WITH us!

Yeah if that merchant doesn't sell anything over $5-10
Mintchip is for "very small transactions" which is still not a bad idea.

Also you are assuming (lol) no fees. I doubt all these supposed cloud cluster merchant payment gateway ideas floated on their site will do free transactions. Canadian Mint provides the hardware and infrastructure, then all the middle men vultures descend and take fees performing transactions on their network to credit/debit your mintchip. They will contract this out to huge corporations for the most money possible.

There's also the issue of the fine print where they can disable your chip whenever they want and make you replace it, arbitrarily reflash the firmware, ect. Oops there goes all your bitcoins, we're not liable because the mintchip was never designed for it. Sorry

Still a good idea, but yeah I'd rather just find somebody on the street and trade bitcoins for cash with an open source Cryptostick with AES-256 instead of using banks, centralization, tracking, IDs..

If you wana use Mint Chip for transactions over 10,000$, go ahead.
If you wana to use a cloud cluster merchant payment gateway instead of using a decentralized p2p exchange, go head.
If you wana microwave your mintchip with money on it... go ahead.
If you wana trade 100BTC on the street for cash, go ahead!

but the money in my bank account is safe right?

you have to stop thinking the government is out to get you...

Who is paying for all those chips that are going to be placed in smartphones? I'm sure they're not cheap.

~Bruno~

chips are cheep if they are mass produced, question is will Apple want to support it? why not just us the chips in the cloud?

what


mintchip is not decentralized


it's not out to get me, just currently incompetent. it is specifically designed for future forced updates. If you hack it to hold BTC, then your hack is gone once it force updates and coins lost unless you back up all the keys.


lol. they completely shit talked bitcoin claiming it was basically doomed while stealing a lot of it's innovations, making it closed source and centralized, claiming they invented something totally awesome which is in reality, a mundane portable wallet to buy a $2 coffee with, secured with questionable cert authority 1990s technology and most likely visa paywave chip junk.

Ya, that's right


so what? because its like cash you can exchange it in a decentralized manner


ok, i have to agree with you, absolute power corrupts absolutely.


you mean people on their forum picking at some "flaws" of bitcoin? (this goes both way) did the mint itself directly shit talked bitcoin?


all I'm saying is "COOL digital money!  :D" this makes the bitcoin world and the fiat world come closer, this is a good thing. we all know bitcion is better,but we can't live without money... so ill take want i can get

MintChip is cool end of story.

What makes you think MintChip will be free?  Name on instance where a monopoly gives away its product for free?

I am imagining
1) you pay for the mint chip
2) you pay to load the chip or unload the chip
3) you pay a tx fee on each tx.
4) when central bank declares chip v1.0 obsolete you pay for a new chip and also pay an upgrade fee to transfer value from old chips to new chips.

The design docs seem to indicate the chips will enforce a hard limit on the amount of funds which can be stored on each chip.  Of course the chips aren't free either.

So yeah I guess if you decide to buy 100 mintchips (at what $10 ea?) then pay a broker a fee for 100 loads on your 100 chips (will you even be able to do that, will broker's ask for detailed ID and limit one person to 1 active chip?) and hook them into a rats nets of usb cables and hub and use them to process 100x the enforced limit.

I doubt many people will do that.

What is the limit?  Well it is closed source and the specs don't state but I guarantee a limit will be enforced if no other reason than AML.  Also remember if a chip is hacked the amount of funds the central bank loses is directly related to the size of the chip (and # of tx that can be completed before blocking the hack) so there is another reason to limit both the max value on the chip and the max tx size.

MintChip has a poor security scheme and will be counterfeited. It will probably have high fees from brokers. It will have limited use, what can you buy for ten bucks? It is vaporware and is probably a FUD against what we have planned for Bitcoin.

The list of negatives for MintChip go on and on. At least it will be good for buying Bitcoin.

Android, Team Fortress 2

Wouldn't the negatives you just outlined also apply for buying Bitcoins.

1) Seller is exposed to potential counterfeiting
2) Buyer's acqusistion price includes those high fees.
3) Both parties are limited to a small number of coins.

:)

The best thing about MintChip is increasing awareness of Bitcoin.  The first time someone runs into an artificial limit set by a central bank they will ask "Why?" and hopefully it is something like "Why does MintChip have a limit on tx but Bitcoin doesn't?"  or "Why do I need to buy this $10 chip only from the central bank but with Bitcoin I can use any free wallet?" or "Why does the value of my MintChips continually go down due to inflation but Bitcoin works with a predetermined minting rate?"

To answer the OP direct question this is my understanding by reading the spec and API docs.  Everything is closed source and some low level details are simply not provided so assumptions and inferences which may later prove to be incorrect had to be made.

How it works?
The blockchain is the cornerstone technology for Bitcoin.  Without the blockchain nothing is possible.  The equivelent in MintChip system is the physical MintChip ("the chip").  The chip is a physically hardened tamper resistant cryptographic processor.  It will be available in a variety of formats (SD card, USB stick, crypto module) but the internal chip is the same.

The chip has four key functions:
a) protects a private key from extraction (and provide access to the corresponding public key).
b) sign outgoing tx w/ private key
c) verify incoming tx as valid
d) process tx to update an internal record of current balance and enforce rules based on that internal balance value (i.e. can't spend money you don't have).

Like in Bitcoin the private key "controls" the funds but unlike in Bitcoin the private key is kept private even from the user.  The private key is known only to the chip.  The entire security model works around the inability for anyone even the owner/user to ever know the private key.

There is no central ledger (either private like in Paypal or distributed like in Bitcoin).  Duplicate tx (double spends) in Bitcoin can be easily made as the user has access to private key.  To prevent that Bitcoin uses the distributed consensus created by the blockchain and forwarding rules by nodes to make double spend attempts "easy but uneconomical".

With no central ledger each chip uses the public key of the sending chip, the signature or the tx, and a nonce to ensure that tx can't be faked.  If the tx is valid then the chip assumes it had to have been created by the sender's chip.  Given the private key is known only to the chip normally that is a valid assumption. If someone could extract the private key from the chip they could fake txs at will.  Essentially print money from nothing. For the system work nobody can ever extract the private key from any MintChip under any circumstances until the end of time. :)

Given the track record of "secret of a chip" systems it is an inevitability that someone will eventually be able to extract a private key and "counterfeit" funds.   Unlike physical counterfeiting there would be no incremental cost and counterfeit txs would be indistinguishable from valid txs.  Much like 51% attack is the Achilles heel of Bitcoin the extraction of private key from "the chip" is the Achilles heel of MintChip.

The "nobody not even user can know the secret key" limitation of MintChip creates some unique non-counterfeiting limitations:
a) deterministic wallets are impossible.  your chip is the wallet there is no exceptions.
b) backups of funds are impossible.  funds on lost/damaged chips are lost forever.
c) impossible to make "strongcoin" like limited trust ewallet services.  An ewallet provide will need physical access to "your chip" and thus 100% implicit trust is required.
d) unlike in Bitcoin double spends can't be detected.  Thus if fraud occurs the funds in circulation will be larger than the reserves held.  How this will be handled is unknown (central bank prints to cover the increase? fees remove funds from circulation?  exchange rate between physical CAD : mintchip CAD drops below 1:1?)

Does a receiver need a special chip? How does it vet the valid senders from invalid ones? Is there a stored list of every valid public key somewhere? Essentially what is the mechanism that stops someone from imitating a broker.

Would be nice to know what "inferences" D&T had to make to spread his FUD lol

I bet double-spends can be detected, just not if you're doing an offline transaction.

One way this could be done is for each transaction to carry around all of its inputs (to use the Bitcoin terminology), right back to the original input that loaded value onto the chip. Then, the double-spends get detected when chips are eventually "cashed in". The double-spends can be investigated and prosecuted by regular means (i.e. police evidence gathering rather than cryptographic techniques).

That, combined with the low transaction size limit and the high cost of extracting the key, is probably sufficient in practise to keep fraud low.

How would that scale? I suppose these chips have very limited memory, they can't keep such a record.

The system described by Death&Taxes really need a way to detect double-spends (done by someone who manage to access the private key of a chip), or it risks failing hard. And if this is tied to the CAD as I understand, potential hyperinflation of the Canadian currency could follow. I suppose they would "shut down MintChip" before such thing happens, but I can't see how you do it without damaging all legitimate owners of MintChips.

The Royal Canadian Mint better know what they are doing.... so far, to me, it seems they are taking a huge risk.

Receiver needs the same chip, the MintChip.  TX are only between MintChips.* 

* (loading and unloading chips is done only between a Mintchip and a broker)  

That information isn't provided in the very limited docs provided.  My assumption would be that all valid public keys have some cryptological property that allows identification.


Not as far as I can tell.  Brokers however are a special case.  Brokers don't use a MintChip.  They simply issue "load" and "unload" tx  to "mint" and "destroy" funds at will.   They have a cert/key? issued by the Royal Mint and the Royal Mint CA is available to all chips.  Each chip is able to validate 1) the cert from a broker is valid 2) the load/unload tx is valid (because it is signed by trusted broker).

MintChip uses the term "trusted broker" so my guess is that the regulations to be a "trusted broker" would be similar to being a bank or other financial services company.

I guess I should have said in realtime.  Online or offline doesn't really matter.  At the point of the fraud the fraud is undetectable.

Also tracing counterfeiting after the fact doesn't really help to prevent the fraud.  Imagine is counterfeit bills were so flawless than even US Treasury official would say they are valid.  Sure when checking serial # at the central bank they could realize that there are duplicate bills but that doesn't help enable detection/prevention at the point of fraud.

For example I buy a stolen mintchip (so any ID attached to the load and prior tx is not my own).  I extract the private key and counterfeit funds.   If I used those funds to purchase say Bitcoins anonymously there is now no trail which leads back or forward to me.

It's not like the card needs to hold the whole block chain. A 2GB microSD card can hold plenty of transaction data. Most transactions probably only do a few hops before they make their way back to the "trusted issuer".

I'm not saying this is how they would do it. I'm just saying that there are ways they could do it, and I don't think they're so stupid as to release a system that can be hacked to allow infinite double-spends.

Maybe they don't even allow re-spends? Maybe you can only spend the money you got loaded onto the card from your bank account, and that money can only be redeemed by you or the person you directly spend it to (unless you go online so that the trusted issuer can validate your balance).

In other words: Canadian Mint -> Trusted Issuer -> You -> Coffee Shop -> Trusted Issuer

You also keep making this distinction w/ offline & online where none exists.  It doesn't matter if the receiver is online or not.  There is no central ledger that an online receiver can consult.

The ONLY things the receiver has access to are:
a) sender's public key
b) the signed tx (signed by sender's private key)
c) a nonce (to prevent casual double spend - simply keep giving receiver the same exact signed tx over and over)

If the private key remains a secret then the system is impossible to forget or brute force.  Everything about the system is based on condition that sender will never be able to gain access to the private key.  If that remains true then double spend (more correctly counterfeiting) is impossible and the system works.

The tx history can't be used to validate if a tx is valid without access to the entire tx of the sender.  So while receiver may have tx record of prior tx from the sender that provides no security.

I never paid for a debit card or lost visa card replacements.

you can speculate that mintchip will be a totally useless and costly if you want ....

i think its more useful to think mintchip will be an improvement on "Chipped money", and will have some degree of success. and then we can have some fun it with it.

Of course you did just like you paid for all the bank's profit and all the merchants losses.  You paid for all of that in the form of higher prices.  Still it is an awesome model which VISA developed.  All the cost is obfuscated so customer just sees it as "free" and convenient.  Once you get a large enough network effect businesses are forced to play, cost goes up but is still hidden from the consumer.  As long as the consumer is happy VISA is happy.

I never said it would be useless but it surely won't be free.  

The designers finally released some more data on limitations


http://mintchipchallenge.com/forum_topics/859

So if they stick w/ a $500 max balance and $100 max tx is more interesting that the marketing talk about micro transactions.

Looks like every 500 tx though you will need to have a Trusted Broker download the log, erase the chip storage, and reset the starting balance to end prior ending balance ("reset").    

Now about that claim of anonymity ...

Heh, thanks D&T i read the mintchip thread and this is starting to look more like a joke to me. I'm really out of comparing points between mintchip and bitcoin, the later is the obvious winner.

The designers finally released some more data on limitations




their api ref. said the limit for a tx was about 16,000$ not 100$

agreed these limits are ridiculous ... now building a decentralized exchange using mint-chip seems pointless

RE: $100 per-transaction, $500 balance limit:

That makes perfect sense; they probably figured out about how much it will cost to hack a MintChip to get it's private key (dissolve case in acid, put it under an electron microscope, attach electrodes at exactly the right spots, etc...). Do a little calculation involving the cost of hacking one chip, the number of times you can double-spend before you're likely to get caught and the maximum amount per transaction and I bet they figure it doesn't pay.

Especially if online transactions "phone home" to detect double-spends.  If you have to physically walk to 500 different not-online merchants to get away with $50,000 worth of double-spends that's just like counterfeiting $100 bills, and that's an attack Mints have been pretty successfully dealing with for hundreds of years.

RE: anonymity: the anonymity model is similar to Bitcoin. Each physical MintChip is like a Bitcoin keypair, if you can easily buy/load a bunch of them anonymously then it will be hard for Them to track your purchases.

If MintChip fails I bet it is not due to hacking or lack of anonymity, but just due to the inconvenience of needing Yet Another Physical Doohickey. Paper money fits nicely into the wallet I already have, I don't want Yet Another Dongle on my keychain, and I bet before the end of the year either Apple will finally approve a Bitcoin app or there will be a nifty HTML5-based web wallet I can use on my iPhone...

Big IF there.  The only entities which can load/unload chips are trusted brokers.

Initially I thought of that being a non-issue as currency could circulate internal perpetually however w/ 500 tx limit everything goes through brokers initially and eventually so the govt has a complete list of all tx (albeit delayed up to 500 tx per user).

Thus I am not sure the claim of even even psuedo-anonymity can be made. 

It would be trivial for the govt to put all tx in database, link that to ID information on each mint user, load amounts, and unload amounts and build a complete tx record of every single user.   Given the potential I don't see how the central bank says "no" the first time the Canadian IRS or Police want that information.

The Bitcoin comparison would be if Mt.Gox collected ID on all users (sadly they pretty much do), the only place you could buy Bitcoins was Mt.Gox, and the only place you could sell them was Mt.Gox and every 500 tx you had to turn over your entire tx log (tighly coupled to your ID) to Mt.Gox to otherwise any Bitcoins you hold would become worthless.  Oh and there is no internal (anonymous) mining of coins, all mining is done by Mt.Gox.

IIUC they do. All chips (not just brokers) have a cert connected to the MintChip CA chain.

Cryptographically it's very straightforward and traditional. There is no support for anything resembling contracts or other complex transactions. You sign messages saying "increment your balance by X", and that's about it.

I'd like to see MintChip gain some of the features of Bitcoin, protocol wise. Cryptography based currencies are a new design space and can use some competition around different approaches. My gut feeling is that a hybrid solution would be best - using hardened chips can help Bitcoin, by making zero-conf offline transactions dramatically less risky, and a block chain can help MintChip by removing the "key leak = system doom" failure mode that undermines it today.

If they really intended to make something as anonymous as cash, they could have used a blinded signature algorithm like what's done in Open Transactions. Actually, they could become an Open Transaction issuer and server. That would be more anonymous than Bitcoin.

I'm not sure what they want, exactly.

I can imagine three primary scenarios:
1) transactions secured by the bitcoin network as usual (subject to transactions fees, and waiting for confirmations, etc)
2) transactions using a privately issued coinage that is backed by bitcoin (enables near instant confirmations, zero fee micro transactions)
3) offline transactions using a privately issued coinage that is backed by bitcoin and using a mintchip like device for security (instant confirmation, zero fees, disconnected operation)

People would be able to select the type of transaction that's most appropriate for the features they need and the risk they're willing to assume. 

P.S. I really hate that some of the regulatory uncertainty is likely stifling innovation in this area.

Rebuttal (http://en.wikipedia.org/wiki/Yagi-Uda_antenna)

Apple should not only accept Bitcoin, but should be creating hardware and apps if they want to stay relevant. Bitcoin will likely do to iTunes what mp3s did to Musicland.

Steve jobs, via proxy: I approve this message.

http://www.techdigest.tv/steve-jobs-grave-thumb-400x439.jpg

Why didn't it do this then yet after _years_ of existence? ::)

Back to MintChips:
It might still be interesting to use them for buying Bitcoins and use them as "digital cash". One of the questions that remains for me is: "Is it theoretically possible that transactions get reversed under any circumstance?".

If for example my chip has been loaded with double-spent Dollars without my knowledge, would I be denied that money at the next reset or not?

perhaps you'd be able to power them on, but it is a two-way session and you are going to have to get a signal from the 5mm (wild ass guess) antenna inside the card back to you reader. gl w/that

besides, canada uses chips already on their cards (at least for debit) that require you to put the card physically in a machine. not a big stretch to think that they might use the same system here

Quite the opposite, actually.  Getting power into the inductor to activate the chip is the hard part.  Eavesdropping on the RFID handshake from dozens of feet away is easy.  And when I say "easy", I mean don't take your RFID tags to Vegas when Defcon is in town.

Good question. They're the Mint, so I bet they'll handle that the same way they handle somebody showing up at a bank with a bunch of counterfeit $100 bills: they'll ask you where you got them, and either throw you in jail (if they don't like your story) or tell you to be more careful about who you deal with and maybe direct you to some technology to help detect counterfeits in the future. But they won't let you deposit them or trade your bad money for good.

On the other hand there is a nice talk about some SmartCards in Switzerland (http://www.youtube.com/watch?v=haDWFtMmZRs) where the authors were able to counterfeit and it's not very clear if the issuers did even notice. Similar systems are in use already for years in other countries too and even though it might be possible that there is also fraud going on, I haven't heard of any major arrests or anything like "100k Euro counterfeited in electronic money". More recently there was also a talk at a Chaos Communication Congress about a MIFARE system that was initially used for microtransactions (bus tickets) but got so popular that they decided that they expand it for bigger transactions. As it turned out, the money value there is just an integer stored in plaintext...

Of course here it seems like there's a more sophisticated system, but all in all to be safe you might need to reset your chip after every transaction you got as fast as possible to make sure you are the first one claiming an incoming transaction (I guess that double spends would be resolved like this).

Anyways, even though offline transactions are allowed and possible, you can only do a couple hundred of them, then you need to "Reset", most likely giving the transaction log to a central authority and not just deleting it. This means even if you manage to get transactions on your MintChip (which has a unique ID) only offline and want to cash out your 500 $ in 2 years the mint knows much earlier your likely balance + money flows, as most of the people will submit their transactions ("I transferred x amount of currency y to MintChip ID z") before that time.

Similar to the blocks in Bitcoin, that set transactions "in stone", the "Reset" mechanism in MintChips seems to be the way to detect and prevent double spending. Maybe they are even OK with double spends, maybe later they'll just include a "blacklist" of evil MintChip IDs that were used in double spends, since it's likely that it will be costly to extract a private key in the first place?

Nobody I've seen in Canada requires the chip. Everybody is getting a new card w/a chip but there's still plenty of standard mag stripe readers around in case the customer doesn't have a chip. In fact every single store, and every private street ATM I've ever seen still uses the standard swipe model.

That Yagi-Uda antenna is crazy. I could see somebody like Max Vision setting it up in a hotel in my city and capturing hundreds of cards per hour, and now mintchips.

I don't see any evidence that they ever intended it to be anonymous or even pseudo-anonymous. The official docs say that "no personal data is exchanged in the transaction", but that means the transaction between the buyer and the merchant. The block diagrams show that the chip's value is loaded from and redeemed to a linked bank account.

So the merchant may not know who you are, but the "trusted agent" surely does, and by extension you are not anonymous to the Mint and the Govt.

But you can use any mint chip you get right? The merchant doesn't get any info from the device so he can't know if it is 'yours'. I guess they could make selling, giving, and losing chips illegal.

If I can get a physical MintChip from someone else, I could get cash too... ???

One could carry 2 chips: 1 to pay, 1 for transferring excess money to. Anyways I guess except for some people who like fancy NFC applications, physical exchange of fiat value is not one of the strongest points of anything but cash money (100% no transaction fees, hard enough to fake for the average person, no limits, quite anonymous).

I personally don't even care that much about anonymity in digital currencies - I have bitcoin for that. My biggest and foremost concern is the chance to end up with less digital money than you paid in fiat money for whatever reason (reversed transaction, double spend reversal after the "Reset" by the bank/mint, horrendous fees, chips being invalidated and me unable to cash back out...). Who assures me that the Canadian Mint won't "do a Dwolla" and suddenly after some time start to reverse transactions or claim they were illegal/invalid after they happened? If this is somehow part of an e-money system I would even buy it if every coin has my face on it - as soon as I buy Bitcoins with it subsequently, it won't matter anyways any more.

I think this also shows the importance of developing physical Bitcoin devices that are cheap (or re-useable) and secure.

This is interesting! Let's say I have a MintChip account set up where I fund it via my bank account. I then have another MintChip account not linked to any banking institute. I transfer funds from the first account to the second one. How anonymous/pseudo-anonymous am I now?

~Bruno~

I doubt they will issue a MintChip not linked to any banking institute, but we shall have to see.

I guess you'd hardly be able to get one without any links to anything, but let's assume you have:
Latest 499 transactions of the "linked" chip later, the mint will know you sent X $ to the anonymous chip with ID#12345.
Also any purchase you make with that anonymous chip will likely reach the mint, even if you never ever reset your chip yourself.

You would need a 2nd "unmarked" chip where you transfer the funds from chip #1 and destroy that one afterwards. This way the mint only knows that X $ were sent to Chip #12345 but never got to know the transaction of X$ from #12345 to #23456. In the end though you will have to use that chip with someone who resets his/her chip eventually (merchant accounts for example are most likely even online 24/7) and depending on the transaction design it's likely that then you can backtrace all previous transactions to your "generation transaction" when you gave the bank X $ and received a chip for it. This could work similar to Bitcoin, where you can calculate for every coin that you get in which block it was originally generated.
As soon as all X $ from your generation transaction have reached the bank again, they could "prune" that transaction from their books (or in reality: archive them inhouse and at the NSA). I can only speculate what will happen if someone comes with another valid transaction originating from the same X $ generation transaction after already all X $ were spent - in Bitcoin it would be simply rejected, in MintChip (depending on fees and actual system design) they either won't care about these peanuts and write it off, won't find out because the system is badly designed or won't pay you, risking bad publicity.

* I used "mint" as "central authority" here, it could be a bank or a sub business from the canadian mint in reality. All of the above is speculation and might not reflect the actual system design at all.

You get it from someone one time and now you have anonymous money that you can use to pay anyone anywhere right? That's way different than cash.

I'm just saying if the chips don't require ID to use there isn't any way for anyone to be sure who is using it now.

You leave a much larger "paper trail" though, similar to an IP address. Maybe it can be compared with cookies/unique IDs on websites or the IMEI in GSM phones.

I don't think they are interested in exaclty tying 1 MintChip to 1 physical person but keeping tight profiles and the ability to be able to identify persons if needed or at least follow their paper trail seems to be in the system design. With cash this is also possible btw. but nearly no business I know of cares about logging serial numbers and logging which customer got which bill.

I don't think this has been posted yet, but here are devkit photos and some details.

http://burnsmod.com/development/2012/04/14/MintChip-DevKit-Pictures-And-Information/ (http://burnsmod.com/development/2012/04/14/MintChip-DevKit-Pictures-And-Information/)

First thing I'd do would be to give one of these µSD cards to my university for dissection... we have quite good crypto geeks there! :P

All in all though I am surprised how nice and well handled MintChip runs so far - developers post on their forums, no NDA for developers, some fun included and they didn't go berserk on the multiple Bitcoin posts that inevitably popped up on their site. Just sad that they don't expose all their backend + workings right away (and probably never will...) and they didn't release their API etc. as open source, but that might be a bit much asked from a mint.

http://www.winnipegfreepress.com/business/new-coins-causing-headaches-for-vendors-147422815.html


Now that (bold) is interesting!

http://mintchipchallenge.com/


~Bruno~

Sounds like a whole lot of new Bitcoin exchanges are being developed.  ;D

I wonder when we'll see this:

Due to the very high level of interest in Bitcoin, bitcoiners will no longer be able to submit ideas on its main forum outlining ways to make it more viable.

~Bruno~

High level of interest IIRC is > 500 registrations.  They only had 500 developer kits which were offered at no cost. 

The legal tender issue is an interesting one but I doubt it will have any practical impact.  Legal tender doesn't obligate someone from accepting currency in any specific form (for example the bank isn't required to accept a dump truck of pennies to pay off your mortgage).

As far as counterfeiting.  If the royal mint doesn't offer 1:1 exchanges even with inflation due to counterfeiting then I imagine the entire system fails.  Who would choose a chip which may lose 10% to 50% of its value due to no fault of their own when they can just keep using "cash" instead.

As far as what happens to the dollars my guess is that the brokers will be contractually obligated to hold in reserve 1 CAD for every 1 mintchip CAD token issued.   Similar laws exist for things like casino chips.  Casino must have $1 dollar in reserve for every $1 in chips held by customers or on the floor. Failure to meet the 1:1 ratio at all times can result in them losing their license.

For largest brokers if the system ever become widespread that means a significant amount of revenue from float.

I suspect that individual MintChips can be revoked (distinct from reversible). That would explain the 500 transaction limit (and record) before reset.

If I am correct, the $100 MicroSD cards in the dev kit will be worth $0 at the end of the contest period. It also makes counterfeit chips a very big problem. With the private key, you can transmit unlimited funds with no transaction limits. At least until 2 people get their mintchip reset (after 250 transactions on average) and the double spending is noticed. I assume businesses would be resetting their chips daily if not hourly.


Edit: "Those who do not understand Unix are condemned to reinvent it, poorly.
        -- Henry Spencer"

Remove Unix, insert Bitcoin :)

Actually, you picked exactly the wrong example of why legal tender laws don't matter. People are legally obligated to accept legal tender (even in ridiculous forms, such as a dump truck full of pennies) for the payment of debts (eg, taxes, mortgages, bills, etc) (however, non-legal tender may still be used to pay off debts if both parties agree to it). The reason for legal tender laws is that if someone refused to accept payment for a debt and the case went to court, the judge would be extremely annoyed to learn that the debtor actually is willing and able to pay his debt, and that his attempts to do so were refused for arbitrary reasons.

However, legal tender laws do not apply when the transaction is not a payment of a debt (eg, retail purchases, bank deposits, etc), so people are not obligated to accept legal tender in these situations (which includes most of the transactions that MintChip will be used for).

for example, if you are in a restaurant and have already consumed your meal, your are in debt and by legal tender laws he is required to accept it.

That is a mismoner.  No entity is required to accept legal tender in all forms (like for example a dump truck, or even any cash) they are just obligated to accept payment in some form of legal tender.  

As an example, my mortgage is held by a non bank entity.  They have no offices/locations open to the public and federal law prohibits mailing cash (in any form).  My old method of satisfying the debt is by check draft, money order, cashiers check, ACH, or bank wire.  That doesn't violate any legal tender statutes. Now if the "bank" demand payment in gold or chickens it would.  However them placing restrictions of what forms of payment they will accept are not unlawful.

The purpose of legal tender laws is to ensure that a debtor holding legal tender has SOME mechanism to repay that debt not to obligate creditors to asinine restrictions (like requiring they accept a dump truck of pennies).

Now the legal tender laws in Canada may differ.

From the source (US Treasury)

I picked that example on purpose.

I believe that Canada has a limit of 50 pennies for any single cash transaction.

Canada no longer uses pennies

but i'm still getting some back in my change, i think i might start paying cash to get my penny collection bigger lol! :D