ok so i had an idea for how stores can offer bitcoin purchases.
This concept seems best targeted to chain stores, as it requires a well connected pos server and custom coding on their part. If it becomes standardized; however it may work out better. In general this concept will use a secure smartphone app, and software running on the chains pos server.
After I had thought of this idea I found this -
http://www.androidzoom.com/android_applications/finance/bitcoin_zsuj.html This seems to have a similar concept; however my concept is very specific. The description on that site seems fairly ambiguous, and directed
towards individual to individual transactions.
Lets use Wal-Mart as an example...
So walmart decides to accept bitcoins, They set up in their server farm a bitcoin specific server. This server acts as a bitcoin transaction processor as well as an extremely well connected node. This is important as to minimize the transaction processing time. Now an individual has an app on their phone, this app is basically the desktop app. It holds their bitcoins in a secure wallet that is encrypted on the device.
Walmarts server is responsible for a few things, generation of a recieve address, noting the correct dollar amount, encoding the recieve address within a qr code, and transmitting code to the display on their pos.
So how it would work in an everyday example is as follows:
customer is checking out, says would like to pay with bitcoin. Here it splits into the front end and back end. In the front end the cashier selects bitcoin as the payment method, a qr code appears on the display where one would normally sign, shopper scans with camera phone confirms the dollar amount and taps ok, and finally it processes and approves.
On the back end it becomes more complicated, but is still no more complicated than a standard credit card transaction. The key press triggers the pos system to initiate a receive, the system then generates a new address for a receive, it encodes the address and some additional details into a qr code, and transmits it to the display. When the smartphone takes the picture and confirms the amount this will work exactly like in the desktop app when send coins is clicked. The app interprets the send address, a dollar amount, and a confirmation code. The app presents the confirmation screen with a dollar amount to pay and an ok button. When ok is clicked the bitcoin is transmitted as usual. A new confirmation code is then generated for the cashier to key in to the register.
A qr code can accommodate up to 4296 alphanumeric characters. This should be sufficient to accommodate all the data needed to process a transaction quickly.
Now here is where I run into a problem; however, so we have a confirmation code from the server and a confirmation code generated by the phone and displayed. A secure method to calculate the second confirmation code needs to be devised. I imagine an algorithm to calculate the new confirmation code should work, but what is needed is a way that the store can receive a confirm able code to ensure the payment was sent.
ok lets say the store takes the payment amount omitting the decimal and the confirmation code and multiplies them together and then divides them by the first numeric digit occuring in the receive address. for example purchase is 20.59 confirmation code is 72345622 and first digit is 2.
This means the final confirmation code would be 74479817849 this is the total of the math, and the confirmation code would be the first 8 digits. This is something that could be kept a secret formula of the system only, but if someone discovered it that could lead to massive fraud. This is why I believe it must be much more secure than above. This would need the help of someone with better math skills than me.
Thankfully at some point in the future the network could be fast enough that transactions post and confirm instantly rendering the confirmation codes needless.
But on the consumers end this takes no longer than a traditional bank card transaction, as a matter of fact there could be no confirmation needed under say 25 dollars, just like credit cards. just scan click ok and go.
So thats my concept, I have no way to implement it myself, but I would love some opinons or conversation about how plausible this concept is..
