Single-use coupons for printing value / online+offine party transaction

[Kireji]

I'd like to see a way for an offline spender and an online receiver to conduct trade with bitcoins.  After a discussion in the bitcoin-dev irc, I wanted to write up the idea and get feedback.  Thanks to sipa, lfm, iz and others for feedback.

NEED:
I want to be able to walk into a store, like a grocery store, given them something physical, and have them (online) process a transaction that pays for my goods.

I want this to not require any plastic, or any scratch-off, or the involvement of some other service provider.


HOW IT COULD WORK:
You print single-use coupons attached to a given address keypair encrytpted with a secret pin number.  Almost identical to what is described here
http://forum.bitcoin.org/index.php?topic=8091.0#msg121177

Longer description (random details used, but don't really matter):
User tells the client to create a single use coupon for <amount>.  
There is a transaction, transferring <amount> to a new keypair
The transaction is accepted into the blockchain
Client asks for a 6 digit pin
The private key is symmetric encrypted with the pin (gpg -c/CAST5)
The client then makes a machine readable, printable output, like a coupon that encodes
pin-encrypted the private key
User can then print off the coupon (later coupons, several 5,10,and 20 uBTC notes) - carry
them in your wallet
At the store, you give the notes to the clerk, he scans them, getting the encrypted data
User puts in the pin
the register now checks the pubic key against the block chain to validate it has not been spent, if not they attempt a transaction from that account to theirs.  If it is accepted, they release the goods.


THOUGHTS:

The machine readable part is tough.  there would need to be a standard to read whatever system we make to read the information from the coupons.   cue-cat-eque readers here would help.

the pin makes stealing the coupons unattractive.  you would have wrench hack the holder to get a pin to make using them possible.

losing the coupons is a problem, but with a long enough pin, the user could invalidate them before it was guessed by spending them yourself.


FEEDBACK
This is just an idea at this point, I'd love to hear feedback or poke holes in it, or improvements

[raccoon]

Would I have to wait in the store for 10 minutes to an hour for them to get block confirmation?  That's one of the problems with any offline system, is trust that you won't run back home and invalidate the 'coupon' before the merchant can.

Technology wise, a lot would have to happen of course.  Typical laser scanned 1D bar codes would not be sufficient to support such a long key.  Data matrices such as QR-Code would work, however, that would mean CCD based photo-scanning hardware at the merchant.  Even if Walmart or BestBuy were to take initiative, the upgrade will cost an easy million$ or 10 to reach all of their outlets.

It would be best to piggyback on Google's (et al) mobile payment systems, where the providers are willing to give away free hardware to get their standard recognized first.

[error]

You have to conceal the private key, or someone can just scan it while you aren't looking and spend your bitcoins before you can.

[joan]

You have to conceal the private key, or someone can just scan it while you aren't looking and spend your bitcoins before you can.

In the OP scheme, the private key is encrypted and a 6-digit pin code is required to decrypt.
I think it's a good strategy… All it needs at the grocery's end is a QR reader + crypto program + bitcoin client that can import a key pair into a wallet. All this could be packed on an Android phone at some point.
The issue of the block confirmation wait is a tough one though.

[error]

The issue of the block confirmation wait is a tough one though.

What issue? There is no need to wait for confirmations in a retail scenario.