[ANN] Satoshium: Minted Bitcoin

[alexkravets]

We are pleased to announce a new project Satoshium that reinvents physical bitcoin as something that is easily transferable among strangers.

Basically we are seeking to capture the experience of precious metals coins, with bitcoin.

My partner Thomas and I have been bitcoin holders since 2011 and have onboarded many different people in many different ways.
Web wallets, phone wallets, hardware wallets.

We found the onboarding process surprisingly difficult even with technically sophisticated users.
With naive users there really was no way to do onboarding without them trusting us.

Out of this experience was born Satoshium.

We have a whitepaper that describes the most important concepts.
There is a heavy focus on usability and also some novel security mechanisms.
We are seeking feedback for our whitepaper, collaborators, and funding.

Please get in touch if you have any feedback or would like to participate in other ways.

White Paper:   http://satoshium.org/satoshium.pdf
       Twitter:   http://twitter.org/satoshiumorg
     Website:    http://satoshium.org
      Memes:    http://satoshium.org/memes.html
      Reddit:     http://reddit.com/r/satoshium

[Cryptorials]

Looks interesting, I bought some opendime sticks for novelty value because I like the concept.

One thing that worries me though about things like this is that electronic hardware always carries a risk of failure which increases over time. I've never trusted hardware wallets because of this.

[alexkravets]

One thing that worries me though about things like this is that electronic hardware always carries a risk of failure which increases over time. I've never trusted hardware wallets because of this.

You make a fair point.

Satoshiums based on Java-card cryptoprocessors properly housed in a protective enclosure should have a fairly long shelf life because they remain inert and unpowered with no built-in power source, but only activated by an NFC interrogating device or a USB connection.

We address various hardware-failure scenarios including aging and Carrington Flare type events in the section 2.1 of the white paper.
Let me quote the relevant passage:

2.1 Security Considerations: Satoshium

A satoshium should have a shelf life of over a decade if it is heavily circulated, or longer if it is
sitting in climate controlled storage, however just as cash can be burnt so Satoshium can be
mechanically destroyed, therefore users should consider redeeming very old satoshiums.
There is about a one percent annual chance of a Carrington-type solar flare event that would
damage unprotected electronics on a worldwide scale. So the enclosure should include faraday
containment of the cryptoprocessor.

<end quote>

The standard answer given by hardware wallet guys is that once you made a backup,
the hardware of the hardware wallet is nearly disposable because the wallet is fully recoverable from a
paper or metallic back up.  

Satoshium has something we call "Secret Extraction" it's not meant to be a backup in the same way as hardware wallets,
but rather it's an advanced feature to deal with various edge case scenarios, one of which could be aging or various types of damage.

[Cryptorials]

One thing that worries me though about things like this is that electronic hardware always carries a risk of failure which increases over time. I've never trusted hardware wallets because of this.

You make a fair point.

Satoshiums based on Java-card cryptoprocessors properly housed in a protective enclosure should have a fairly long shelf life because they remain inert and unpowered with no built-in power source, but only activated by an NFC interrogating device or a USB connection.

We address various hardware-failure scenarios including aging and Carrington Flare type events in the section 2.1 of the white paper.
Let me quote the relevant passage:

2.1 Security Considerations: Satoshium

A satoshium should have a shelf life of over a decade if it is heavily circulated, or longer if it is
sitting in climate controlled storage, however just as cash can be burnt so Satoshium can be
mechanically destroyed, therefore users should consider redeeming very old satoshiums.
There is about a one percent annual chance of a Carrington-type solar flare event that would
damage unprotected electronics on a worldwide scale. So the enclosure should include faraday
containment of the cryptoprocessor.

<end quote>

The standard answer given by hardware wallet guys is that once you made a backup,
the hardware of the hardware wallet is nearly disposable because the wallet is fully recoverable from a
paper or metallic back up.  

Satoshium has something we call "Secret Extraction" it's not meant to be a backup in the same way as hardware wallets,
but rather it's an advanced feature to deal with various edge case scenarios, one of which could be aging or various types of damage.

Good answer, and good luck making it happen.

[Cryptorials]

If you need funding and want to encourage participation have you considered using something like wings.ai?

They have a competition at the moment, so if you list your project in their alpha version http://alpha.wings.ai/ you can win free consulting for the legal issues and so on of crowdfunding when they launch for real, and I think there's a small BTC prize as well.

[alexkravets]

Some fun Satoshium Memes are here http://satoshium.org/memes.html

[nemgun]

As of the ferengi in the /memes page, i would like to ask you if you are related to the gold plate latinum developer ?
By the way, could you please be more specific about the development roadmap ? are you going to release an ICO ? will you ever need funds ? and how do you think you will ask for them ? or maybe you will self fund ?

[alexkravets]

As of the ferengi in the /memes page, i would like to ask you if you are related to the gold plate latinum developer ?

We are not related.

By the way, could you please be more specific about the development roadmap ? are you going to release an ICO ?
will you ever need funds ? and how do you think you will ask for them ? or maybe you will self fund ?

We have a fairly aggressive roadmap, where given appropriate funding (we have various budget levels)
we could bring Satoshium to market and start selling the blanks (or loaded coins in those jurisdictions where regulation permits, i.e. China )
within 6 to 9 months.

Our next step is to pitch the project to Bitcoin-savvy investors (once they notice and start messaging us
We are basically looking for "Prince Charmings" to accelerate the project.

We could also self fund, but in that case things will take significantly longer
 
IMHO, ICO is not something that makes sense here.

Cheers ...

[Patatas]

1.Is this still a concet or a step is taken forward to write code ?Since the github page has nothing but your static website.
2.Is the coin designed yet ? Any blue prints ? Or still the project is in it's preliminary stages?
3.How many coins are you planning to print on the first release ? IPO is a great idea but not sure if you will be able to deliver the coins on time if at all your project blows up!
4.Instead,self funding/finding 2-4 investors will speed up the process.

[savioroshan]

Nice concept.Really hats off to you guys. Definitely its going to become large.It will help  bitcoin reach to large masses.There are many people who doesnt know to deal with this software thing. But your physical bitcoin thing will help many people atleast to test bitcoin like my grand parents who only know to deal with fiat currency. Hope you will get investors for this wonderful project very soon. All the best for your wonderfull project.

[alexkravets]

Hi, see responses below:

1.Is this still a concet or a step is taken forward to write code ?Since the github page has nothing but your static website.

We have some in-house code prototyping and we also would rely on a few open-source libraries, however at this point,
we would be ashamed to put out the code for public review.

However, in the long run, all the code will be made BOTH public and buildable deterministically ( similar to how Bitcoin Core is built )

See paper section 5.2.2 Platform Integrity http://satoshium.org/satoshium.pdf

2.Is the coin designed yet ? Any blue prints ? Or still the project is in it's preliminary stages?

Still in preliminary stages, aside from conceptual design and some experimentation with JavaCard crypto processors.
Note that different denominations will have different physical measurements and different visual designs (for collectability).

3.How many coins are you planning to print on the first release ? IPO is a great idea but not sure if you will be able to deliver the coins on time if at all your project blows up!

There's certain smallest minimum batches that contract manufacturers would be willing to manufacture. We estimate first batch to be 10,000+

4.Instead,self funding/finding 2-4 investors will speed up the process.

We couldn't agree more ... where are you Prince Charming ? :-)

[standardcrypto]

Satoshium has something we call "Secret Extraction" it's not meant to be a backup in the same way as hardware wallets,
but rather it's an advanced feature to deal with various edge case scenarios, one of which could be aging or various types of damage.

Thomas here.

In short, backups are permitted but somewhat hidden / discouraged. Backup, or as we call it "secret extraction" is covered in section 2 of the Appendix.

There are two use cases for a backup. One, recovering a stuck redemption. The other is for value extraction, where the user is concerned about hardware failure and doesn't care about circulating the satoshium.

Of course, a backed up satoshium is non transferable.

In my experience, many users find backups anxiety provoking, and hide them so well that they forget where they were stashed. So, we allow backups for those that want them but do not see them as a primary usage mode.

[Henkkaa]

I just do not feel like bitcoin as a physical coin/bill will work at the current state. It was made for anonymity and cheap transactions, not to be used as physical currency. However this is something I will buy anyway since I like having a nice collection of physical bitcoin stuff   . Already bought a Satoshi note and a 3-pack of Opendime sticks. Maybe sceptical people and total newbies to bitcoin will want to use these on a regular basis, but I just simply prefer fiat over physical btc when doing my day-to-day purchases.
Cheers!

[cryptoheadd]

This looks pretty impressive.
Do you guys have a design or a price in mind?

Which materials are you planning to use to mint the physical coin?
Because the precious metals might not seem affordable to everyone. If you're planning to mint 10,000+ units in your first batch, I'd recommend using Brass.

Using a cryptoprocessor to lock
secrets in a tamper secure way is also far safer than using an easily tampered hologram (e.g.
Casascius) or a scratch-off (e.g. Little Bit of Coin)

I see that you are going to use a cryptoprocessor along with an NFC tag/chip.
Can you share some more information about the cryptoprocessor?

Inscription: Generate a bitcoin secret (private key or seed mapping to private key) unknown
to the minter but using entropy provided by the minter, with probabilistic evidence that no
cheating occurred. Optionally, the minter can view an audit report in which she can verify
the entropy she provided was probably used in the bitcoin secret. The minter can enforce an
arbitrarily high probability that her entropy was used, with more certainty requiring more
time during the inscription phase.

Do we need to use your application to generate a key, or can we generate one ourselves?

Watching.


Also, you might want to post it here: https://bitcointalk.org/index.php?board=217.0
I'm sure there'll be a lot of interest.

[alexkravets]

I just do not feel like bitcoin as a physical coin/bill will work at the current state. It was made for anonymity and cheap transactions, not to be used as physical currency. However this is something I will buy anyway since I like having a nice collection of physical bitcoin stuff   . Already bought a Satoshi note and a 3-pack of Opendime sticks. Maybe sceptical people and total newbies to bitcoin will want to use these on a regular basis, but I just simply prefer fiat over physical btc when doing my day-to-day purchases.
Cheers!

Let me point out that at this stage we are NOT arguing for using Satoshium for cash-like physical currency transactions.

We simply wish to ease onboarding and savings into Bitcoin for your average "dentist" and "lawyer" by providing Bitcoin with User Experience of Gold and Silver coins. The idea here is to allow trustless onboarding and occasional redemptions and re-sales while relieving the end user of all the mental overhead and low level protocol details of Bitcoin such as: addresses, public/private keys, transactions, confirmations, change, fractional amounts, secrets, backups or pin numbers.

Would you rather give your second cousin a satoshium or a paper wallet with some weird looking QR codes and Bitcoin "public" and "private" keys ?

The question is rhetorical. We created Satoshium as trustless onboarding mechanism, which allows people to simply hold and eventually redeem or resell their bitcoin without having to either trust the onboarder or ask for help in selling or redeeming their bitcoin later.

Cheers ...

[alexkravets]

This looks pretty impressive.

Thank you !  

Do you guys have a design or a price in mind?

If you're asking about visual designs, we do have an idea for our first 12 denomination series of coin.

We're in the early days of industrial design, so at this point we have not  yet determined if we can make these tokens out of metals or we will be forced to use non-metallic tokens due to Faraday effects blocking NFC.

We don't have a clear picture on pricing yet for similar reasons, but we would like to be competitive with existing solutions such as low end hardware wallets like ledger hw1, the btcc bitcoin tokens and open dime.

However, we may also charge a premium for the usability and security advantages that we bring to the table.  

TL;DR: more work is needed and we are still figuring pricing out.

Which materials are you planning to use to mint the physical coin?
Because the precious metals might not seem affordable to everyone.
If you're planning to mint 10,000+ units in your first batch, I'd recommend using Brass.

Brass is a good idea. We are not wedded to using precious metals to manufacture Satoshium. Lower denominations might even use casino-chip like plastic.

Using a cryptoprocessor to lock
secrets in a tamper secure way is also far safer than using an easily tampered hologram (e.g.
Casascius) or a scratch-off (e.g. Little Bit of Coin)

I see that you are going to use a cryptoprocessor along with an NFC tag/chip.
Can you share some more information about the cryptoprocessor?

We plan on using a Java-card compatible cryptoprocessor with a secure element.
See top of page 6 of the white paper for details.

Inscription: Generate a bitcoin secret (private key or seed mapping to private key) unknown
to the minter but using entropy provided by the minter, with probabilistic evidence that no
cheating occurred. Optionally, the minter can view an audit report in which she can verify
the entropy she provided was probably used in the bitcoin secret. The minter can enforce an
arbitrarily high probability that her entropy was used, with more certainty requiring more
time during the inscription phase.

Do we need to use your application to generate a key, or can we generate one ourselves?

Great question !

The secret must be UNKNOWABLE even to the minter, otherwise the coin can never be "Minted" i.e. transferable to other people since the creator of the secret can never be trusted not to steal the bitcoin later :-)

Lack of unknowability of the secret is what has prevented most prior attempts at physical Bitcoin from circulation (or at least occasional transferability and re-sellability)

However, Satoshium provides a novel protocol to guarantee that the *entropy* ( but not the secret! ) provided by the minter was used in the secret generation. This assures the minter that Satoshium DEVELOPERS can never know or predict the secret and therefore the secret truly remains unknowable which allows the coin to be transferable.

Note, we do provide for a "Secret Extraction" but doing so irreversibly invalidates the "Minted" status and at that point the coin can only be redeemed but not transferred (until it's erased and and re-minted with a different inscription and proof of fundedness again, i.e. satoshium is re-usable !)

[Emerge]

Interesting... I would wonder how you and your partner will be able to pull this off,  but I will be watching

[chronicsky]

looks kind of interesting , watching

[cryptoheadd]

We don't have a clear picture on pricing yet for similar reasons, but we would like to be competitive with existing solutions such as low end hardware wallets like ledger hw1, the btcc bitcoin tokens and open dime.

Brass is a good idea. We are not wedded to using precious metals to manufacture Satoshium. Lower denominations might even use casino-chip like plastic.

Sounds good.

We plan on using a Java-card compatible cryptoprocessor with a secure element.
See top of page 6 of the white paper for details.

The most important job of the cryptoprocessor is to control access to bitcoin secrets, such that they
may never be revealed when the satoshium has minted status.

I get that, but how will the Java processor interact with the NFC tag/chip?

The secret must be UNKNOWABLE even to the minter, otherwise the coin can never be "Minted" i.e. transferable to other people since the creator of the secret can never be trusted not to steal the bitcoin later :-)

Lack of unknowability of the secret is what has prevented most prior attempts at physical Bitcoin from circulation (or at least occasional transferability and re-sellability)

Note, we do provide for a "Secret Extraction" but doing so irreversibly invalidates the "Minted" status and at that point the coin can only be redeemed but not transferred (until it's erased and and re-minted with a different inscription and proof of fundedness again, i.e. satoshium is re-usable !)

Never seen this before. Sounds good.
What's the current status of your project?

Interesting... I would wonder how you and your partner will be able to pull this off,  but I will be watching

I agree. If you need any help, send me a PM.

Good luck.

[becoin]

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