Physical bitcoin - Is this the future?

[bncbnc]

A lot of people don't trust bitcoin because I can't touch his hands. In most people, there is now a Bank card, but this does not negate the use of Fiat. It seems to me that if there was a gold bitcoin it would be the most reliable and popular currency in the world.

diamond is more precious than gold but still people are welling to have, because they do no have the opportunities to use it for trading and making money. but in fact people like and welling to have bitcoin, because they have the facilities to use bitcoin for trading and making money. they can use bitcoin for  a lot of purposes, they can use it for trading for transaction purposes, for gambling and for using as cash in online shops and in some places can use in fiat shops for shopping.

[1715548218]

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[1715548218]

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[Bla2e]

So in short you are saying to have Bitcoin (a digital good) to be converted into a physical good & then exchange.

Sorry, it will fail big time.

Isn't this already present ? (Hint: Real cash & the money in your bank).

[ethereumhunter]

i think for physical bitcoin is a good idea but this is just like a fiat which have physical form. if its like this, bitcoin is the same as fiat and fiat will not be used again in future. because in the future, i am sure that every country, every places will have internet connection which help us to use bitcoin so people will not difficulties to connect with internet. i think people don't have to know details about bitcoin, they only need to use bitcoin as the payment.

[7jaka7]

First of all, let me explain why I am so enthusiastic about physical form. If tomorrow FIAT bubble would burst people wouldn't swap to crypto currencies. WHY? Because you are paying fees which are too high and you can't buy bread with this everyday, because everything is digital (elderly people just can't use this, people with no computer, phone can't use it....). So If we want to make Bitcoin useful for everyday life we need to make things much better and practical. So don't get me wrong I think that whole Bitcoin/blockchain technology is amazing.

I know physical coins are already existing! But they are far from what I had in mind. Some of them are just to expensive for manufacturing. And no one hasn't explain how their security system is working (I will research when i'll have time).

And I'm not saying we should only switch to physical form, we have digital and paper money in FIAT too. But we would take reverse path going from digital to paper form. Paper money is actually very useful, easy to handle, doesn't need internet, doesn't need electricity, works every time. And again comparing it to bitcoin there are no fees for transaction whatsoever and you don't wait even a second to get transaction confirmed. (yes, BTC will get better with this, yes there are other cryptos i know this)

As I have seen till now most of BTC community is totally against physical form of BTC and immediately comparing it to FIAT system.
First of all paper money is not the same as FIAT. Banks/government can make money out of thin air either it is in paper form or digital form. No one can make bitcoins! So there is a big difference and learn it! https://en.wikipedia.org/wiki/Fiat_money

Till now i have came up with two different forms:
1. Physical coins as we know it today you get public and private key on same coin. The problem with this is security: How can we know that previous user didn't scam us or any user before him? This kind of money would be possible if we would came up with genius idea how to make really secure coin. (As described in first post)

2. Representative money. ''Representative money is any medium of exchange that represents something of value, but has little or no value of its own. Unlike fiat money (which may or may not have anything of value backing it), to be a genuine representative money, there must always be something valuable supporting the face value represented.'' source: https://en.wikipedia.org/wiki/Representative_money.

So we make similar money as today FIAT (few security systems which prevent counterfeiting), it would have it's serial number so the institution making this money can track the paper notes and verify their credibility. What would be different is that you would actually have public key of Bitcoin address on it. On this Bitcoin address there would be exact amount of BTC as paper note is representing. Anyone could check this if he has electricity and internet. So actually every time you would buy something with that paper note shop/seller could verify that there is really BTC backing it up.
So here comes the problem! Centralization! Private key would be held by institution issuing this paper notes. So you actually don't own BTC as much as you can. This would be a big downside, but I don't see it as such a big problem. One big advantage is that you only need to trust issuer of the money, not everyone who were using it before you (as in case of physical bitcoin with private key included). Another advantage could be recovering of lost money so in case you would lost paper note you could get BTC back. But I don't know the solution how this would work, because anyone could just come to issuer and say he lost money... Please give some ideas. (maybe another blockchain?)
There can be many issuer of this paper notes and if someone scam you can get another one who doesn't. This would be sorted naturally.

Anytime you would want to convert your paper notes into digital form, you can sell that paper back to issuer and he can send you same amount on your wallet address. Or you could just sell it to anyone willing to buy.

Issuer would make money with selling BTC for a bit higher price then it is at the moment of buying paper notes. He could use minimal or even zero fees (no need to hurry) to make deposit on that address which would then be represented by paper note.

So from now on please don't just tell this is stupid idea in general, give some solid explanation why it is so bad or try to be positive and find solutions for problems which occurs.

[mindrust]

On chain transactions make bitcoin worthwhile, it is not the other way. Trading private keys from hand to hand is the same thing as trading gold coins. The thing is gold has value because of its historic preciousness.

Bitcoin is no gold. If we won't be able to send bitcoins on-chain, it will only serve as Tulips. Tulips which has no real use, no value, nothing but only speculation.

If the problems about the high fees don't get solved, this is what we are going to have, another "tulipmania".

[7jaka7]

On chain transactions make bitcoin worthwhile, it is not the other way. Trading private keys from hand to hand is the same thing as trading gold coins. The thing is gold has value because of its historic preciousness.

Bitcoin is no gold. If we won't be able to send bitcoins on-chain, it will only serve as Tulips. Tulips which has no real use, no value, nothing but only speculation.

If the problems about the high fees don't get solved, this is what we are going to have, another "tulipmania".

Transations would be on blockchain too, majority of them. What you are saying is like hardwallet with 100 Bitcoins is worth nothing. If I buy that exact hardwallet.
You don't think this could work in any case?

[deisik]

On chain transactions make bitcoin worthwhile, it is not the other way. Trading private keys from hand to hand is the same thing as trading gold coins. The thing is gold has value because of its historic preciousness.

Bitcoin is no gold. If we won't be able to send bitcoins on-chain, it will only serve as Tulips. Tulips which has no real use, no value, nothing but only speculation

As to me, that's outright bullshit

Transacting bitcoins via blockchain neither gives nor takes anything from it being a tuliplike asset (or not being it). In fact, I'm curious what you can base your claims on. You can just exchange physical bitcoins for goods and services and that would be real usage (i.e. Bitcoin as a currency), while you can endlessly send bitcoins over the network and that would mean nothing (apart from spamming the network). As an aside, gold is not tulips (even metaphorically), when you use gold as money it has value as money not as gold as such. But money is not required to have any intrinsic value (apart from transactional utility which makes a money token into money)

[Febo]

Fees are only current problem. And that is the only problem this solves. But it brings many other problems or way worse solutions as BTC already have. Actually it solve another problem, that many people are practically illiterate.  Just today i read in newspaper that 30% of people from 18-65 years cant use ATMs for credit cards. They easily pay in a store with credit card since there is a cashier that helps them but they cant do it on their own on ATM.

So solve 2 problems but brings many new.
This BTC would be centrally stored and people that would owned this "bitcoins" (paper wallets) would not be able to empty wallet and thy should trust issuer off this bitcoins.
This BTC could not be divided. You would have let say 0.01 BTCs. Or maybe you could have all range of this wallets to have change back. ( so this would be doable, but would take huge amount of BTC to provide liquidity).



Why dont you try it?  Just get some BTC put them on different  paper wallet. In different amounts. 1BTC, 0.5BTC, 0.2BTC, 0.1BTC, 0.05BTC, 0.02BTC, 0.01BTC, 0.002BTC, 0.005BTC, 0.001BTC, 0.0005BTC, 0.0002BTC, 0.0001BTC. Somehow secure you dotn get hacked and someone steals all your BTC from all your paper wallets. That would be your biggest fear. Or fear of those that will hold your "bitcoins" ( paper wallets)

[beerlover]

i think for physical bitcoin is a good idea but this is just like a fiat which have physical form. if its like this, bitcoin is the same as fiat and fiat will not be used again in future. because in the future, i am sure that every country, every places will have internet connection which help us to use bitcoin so people will not difficulties to connect with internet. i think people don't have to know details about bitcoin, they only need to use bitcoin as the payment.

If start using physical bitcoin then I think what will be the difference between traditional currency and bitcoin. The beauty of the bitcoin is digital figure and its use through online purchasing and payments against services etc. So, I think we should have to provide internet for to make it common and I think there may not be a single country who do not have the facilities of using internet, even internet is almost present everywhere.

[NJB18]

It would be absurd really. Satoshi Nakamoto didn't create bitcoin just to be made exactly like fiat money in the days to come. That would betray the real essence of a digital currency.

And then there was an attempt that foiled. That didn't click well. Bitcoin, as it is, has been praised and appreciated by many for what it is. Why change it, then?

Things will really go complicated if we turn bitcoin into a physical currency. The intensity might cause the entire bitcoin market to crash.

[OVOBTC]

No, The future isn't with physical coins IMO but with hardware wallets, which you can use in a better way than even credit cards.
Physical bitcoins are just a novelty, since you don't need a physical coins if you are using bitcoin and it would be a big step back if you consider it better than creditcards and other methods using a physical item but reusable unlike paper money (and physical bitcoins).

[Yuhee]

i think for physical bitcoin is a good idea but this is just like a fiat which have physical form. if its like this, bitcoin is the same as fiat and fiat will not be used again in future. because in the future, i am sure that every country, every places will have internet connection which help us to use bitcoin so people will not difficulties to connect with internet. i think people don't have to know details about bitcoin, they only need to use bitcoin as the payment.

If start using physical bitcoin then I think what will be the difference between traditional currency and bitcoin. The beauty of the bitcoin is digital figure and its use through online purchasing and payments against services etc. So, I think we should have to provide internet for to make it common and I think there may not be a single country who do not have the facilities of using internet, even internet is almost present everywhere.

Maybe a fiat equivalent? Because what's the use of digital currency if there is any in the physical world. It is good that it can be converted but i think its weird if it will be brought up live. For it is better to mine in the web than in the physical. Sure it would cost electricity but many alternate electricity can be made to further compliment mining. The future is the internet so it is but right to have some currency designed for the web.

[Juggy777]

No I don't think so it shall happen, look at your disadvantages points, CENTRALIZED, if we all wanted it why would we use Bitcoins at all. You really haven't understood Bitcoins at all. Yes the fees are a pain no doubt about that, but that doesn't mean we shall opt to make it centralized, that would be suicidal, so for that very reason I have voted no, as I don't like the idea of this whole concept and it's very long post that you have written but there seems no real merit to support your idea, maybe others shall find different views

[hisuka2987]

No, this is the past and even funny to consider using physical coins with gold covering to pay for something that can be done digitally, if you ever used a new trezor you will see how easy it is to conduct a transaction with it (just scanning a QR), Paying with a physical "coin" is repetition of history, rather than the future.

[Windpower]

I definitely do not think that physical Bitcoin is the future. First of all, Bitcoin was made to be a pseudo-anonymous currency, if we use physical Bitcoin, then we completely ruin this. Also, real life transactions bring up the risk of theft. To add onto that, it is a lot harder to store your Bitcoin if it is something that is physical. It is the same as cash, you would need something like a bank and once again, that would ruin the point of Bitcoin which is that you can be your own bank. Another problem would be that it would be really hard to use and store small amounts of Bitcoin. I just really don't see physical Bitcoin ever taking off and it is definitely more of a collectible item.

[jorneyflair]

OP, nice points.

The thing is, how are you going to trustlessly exchange private keys with physical bitcoins? Sure, there might be manufacture's stickers on a physical coin. Sure, the manufacturer is well known and the risk of getting a "dud" is almost astronomical, but the whole point of using bitcoin is eliminating these sort of things from happening. When you're receiving physical bitcoins from someone, you are not receiving something fungible. Just like paypal funds, the actual value of these funds depend on the user's trustworthiness, its origin and so on.

Unless a way is found to address this trustless issue, it's not going to become a mainstream type of bitcoin transacting method. You could think of high transaction fees as compensation for miners to provide this trustless service, in a sense.

[7jaka7]

Fees are only current problem. And that is the only problem this solves. But it brings many other problems or way worse solutions as BTC already have. Actually it solve another problem, that many people are practically illiterate.  Just today i read in newspaper that 30% of people from 18-65 years cant use ATMs for credit cards. They easily pay in a store with credit card since there is a cashier that helps them but they cant do it on their own on ATM.
So solve 2 problems but brings many new.
This BTC would be centrally stored and people that would owned this "bitcoins" (paper wallets) would not be able to empty wallet and thy should trust issuer off this bitcoins.
This BTC could not be divided. You would have let say 0.01 BTCs. Or maybe you could have all range of this wallets to have change back. ( so this would be doable, but would take huge amount of BTC to provide liquidity).
Why dont you try it?  Just get some BTC put them on different  paper wallet. In different amounts. 1BTC, 0.5BTC, 0.2BTC, 0.1BTC, 0.05BTC, 0.02BTC, 0.01BTC, 0.002BTC, 0.005BTC, 0.001BTC, 0.0005BTC, 0.0002BTC, 0.0001BTC. Somehow secure you dotn get hacked and someone steals all your BTC from all your paper wallets. That would be your biggest fear. Or fear of those that will hold your "bitcoins" ( paper wallets)

My answer:

If tomorrow FIAT bubble would burst people wouldn't swap to crypto currencies. WHY? Because you are paying fees which are too high and you can't buy bread with this everyday.

I think it is better for other things too. Future: You are going home from work, you see you need to refill your gas. Your phone runs out of battery and you are broke in that moment. What would you do?

Anytime you would want to convert your paper notes into digital form, you can sell that paper back to issuer and he can send you same amount on your wallet address. Or you could just sell it to anyone willing to buy.

I will probably try it, but with fever BTC.
***********************************

It would be absurd really. Satoshi Nakamoto didn't create bitcoin just to be made exactly like fiat money in the days to come. That would betray the real essence of a digital currency.
And then there was an attempt that foiled. That didn't click well. Bitcoin, as it is, has been praised and appreciated by many for what it is. Why change it, then?
Things will really go complicated if we turn bitcoin into a physical currency. The intensity might cause the entire bitcoin market to crash.

My answer:

As I have seen till now most of BTC community is totally against physical form of BTC and immediately comparing it to FIAT system.
First of all paper money is not the same as FIAT. Banks/government can make money out of thin air either it is in paper form or digital form. No one can make bitcoins! So there is a big difference and learn it! https://en.wikipedia.org/wiki/Fiat_money

I don't think it would betray the real essence of digital coin.

If tomorrow FIAT bubble would burst people wouldn't swap to crypto currencies. WHY? Because you are paying fees which are too high and you can't buy bread with this everyday.

Yes I know it would be complicated, but should we avoid complicated things, can't it become something good although it is complicated?
***********************************

No, The future isn't with physical coins IMO but with hardware wallets, which you can use in a better way than even credit cards.
Physical bitcoins are just a novelty, since you don't need a physical coins if you are using bitcoin and it would be a big step back if you consider it better than creditcards and other methods using a physical item but reusable unlike paper money (and physical bitcoins).

My answer:
Yes, hardware wallets can be really useful. But first Bitcoin need to change/improve some things.
***********************************

No I don't think so it shall happen, look at your disadvantages points, CENTRALIZED, if we all wanted it why would we use Bitcoins at all. You really haven't understood Bitcoins at all. Yes the fees are a pain no doubt about that, but that doesn't mean we shall opt to make it centralized, that would be suicidal, so for that very reason I have voted no, as I don't like the idea of this whole concept and it's very long post that you have written but there seems no real merit to support your idea, maybe others shall find different views

My answer:
As I mention it few times, yes I know it is centralized. But imagine if country would be doing this would they get any benefit from it? If they would make paper money which would be backed up by Bitcoin? For every 1000 Satoshis there would be private key directly linked with that papper and it would have 1000 Satoshis on it.
+ For everyone, you still know how many centralized system we got? And you trust them without even noticing anything? All products today all more or less centralized, you have to trust the one who is making that product: food, money, water, soap, computers... Now after bitcoin you would trust even 1 institution on whole world?
***********************************

No, this is the past and even funny to consider using physical coins with gold covering to pay for something that can be done digitally, if you ever used a new trezor you will see how easy it is to conduct a transaction with it (just scanning a QR), Paying with a physical "coin" is repetition of history, rather than the future.

My answer:

If tomorrow FIAT bubble would burst people wouldn't swap to crypto currencies. WHY? Because you are paying fees which are too high and you can't buy bread with this everyday

***********************************

I definitely do not think that physical Bitcoin is the future. First of all, Bitcoin was made to be a pseudo-anonymous currency, if we use physical Bitcoin, then we completely ruin this. Also, real life transactions bring up the risk of theft. To add onto that, it is a lot harder to store your Bitcoin if it is something that is physical. It is the same as cash, you would need something like a bank and once again, that would ruin the point of Bitcoin which is that you can be your own bank. Another problem would be that it would be really hard to use and store small amounts of Bitcoin. I just really don't see physical Bitcoin ever taking off and it is definitely more of a collectible item.

My answer:
If you would prefer you could only use digital form of BTC. You could store big amounts in digital form and use physical form of them only for small purchase.
Storing small amounts? You could get paper note with 10 Satioshis on it.
***********************************

OP, nice points.
The thing is, how are you going to trustlessly exchange private keys with physical bitcoins? Sure, there might be manufacture's stickers on a physical coin. Sure, the manufacturer is well known and the risk of getting a "dud" is almost astronomical, but the whole point of using bitcoin is eliminating these sort of things from happening. When you're receiving physical bitcoins from someone, you are not receiving something fungible. Just like paypal funds, the actual value of these funds depend on the user's trustworthiness, its origin and so on.
Unless a way is found to address this trustless issue, it's not going to become a mainstream type of bitcoin transacting method. You could think of high transaction fees as compensation for miners to provide this trustless service, in a sense.

My answer:
As I explained in one of my posts before, I think this is really big security problem (having private key on physical form). So

2. Representative money. ''Representative money is any medium of exchange that represents something of value, but has little or no value of its own. Unlike fiat money (which may or may not have anything of value backing it), to be a genuine representative money, there must always be something valuable supporting the face value represented.'' source: https://en.wikipedia.org/wiki/Representative_money.

So we make similar money as today FIAT (few security systems which prevent counterfeiting), it would have it's serial number so the institution making this money can track the paper notes and verify their credibility. What would be different is that you would actually have public key of Bitcoin address on it. On this Bitcoin address there would be exact amount of BTC as paper note is representing. Anyone could check this if he has electricity and internet. So actually every time you would buy something with that paper note shop/seller could verify that there is really BTC backing it up.

It doesn't have to be a big part of whole bitcoin system only 1% could be in physical form. And this paper notes (representative money) could be product locally.

[Febo]

It seems your idea was just stolen: https://news.bitcoin.com/bitcoin-smart-banknotes/

Maybe you should ask them for some notes.

[krixi]

I agree with you, bitcoin has its own disadvantages and disadvantages

[Dmitry.Vastov]

I am exploring blockhain technologies for about 3 months now. So there are a lot of things I don't understand very good yet. These are all my opinions and solutions for problems I present might have been found already.

As I have seen these past months blockhain technology shows huge potential but there are still a lot of improvements needed in this technology.

One of the problems is network fees. All or at least majority of videos/presentations of Bitcoin are offering us zero or very low fees. As the Bitcoins price and number of transactions raised significantly these fees became pretty high.1 They are not like impossible high so the Bitcoin isn't affected by this too much. And for big transactions these fees are still very small. Let's say there is 3$ fee worth of BTC, if you are sending 1 BTC the fee is still nothing -> less then 0,15% (BTC price = 2700$). As I have seen there are some ideas of solving these high fees 2 but these solutions doesn't seem to satisfy whole community so some problems with this may occur.

I see two major problems of ''high'' fees.
1. It is not good for advertisement of Bitcoin and what happens is a big doubt of new users and users which operate with low amounts of bitcoins.
2. Second problem is using bitcoins for everyday use. You just can't buy 2$ thing in shop and pay 5$ for it (2$+3$ fee).
Because these two reasons I think bitcoin is far from currency which we could use for everyday and would suit everyone, from poor regions to most developed countries.

So to get to the topic:
Physical bitcoin.
Physical bitcoin would completely solve this fee problem, as you don't transfer bitcoins/satoshis from one address to another, but instead you transfer the ownership of this address from one person to another. This would increase bitcoins usage a lot, at least I think so.
Physical bitcoin should contain public key and private key. Public key must be there so you can verify balance on this coin. Private key must be hidden and you could only see public key once - and with you seeing private key, coin would become worthless. So when someone ''opens'' (check private key) coin you should clearly see it is worthless, it must be like broken or something. 3
If we get safe and practical physical bitcoins this solves few problems. I will present some advantages and disadvantages of using physical bitcoin.

Disadvantages:
1. Safety - I have come across some ''stickers'' which are considered safe. It is possible to check if someone tried to use private key 4. It bothers me what happens if someone peel of the sticker and save private key, then he apply new sticker which looks exactly the same on the outside. So the coin have completely same look on the outside. He can sell/ pass it over and he has private key. I haven't researched a lot about this, so please tell me more about this if you know
2. Centralisation - there must be complete trust to manufacturer of the physical bitcoins. He can save private keys, make ''empty'' coins and probably other things he could do to scam you.
3. Bitcoin price - You have let's say physical bitcoin worth 0,01BTC. In the moment you spend it you must check it's price, this means there must be internet connection at the spot you are spending this bitcoin. This is not really big problem nowadays in my opinion, but it is a problem. Actually only the person who is accepting this coin must know the price of bitcoin.
4. Return of change - You buy stuff worth 15$ and your physical bitcoin is worth 23,52$, so how can we make this work? Today there is still big dominance by FIAT currencies. So they can't just be canceled today. And I think we could use them very good in solving problem of returning the change. You would just simply return him FIAT currency. It would be also possible to return physical bitcoin + FIAT money. You buy thing for 15$, pay it with 23,52$ worth of BTC they can return you 8,52$ or you get back 6,52 worth of BTC and 2$.
5. Legal problems - If people would start using bitcoins a lot more, governments/banks would definitely interfere in it with some regulations, prohibitions etc. I think good concept of physical bitcoin would raise it's use a lot. So we can only imagine what would/will happen.
6. Hand to hand - You can't send physical bitcoin over the internet. The people involved in transaction must be at the same place. Of course this is not really a problem, as you can just get private key and send BTC to your digital wallet.

Advantages:
1. No fees - Only fee it would be paid would be in the process of making physical bitcoin and when you would send BTC from the physical bitcoin. And both of these fees can be at minimum, because there is no need to hurry. When you are spending physical bitcoin there is no fee required. The only fee could be from the person who receive bitcoins as payments. 5
2. Simplicity - It would finally become simple for old grandpa or grandma to use Bitcoin. No wallet, no computer, no explaining, no electricity...
3. No need to understand everything - We don't understand all the things we use everyday (how computers work, how internet works, how cars work...) but we still use them with no concerns. So it should become same with Bitcoin, we just need to make thing so simple that anyone can use without understanding it. And physical bitcoin is a big step towards this goal.
4. Good advertisement - If anyone can use BTC as payment method with ease it is very good for Bitcoin.
5. Interest - You can start to explain about Bitcoin, blockchain with something to show. Now only people who can use computer are able to operate with bitcoins. If you have something to hold anyone can start from there. This would in my opinion raise interest in blockchain technology a lot.
6. Secure - If coins would be safe (disadvantage n.1) this would be really safe currency to use. It would actually be backed with blockchain technology which we know is impossible to break, for now.

So what are your thought about physical bitcoin? Is this the future of Bitcoin?

1 Can someone post link where you could see average fees in BTC per byte over the time.
2 I don't understand technology behind this solutions yet, so I can't comment on that and predict it's effectiveness.
3 This is the idea I have about physical bitcoins, please correct me if I am wrong.
4 Is this information correct?
5 The person receiving coins can set fee. Example: Paying with bitcoins increase price for 3%. This fees are mostly set because of volatility of bitcoin, which should decrease over time so these fees will get smaller and smaller, until 0.

Please correct me, add disadvantages/advantages, answer, explain...

P.S. I don't want worthless spam in this topic. So I will delete posts which won't be constructive and make topic hard to read. This first post will probably get edited!

No not at all, I think no one has never think that future of the bitcoin. This is one of the great advantage of bitcoin that it is very very difficult to steal because it does not have my physical form and can only stored in accounts, you can only feel it, see it in your account but cannot touch it and moreover every one is talking that in future it will replace all Fiat currency and if bitcoin itself will become the paper currency then the supporters who are now in favour of bitcoin will also comes in against of it.