Physical bitcoin - Is this the future?

[7jaka7]

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!

[hatshepsut93]

If in the future Bitcoin will become a widespread currency, someone will notice that being digital can be a downside, because it makes Bitcoin 100% tied to the Internet, electricity and electronic devices, unlike fiat money that can exist in many forms. Physical Bitcoin already exists, but mostly for collectible purposes. If someone will decide a physical Bitcoin for payments, they will probably get a lot of Bitcoins (lets's say 10 000), lock them in and release paper currency that will be backed by those Bitcoins. It will work just like current cash, but backed by Bitcoin instead of gold, and it won't have any problems with private key ownership that you have described in your post.

[7jaka7]

If in the future Bitcoin will become a widespread currency, someone will notice that being digital can be a downside, because it makes Bitcoin 100% tied to the Internet, electricity and electronic devices, unlike fiat money that can exist in many forms. Physical Bitcoin already exists, but mostly for collectible purposes. If someone will decide a physical Bitcoin for payments, they will probably get a lot of Bitcoins (lets's say 10 000), lock them in and release paper currency that will be backed by those Bitcoins. It will work just like current cash, but backed by Bitcoin instead of gold, and it won't have any problems with private key ownership that you have described in your post.

I agree with you, digital currency has its downsides especially until not every human on earth is connected to internet and has computer.
This idea with paper currency backed by Bitcoin is probably best solution. It would overcome many problems and people would probably get used to it pretty fast. But are there any new problems that would appear with this solution?

[funkenstein]

I agree with you, digital currency has its downsides especially until not every human on earth is connected to internet and has computer.
This idea with paper currency backed by Bitcoin is probably best solution. It would overcome many problems and people would probably get used to it pretty fast. But are there any new problems that would appear with this solution?

Well yeah.  Private issuance means there is no verifiability.  We all know how this works.  The issuer of the paper notes issues far more notes than there are bitcoins to back them up.  Their ability to issue new notes amounts to an ability to steal from everybody else ad libitum.   

A better way to transact offline is to use a bitcoin check  (private key on a piece of paper with some information).  This requires you have some trust or KYC but that's really not such an uncommon thing in most of our transactions.  Each transaction in this case winds up being put on the chain eventually, when the payee is finally able to get online...  and if they never do (or not within an agreed upon time), the payer keeps a copy and can claw back the funds. 

 

[jekjekman]

Is this really a thing, Making bitcoin physical?

For me it is like making a tangible bitcoin to be one of a fiat currency. Then you will be relying again to the centralize banks.

And if you really worry about the fees, did you already try to send a remmitances from your country to the other side of the world using your fiat currency?

Sorry for this will not happen if you think it will, it is like saying go walk to your work from your house to avoid gas fees with your car plus it is more safer because you may get a car accident in the way. Noting also that not all of the people on earth has a car to access the road but there is a public transportation right? So the fact that not all people can access the internet is so lame for me.

We must keep moving forward people, embrace the changes and don't be a hindrance or unless you will be left behind. Peace out, its only my opinion.

[7jaka7]

I agree with you, digital currency has its downsides especially until not every human on earth is connected to internet and has computer.
This idea with paper currency backed by Bitcoin is probably best solution. It would overcome many problems and people would probably get used to it pretty fast. But are there any new problems that would appear with this solution?

Well yeah.  Private issuance means there is no verifiability.  We all know how this works.  The issuer of the paper notes issues far more notes than there are bitcoins to back them up.  Their ability to issue new notes amounts to an ability to steal from everybody else ad libitum.   

A better way to transact offline is to use a bitcoin check  (private key on a piece of paper with some information).  This requires you have some trust or KYC but that's really not such an uncommon thing in most of our transactions.  Each transaction in this case winds up being put on the chain eventually, when the payee is finally able to get online...  and if they never do (or not within an agreed upon time), the payer keeps a copy and can claw back the funds. 

Yea this is a problem, could there be possible that you would actually connect paper note to public key. So you could check it anytime, and see that there is really BTC backing it up. But access to private key would only be possible if you would go to some central institution and swap your paper note for BTC.
I think this bitcoin check is far to fragile and exploitable. I doubt it would work on a large scale. You actually give him private key which is not very secure for me.

Is this really a thing, Making bitcoin physical?

For me it is like making a tangible bitcoin to be one of a fiat currency. Then you will be relying again to the centralize banks.

And if you really worry about the fees, did you already try to send a remmitances from your country to the other side of the world using your fiat currency?

Sorry for this will not happen if you think it will, it is like saying go walk to your work from your house to avoid gas fees with your car plus it is more safer because you may get a car accident in the way. Noting also that not all of the people on earth has a car to access the road but there is a public transportation right? So the fact that not all people can access the internet is so lame for me.

We must keep moving forward people, embrace the changes and don't be a hindrance or unless you will be left behind. Peace out, its only my opinion.

There must be a system which would provide us physical Bitcoin or some kind of paper notes in which you are not relying on centralize institution.

LOL, about the fees, did you even read what i wrote? I know fees are far from really high. But would you buy 0,2$ chewing gum with BTC? You would pay 2-3$ more. You pay same if you are sending BTC across the whole globe or if you go to shop across the road. This is problem which is making BTC impractical for everyday use. And imagine if everyone would use Bitcoin and every transaction would be on blockchain, it would make fees even bigger.

OK, so you went hiking to a remote place where there is no internet connection, no signal on phone... You only have BTC- in an online wallet. You come to shop where you want to buy water but you can't because there is no internet connection. So bitcoin is useless in this case no matter how stupid it sound that not everyone has internet connection. You can't buy water/food/snack... I would say to myself this bitcoin is shit, I can have 1 mil worth of BTC but i can't buy anything with it unless there is internet.
I am talking about global usage of Bitcoin, it just can't be used by anyone if we don't have some kind of physical bitcoin.

I think this is moving forward for Bitcoin, if there would be good/trusted offline way of exchanging BTC it would be more suitable to become number 1 currency in the world.

[Mike Mayor]

Ok I read through what you have said. (There is alot) I sort of see what you saying but dude. It's nulified by the fact that it is pychical. The whole point if Bitcoin is so that it's not physical. What you telling about is like going backwards. Why ? Physical bitcoins is a novelty. It is for long term storage and it just cool and a nice thing to own. It's not practical at all. That's why I say sorry dude this isn't going to work. But nice idea.

[Proton2233]

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.

[mrcash02]

I believe a centralized business could use a feature like this, but with physical coins of different values, like local currencies. They could work as an exchange house, where you give them your BTCs and they give you some coins pricing the same amount you paid to them.

To make this work, several shops should be in cooperation with this exchange house, dealing with the physical coins they supply.

It's dangerous, because many Bitcoins would be on the exchange's hands and at some point they could run away with the BTCs and make all the physical coins system stop working. What do you think?

[soul-impact]

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.

It's stupid that people do not trust bitcoin. It's a false thought, we can not affirm the value of a coin even though we can not touch it. Unlike cash, bitcoin and other altcoins are digital products, which only exist on the internet data base. Its power is being expressed by its value. Do not doubt about it.

[Gaaara]

Having one is not actually a problem but it seems to be worthless as the bitcoin is known for its anonymity, transferring using internet, and investment purposes in other words making a physical bitcoin is like having another coin that is not a cryptocurrency so it would be a big problem for adopting it and accepting it in a wider community. I still don't understand the logic of this, I am not against it but why bother making so many work for such a small thing that will change. Bitcoin will improve but I still don't see any reason for having a physical one.

[PancherBitCoin]

Having one is not actually a problem but it seems to be worthless as the bitcoin is known for its anonymity, transferring using internet, and investment purposes in other words making a physical bitcoin is like having another coin that is not a cryptocurrency so it would be a big problem for adopting it and accepting it in a wider community. I still don't understand the logic of this, I am not against it but why bother making so many work for such a small thing that will change. Bitcoin will improve but I still don't see any reason for having a physical one.

If Bitcoin reaches its physical state, then it will lose all its advantages. The reality for today the society is not ready to accept Bitcoin as it is, And for this they use Fiat very well. But at the same time for more popularity Bitcoin, you need time and go to the physical form at all.

[AjithBtc]

Physical Bitcoin is not required. Because the virtual presence is more than enough and just because of that it has gathered such a big popularity and growth. Physical bitcoin is now too available, as the cold storage wallet serve to be an physical bitcoin.

[Qartersa]

What's the point of having a physical bitcoin? Then just use fiat if that is the case. Bitcoins are made for online transactions and if it is done through normal means like how we do it with fiat, you actually destroy the purpose of bitcoins and thus making it just like any other fiat currency.

Besides, there are a lot of issues regarding private keys being handled by third parties which is not a good thing.

[minifrij]

You're about 6 years too late with your idea. Physical Bitcoins have existed since 2011.

See the Collectibles section.

[dothebeats]

I know what you're thinking. Something along the lines of the tokens in John Wick? First, who would mint these coins? The sticker thing is kinda off, people can just peel it and replace it with something new if they like. Also, it defeats the purpose of anonymity since person-to-person transaction is needed to seal the deal. Finally, how would you connect every possible trade of the physical bitcoin in the blcokchain without having the fees paid? So does that mean these people should always bring their smartphone to scan qr codes on the coin? It is a hard to do and implement.

Casascius coins are also widely available too, just a heads up.

[deisik]

I agree with you, digital currency has its downsides especially until not every human on earth is connected to internet and has computer.
This idea with paper currency backed by Bitcoin is probably best solution. It would overcome many problems and people would probably get used to it pretty fast. But are there any new problems that would appear with this solution?

Well yeah.  Private issuance means there is no verifiability.  We all know how this works.  The issuer of the paper notes issues far more notes than there are bitcoins to back them up.  Their ability to issue new notes amounts to an ability to steal from everybody else ad libitum

This is certainly the case with fiat money

But there are at least two major points why things may be different with Bitcoin. First of all, unlike fiat with which you have to pay taxes and banks which you have to use if you want to transfer money, no one is forcing you either to use paper bitcoins or transact with them. Further, it is not possible to check how much paper money has been printed but it is certainly possible with paper bitcoins, i.e. it is feasible to introduce a (decentralized) system which would allow you to check whether this paper bitcoin is actually backed up the "real" bitcoin. Given the first and the second, those who would want to start up such a system would have to provide a means to verify that there are no more paper bitcoins in circulation than real ones in reserves. Otherwise no one will be using these bitnotes in the first place

[bitbunnny]

You're about 6 years too late with your idea. Physical Bitcoins have existed since 2011.

See the Collectibles section.

True, and I don't think it will ever exist again. I think digital currencies should stay digital and there is no need for them to exist in physical form, paper or some else. We are about to become completely digital society so why to complicate more. I don't need paper Bitcoins, what would be the sense?

[pixie85]

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.

Nobody said Bitcoin was made so that people can buy a box of matches or condoms. What if it evolves into a cheap overseas money transfer system and a way to safely pay for a new car or a house with minimum fee?
Also, 3$ fee? I've always used half of that price with no problems.

You mentioned the stickers on physical Bitcoins. They can be counterfeited because nobody has thought of making them really secure, like fiat money. When first coins were made the price of Bitcoin was probably less than $100. I think if we're to use them in future they will have to be upgraded, so that it's much harder to steal the coins.
Nowadays checking the address won't help you, because the thief could have the private key on his phone, give you the coin, receive the payment and then quickly empty the address minutes after shaking hands with you.

[Netnox]

If in the future Bitcoin will become a widespread currency, someone will notice that being digital can be a downside, because it makes Bitcoin 100% tied to the Internet, electricity and electronic devices, unlike fiat money that can exist in many forms. Physical Bitcoin already exists, but mostly for collectible purposes. If someone will decide a physical Bitcoin for payments, they will probably get a lot of Bitcoins (lets's say 10 000), lock them in and release paper currency that will be backed by those Bitcoins. It will work just like current cash, but backed by Bitcoin instead of gold, and it won't have any problems with private key ownership that you have described in your post.

Bitcoin is essentially a digital asset. It is not that easy to convert in to the physical form. Even if you have physical Bitcoins with you, how can you confirm that the Bitcoins haven't moved else where? You need internet to confirm that the Bitcoins are still present in these physical coins.