Tech details needed to give cryptocoins the benefits mandatory for true adoption

[townf]

I posted versions of this in the Economy section, but got no traction at all. Maybe this should go in the Trading section, but I'm asking for technical implementation ideas here.

The terms "note" and "receipt" are used interchangeably here.

Inert, physical notes offer anonymity, higher adoption rate in the local physical world, instantly verified transactions, and reversibility of transactions.

The masses will have high demand for all these things in their money. These features are mandatory for true adoption, but do not exist in cryptocoins.

Notes can be issued on anything, any cryptocoin, any metal, any stores of grain, any commodity, at any time. They're just receipts. Transacting with these receipts offers all the said, mandatory benefits I just described.

However, the non-physical, cryptographic, public nature of cryptocoins make it so the said, mandatory benefits do not exist when transacting with the cryptocoin commodity itself.

Receipts for cryptocoin reserves must be and eventually will be used as actual money so we can enjoy the said, mandatory benefits. Otherwise cryptocoins will be nothing more than they are today, which isn't very useful.

Any entity that people trust not to evaporate with their commodity can successfully issue and redeem notes on anything at any time there is a demand, including right now.

Nothing at any time, including right now, keeps anybody from doing this with any commodity, including cryptocoins: "You can give me that thing and I'll write you a receipt for it, and we can swap back anytime you want".

It's really as simple as that for the receipts to be used as money. This is going to happen, guaranteed. The more popular, the sooner.

The receipt issuer has to come up with a way to successfully identify counterfeits and to combat other fraud vectors.

A decentralized, p2p network of banking software and/or receipt issuing ATMs should be implemented to accomplish this in such a way to minimize note issuing by private, fractional reserve banks.

Any ideas and discussion are most welcome!!

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[jl2012]

This happened in human history many times and was always failed: using gold receipt instead of gold.

[townf]

This happened in human history many times and was always failed: using gold receipt instead of gold.

Yeah it's about to happen again, you can't do anything about it. Hence the call for a better way of implementing it

[townf]

This happened in human history many times and was always failed: using gold receipt instead of gold.

Also, using gold receipts instead of gold failed not because of gold receipts and gold, but because of government bailouts for the ones issuing too many receipts on gold that didn't exist

[ffe]

"You can give me that thing and I'll write you a receipt for it, and we can swap back anytime you want".

Ripple

[townf]

"You can give me that thing and I'll write you a receipt for it, and we can swap back anytime you want".

Ripple

meh, not really. I'm thinking more like the physical, dumb kind of receipt, basically cold hard cash with public machines on a decentral public network issuing/redeeming them.

[wheatstone]

Inert, physical notes offer anonymity, higher adoption rate in the local physical world, instantly verified transactions, and reversibility of transactions.

The masses will have high demand for all these things in their money. These features are mandatory for true adoption, but do not exist in cryptocoins.

Perhaps the lack of response is due in part to the phrasing. I'm honestly not sure what "these features" are, that are supposedly mandatory. Are all 4 features really included? (if so, at least one is a logical fallacy). Additionally, you fail to present any arguments as to why these features are mandatory.

However, I'll bite

Anonymity? Physical notes do not offer that, certainly not to the extent one can achieve with bitcoin.

Higher adoption in the local physical world? Logical fallacy / circular logic.

Instantly verified transactions? True, at least when the physical notes are "cash" and some expense is employed to detect counterfeits.

Reversibility of transactions? False. Credit card services offer asymmetric reversible transactions, but cash or notes do not. If you know who you handed your notes to, you can pretty please ask them for your money back. The exact same thing goes for bitcoin.

There are plenty of other aspects, however. If you look at retail today, debit and credit cards are increasingly popular (with claims of 50+ million purchases a day through Visa and MasterCard in the US alone). This payment form differs significantly from cash or notes, yet has a very high adoption rate, even in physical stores where cash or notes is actually an option.

Both credit cards and cash come with a relatively high expense for the payment recipient (although this cost is virtually always passed to the payer, if only indirectly). Cash needs to be secured and transported to a bank. Card processing fees vary greatly, with direct debit being the cheapest and "premium" credit cards the most expensive. Standard credit cards typical cost the merchant anywhere from 1.5% to 3%. Cash reportedly costs large retailers about 1% to handle (more then debit cards, less than credit cards).

[tuheeden]

Please take a look at this: https://bitcointalk.org/index.php?topic=210701.msg2234722#msg2234722

This is exactly what Bitcoin needs. The ability print currency, that anyone can VERIFY publicly but now you have a medium that you can use like cash and only when a person loads the keys into their wallet will the block chain show a transaction.

Now you have a way to completely be anonymous. Really this is just like printing postage from your home or using remote check deposit to put money back in.

Bitcoin has many attributes of Cash, Check and Credit Cards. Today people write checks every day based on the trust of the individual that the check will clear. Bitcoin can easily handle most transactions and BitCash (like piperwallet.com) would be a perfect replacement for transactions that are "offline".

I fully expect national governments to look into issuing their own digital currencies in the future. It would save them millions and they would have control of the payment mechanisms.

I think that if Bitcoin can focus on the engine, that the marketplace will solve most of the rest of the problems.

Cheers

[drazvan]

Tuheeden, you do realize that paper wallets cannot be passed around like cash, don't you? The private key is printed onto the note, there's nothing preventing someone from making a copy of it and then adding it to his/her wallet after the note has been passed to another person. And if only the public key (the Bitcoin address) is shown and the private key is hidden or covered by a flap, there's no way for anyone to check that the owner actually knows the private key associated to that address.

Essentially it's only valid for a single transaction, the recipient should immediately import the private key into his wallet and swipe the funds to a different address.

[wheatstone]

Essentially it's only valid for a single transaction, the recipient should immediately import the private key into his wallet and swipe the funds to a different address.

And even then you risk the payer (or note creator) knowing about the private key. Any sufficient security seal would add cost and would not help with the creator, so you would have to confirm prior to transaction that the outputs are unspent (and then, as you point out, immediately transfer the coin the heck out of there).

These requirements forces the use of an internet-connected device to assist in the transaction (verify the outputs prior to accepting the notes and spending them immediately afterwards).

Why not simply use that internet-connected device to do the transfer itself using Near Field Communication (a lot of (non-Apple) smartphones already have NFC). Just tap your phone to a payment terminal (or someone else's phone) and enter your "pin".

[drazvan]

You don't have to go through NFC, far more phones have screens and cameras: https://bitcointalk.org/index.php?topic=210371.0

[tuheeden]

YES - I realize the private key would need to be shielded for it to be used for more than one transaction, but the low tech way would be a simple sealed windowed envelope or a better way would be like a scratch off or fold and glue paper. Cassius coins was sealed, so you just need a way to tamper proof the private key while allowing the public key to be verified for the amount.

I think the concept is sound and it expands the audience to people beyond the tech realm.

Cheers!

[townf]

Inert, physical notes offer anonymity, higher adoption rate in the local physical world, instantly verified transactions, and reversibility of transactions.

The masses will have high demand for all these things in their money. These features are mandatory for true adoption, but do not exist in cryptocoins.

Perhaps the lack of response is due in part to the phrasing. I'm honestly not sure what "these features" are, that are supposedly mandatory. Are all 4 features really included? (if so, at least one is a logical fallacy). Additionally, you fail to present any arguments as to why these features are mandatory.

I figured the fact that they are mandatory right now was obvious enough to not go into it too much. Historically, receipts have almost always been issued on reserves, with the receipts being adopted as "money". I think in reality, this will be unavoidable with crypto whether we like it or not.
The bankers will see the light and offer all the benefits of receipts to us, unless we can make a decentral system to do it ourselves first.

Anonymity? Physical notes do not offer that, certainly not to the extent one can achieve with bitcoin.

Physical notes, as in cash, are for every practical purpose, totally anonymous. I'm not sure how you can at all say that thay aren't. On the other hand, the forever in its entirety public blockchain/NSA/criminal botnet data mining/ISP traffic analysis/corporate controlled routing/subpoena risk combination is definitely not anonymous. Even if you succeed in being completely anonymous with bitcoin, your anonymity is forever at risk as soon as you transact with somebody who doesn't care or has slipped up.

Higher adoption in the local physical world? Logical fallacy / circular logic.

I'm not sure how that's circular or anything but straightforward. We're talking about the masses here, not the techno crowd hoarding bitcoins currently. Not everybody is going to appreciate the mandate for an internet connection and some electronic gizmo to buy every last little cheap thing at the corner store. While it is true that merchants need an internet connection today for credit cards, the customers can get by with an inert piece of plastic, and cash is widely used. Many people do not use credit cards, especially person to person.

Reversibility of transactions? False. Credit card services offer asymmetric reversible transactions, but cash or notes do not. If you know who you handed your notes to, you can pretty please ask them for your money back. The exact same thing goes for bitcoin.

This is true. I can give you this one partially, but physically handing over cash is way quicker than waiting for a block or two to be mined. And there is the matter of transaction fees that would have to be paid both ways to a miner for this manual reversal in the blockchain. Furthermore, although i didn't state it in the OP, it should be implicit that there would be banks or "wallets" coming into existence storing accounting entries of these notes, much like checking accounts, and these accounting entries can be reversed asymmetrically. I'm not saying I'm an advocate of this, I'm just saying it can be done, and the masses might mandate this in cases of fraud, non delivery, etc.

Why not simply use that internet-connected device to do the transfer itself using Near Field Communication (a lot of (non-Apple) smartphones already have NFC). Just tap your phone to a payment terminal (or someone else's phone) and enter your "pin".

This doesn't solve all the problems that inert receipts on crypto reserve solves, although it does somewhat solve the local, face to face transaction problem somewhat conveniently, except for the gizmo part of it. And at least somebody has to have an internet connection. This is like the smart card wallet on the wiki. I like this a lot, although it doesn't get us all the way there and the demand for inert notes will still exist.

YES - I realize the private key would need to be shielded for it to be used for more than one transaction, but the low tech way would be a simple sealed windowed envelope or a better way would be like a scratch off or fold and glue paper. Cassius coins was sealed, so you just need a way to tamper proof the private key while allowing the public key to be verified for the amount.

The casascius coin, windowed envelope thing unfortunately can't work i don't think, because i don't think there is ultimately a way you can get around having to trust the maker of the thing to not know what the priv key is, and hence not spend the coin, like wheatstone pointed out. I don't think you can create a private key and truly prove you don't know what it is. I've tried to think my out of this exact problem for awhile and it's been on a thread or two with no good solutions (that I saw). Maybe with zero knowledge proofs or creative multi sigs or escrowing, but even leveraging all these features, i still don't see how you can achieve it.

[wheatstone]

I figured the fact that they are mandatory right now was obvious enough to not go into it too much.

What do you mean by "mandatory right now"?

Historically, receipts have almost always been issued on reserves, with the receipts being adopted as "money". I think in reality, this will be unavoidable with crypto whether we like it or not.

Historically, the choice has been to either lug around gold / chickens / whatever or use some sort of "note".

That's clearly not the case today with the vast majority of purchases being performed with cards of some sort. In 2011, only 27% of all point-of-sales purchases in the US were made with cash (reference).

Not everybody is going to appreciate the mandate for an internet connection and some electronic gizmo to buy every last little cheap thing at the corner store. While it is true that merchants need an internet connection today for credit cards, the customers can get by with an inert piece of plastic, and cash is widely used. Many people do not use credit cards, especially person to person.

I would not characterize your piece of plastic as inert. These days, most people use credit cards with a chip embedded. But, regardless, any mode of storage (whether holographic, chip, or just a magnetic strip) will allow you to pay at an internet-connected terminal (like current credit card terminals).

Physical notes, as in cash, are for every practical purpose, totally anonymous. I'm not sure how you can at all say that thay aren't.

Physical notes are the very antithesis of anonymous. I'm not sure how you can say otherwise

In all seriousness, I do understand what you are saying, but cash is almost always used in a situation where your anonymity is completely comprised already (face-to-face and, most likely, face-to-multiple-cameras).

On the other hand, the forever in its entirety public blockchain/NSA/criminal botnet data mining/ISP traffic analysis/corporate controlled routing/subpoena risk combination is definitely not anonymous. Even if you succeed in being completely anonymous with bitcoin, your anonymity is forever at risk as soon as you transact with somebody who doesn't care or has slipped up.

 
No. Bitcoin can offer whatever level of privacy you want, regardless of what the person receiving the transaction does. Providing you're not getting something shipped to you, the maximum amount a vendor can leak is the payment transaction and item(s) purchased. That's the same as cash, but a lot less potential leakage than with a credit card.

Personally, I think what will happen - and this addresses multiple points - is that all point-of-sale purchases will happen off-chain, particularly small amounts. This allows instant confirmations while decreasing the effort needed to maintain privacy towards the vendor. (Effort still needs to be made to maintain privacy towards the third party providing the payment service.) This will add a slight cost to your transaction, but direct debit charges are very small (usually a small fraction of a percent) and this would be comparable.

There are a number of ways funding such a third party "account" could work (and if preserving privacy towards the vendor is a feature you want, "trust" that the third party isn't going to abscond with your money is necessary) and various technical methods of implementing the payment process and information stored on card / phone, all with varying features, but that would be beyond the scope of this thread.

For larger amounts or high risk transactions, using on-chain transactions and waiting for confirmations would be worth the wait.

Higher adoption in the local physical world? Logical fallacy / circular logic.

I'm not sure how that's circular or anything but straightforward.

Requiring A in order to achieve A is the very definition of circular logic. A = high adoption, in this case.

Furthermore, although i didn't state it in the OP, it should be implicit that there would be banks or "wallets" coming into existence storing accounting entries of these notes, much like checking accounts, and these accounting entries can be reversed asymmetrically. I'm not saying I'm an advocate of this, I'm just saying it can be done, and the masses might mandate this in cases of fraud, non delivery, etc.

All of this could be implemented by a third party "wallet" using off-chain transactions at a much cheaper cost and lower risk than printing currency.

The casascius coin, windowed envelope thing unfortunately can't work i don't think, because i don't think there is ultimately a way you can get around having to trust the maker of the thing to not know what the priv key is, and hence not spend the coin, like wheatstone pointed out. I don't think you can create a private key and truly prove you don't know what it is. I've tried to think my out of this exact problem for awhile and it's been on a thread or two with no good solutions (that I saw). Maybe with zero knowledge proofs or creative multi sigs or escrowing, but even leveraging all these features, i still don't see how you can achieve it.

Third party payment processing is the way this will happen. Yes, you will have to trust that third party with your money, but to lower the risk, the account could be funded as little as possible (and not reused). Although I said it was beyond the scope of this thread, I could go into great detail about how such a scheme could be constructed to give a maximum amount of privacy with a minimum amount of effort, should you wish

[townf]

I figured the fact that they are mandatory right now was obvious enough to not go into it too much.

What do you mean by "mandatory right now"?

Mandatory meaning required features of a medium of exchange. Mandatory right now as in they exist right now because there is a demand for these features and there always has been and probably always will be. Not sure how to explain it further. I feel like we're wasting time with the obvious.

Historically, the choice has been to either lug around gold / chickens / whatever or use some sort of "note".

That's clearly not the case today with the vast majority of purchases being performed with cards of some sort. In 2011, only 27% of all point-of-sales purchases in the US were made with cash (reference).

I would have to say that the choice has always been made to carry around a receipt on a chicken or gold or grain or whatever. Furthermore that still is the case today as in your example, all credit card purchases, electronic transfers, etc, not just physical cash, are exchanges in notes by way of increasing or decreasing accounting entries of them. The reserves today is "monetized government debt".

Physical notes are the very antithesis of anonymous. I'm not sure how you can say otherwise

In all seriousness, I do understand what you are saying, but cash is almost always used in a situation where your anonymity is completely comprised already (face-to-face and, most likely, face-to-multiple-cameras).

C'mon now please, I almost think you are being purposefully thick as you wildly miss the point that it is not the anonymity between transactors that is important, but rather preserving anonomity of the parties in regards to outside parties such as the government, employers, spouses, friends, enemies, strangers, etc.

On the other hand, the forever in its entirety public blockchain/NSA/criminal botnet data mining/ISP traffic analysis/corporate controlled routing/subpoena risk combination is definitely not anonymous. Even if you succeed in being completely anonymous with bitcoin, your anonymity is forever at risk as soon as you transact with somebody who doesn't care or has slipped up.

 
No. Bitcoin can offer whatever level of privacy you want, regardless of what the person receiving the transaction does. Providing you're not getting something shipped to you, the maximum amount a vendor can leak is the payment transaction and item(s) purchased. That's the same as cash, but a lot less potential leakage than with a credit card.

I have to totally disagree. This issue is much broader than your narrow example and has been discussed in numerous places in this forum and there are many articles on the interwebz about it.

Personally, I think what will happen - and this addresses multiple points - is that all point-of-sale purchases will happen off-chain, particularly small amounts. This allows instant confirmations while decreasing the effort needed to maintain privacy towards the vendor. (Effort still needs to be made to maintain privacy towards the third party providing the payment service.) This will add a slight cost to your transaction, but direct debit charges are very small (usually a small fraction of a percent) and this would be comparable.

There are a number of ways funding such a third party "account" could work (and if preserving privacy towards the vendor is a feature you want, "trust" that the third party isn't going to abscond with your money is necessary) and various technical methods of implementing the payment process and information stored on card / phone, all with varying features, but that would be beyond the scope of this thread.

For larger amounts or high risk transactions, using on-chain transactions and waiting for confirmations would be worth the wait.

These things you describe are going to have to compete against the simple issuance, use, and guaranteed redemption of inert receipts on crypto reserves and accounting entries thereof, which is much simpler and more widely adoptable by the masses. I hear the word "masses" as in "mass adoption" and i think "simple" and "throughout history". This is just my opinion, which i believe is fairly logical. In any case the premise of this topic is that these notes are a foregone conclusion although i don't mind the side debate of whether they will be in demand enough to spring into existence, like we are having.

Higher adoption in the local physical world? Logical fallacy / circular logic.
...
Requiring A in order to achieve A is the very definition of circular logic. A = high adoption, in this case.

Again, it's almost as if you are being obtuse on purpose. I'm talking about the adoption of cryptocurrency in general. The use of notes on crypto reserves is something that will foster adoption of crypto as a medium of exchange in general for a much wider range of people. I'm not trying to say that we need to use notes to foster the use of notes. Gimme a break.

Furthermore, although i didn't state it in the OP, it should be implicit that there would be banks or "wallets" coming into existence storing accounting entries of these notes, much like checking accounts, and these accounting entries can be reversed asymmetrically. I'm not saying I'm an advocate of this, I'm just saying it can be done, and the masses might mandate this in cases of fraud, non delivery, etc.

All of this could be implemented by a third party "wallet" using off-chain transactions at a much cheaper cost and lower risk than printing currency.

Is this not transacting in accounting entries of receipts issued on crypto reserves? Sounds exactly like it, unless I am missing something. You didn't give enough details.

The casascius coin, windowed envelope thing unfortunately can't work i don't think, because i don't think there is ultimately a way you can get around having to trust the maker of the thing to not know what the priv key is, and hence not spend the coin, like wheatstone pointed out. I don't think you can create a private key and truly prove you don't know what it is. I've tried to think my out of this exact problem for awhile and it's been on a thread or two with no good solutions (that I saw). Maybe with zero knowledge proofs or creative multi sigs or escrowing, but even leveraging all these features, i still don't see how you can achieve it.

Third party payment processing is the way this will happen. Yes, you will have to trust that third party with your money, but to lower the risk, the account could be funded as little as possible (and not reused). Although I said it was beyond the scope of this thread, I could go into great detail about how such a scheme could be constructed to give a maximum amount of privacy with a minimum amount of effort, should you wish

As you said, this still requires trust and is not nearly as simple for a broad range of people as some entity flat out guaranteeing to give you a bonafide crypto amount in the blockchain for an inert piece of paper or coin wherever you got it from, or vice versa, no questions asked.

[townf]

Mandatory meaning required features of a medium of exchange. Mandatory right now as in they exist right now because there is a demand for these features and there always has been and probably always will be. Not sure how to explain it further. I feel like we're wasting time with the obvious.

I see where you might be getting confused. I should be more explicit and say that it is mandatory now because it exists now in the existing, widely adopted, current fiat system. I wasn't meaning that it exists already in crypto

[townf]

wheatstone im totally open to alternatives that will make the reasons for receipts on crypto reserves being used as money be obsolete, because it would be better that way for everybody. Note issuing leads to fractional reserve lending which exposes some degree of risk to an economy.

However, that being said, I don't think it can be avoided, so therefore maybe a decentral thing can be invented to do this instead of private bankers.

To move on (although I don't mind still trying to convince people that the need is there and will be met one way or another), how about this initial idea:

Make an ATM machine (or many). Instead of filling it government fiat notes, fill it with blank tokens with a smart chip on each one.

When somebody wants to make a withdrawal, they use some gizmo like maybe their phone app to sign a transaction of crypto in the amount they want in "cash" over to the network's crypto reserves. The networked ATM creates a random asymmetric key pair (having nothing at all to do with crypto addresses), puts the private one on the smart chip and stores the public one in its decentralized database. The plastic that this chip is mounted on can be printed with the correct denominations or amount of the withdrawal, for convenience.

This plastic thing with a private key on a smart chip is the cash that can be used to transact with indefinitely, locally, person to person, over and over again. If this existed right now, we could each probably talk 10 merchants in our area into accepting them if they knew what bitcoin (or crypto in genral) was and how it worked, what the exchange rates were, where to find out, etc. We could more easily convince regular people to receive and spend them who would have normally have never even tried to get their first piece of crypto.

When somebody has a piece of this cash, and they want crypto in the blockchain, they can go to one of these ATMs with their phone app, present their crypto address they want to be paid, insert the plastic thing with the smart chip and check its signature against the public keys in its decentralized database to verify it, then pays the crypto address.

This is basically the gist of it. It surely can be optimized greatly. It obviously doesn't address accounting entries of these things that can be stored digitally. Counterfeiting must be addressed.

The reason im bringing this up is because i think it is unavoidable that private banks will perform this function, as they always have in the past, unless a decentral one is there already to compete with them.

[wheatstone]

Believe it or not, I am not being purposefully obtuse

To take two main points:

A) I fundamentally disagree with you about the properties of the currently most-widely-used mechanism of payment (cards), particularly with respect to anonymity / privacy.

B) I fundamentally disagree with you about the need for a physical "inert" carrier of value.

Starting with A... Card payments today expose an inordinate amount of information to numerous parties who are permitted to sell this information to anyone with only scant protections (or none at all if they can get consumers' "informed consent", depending on jurisdiction). The card issuer and payment processor have access to your entire purchase history (including individual items, when and where they were bought, etc.), you full name, your address, and more. This can all be avoided with a properly configured bitcoin payment process.

And B... In a country where 75% of point-of-sales transactions occur with a card, why would a digital need or want a physical, "inert" carrier of value? It's completely unrealistic and completely unnecessary. It's just not something that will ever gain wide adoption and you've given no argument as to why it would other than a historical predilection for carrying "cash". The current statistics on PoS transactions disproves your argument. In fact, the only logical argument is that the historical "mass use" has been whatever mechanism is the most convenient with whatever technology is available (weights, measures, stamps, seals, printing presses, card readers, etc). Seen in a historical perspective, "cash" is being replaced faster than any other mode of payment.

Finally, you might argue that having a third party hold your bitcoins and processing payments through them (or, indeed, any other form of off-chain payment) is equivalent to having notes (physical or otherwise) issued on (bitcoin) reserves. If so, fine, I'm not going to argue semantics.

Let me sum up a few claims / predictions of mine:

Off-chain bitcoin payments are going to be an increasingly used payment mechanism if only because it addresses two issues with bitcoin payments: anonymity and confirmation time.

These off-chain transactions are going to be digital in nature, not through the exchange of inert notes (the construction of which is completely infeasible and impractical).

[townf]

A) I fundamentally disagree with you about the properties of the currently most-widely-used mechanism of payment (cards), particularly with respect to anonymity / privacy.
...
Starting with A... Card payments today expose an inordinate amount of information to numerous parties who are permitted to sell this information to anyone with only scant protections (or none at all if they can get consumers' "informed consent", depending on jurisdiction). The card issuer and payment processor have access to your entire purchase history (including individual items, when and where they were bought, etc.), you full name, your address, and more. This can all be avoided with a properly configured bitcoin payment process.

What the hell are you talking about? When did I ever even imply in the slightest that card payments today in any way preserve any anonymity at all? When did I even mention any feature of current card payments? I fully agree with what you just said about them, but are you actually trying to say that i said otherwise, or even raised any issue about it at all?

And B... In a country where 75% of point-of-sales transactions occur with a card, why would a digital need or want a physical, "inert" carrier of value? It's completely unrealistic and completely unnecessary. It's just not something that will ever gain wide adoption and you've given no argument as to why it would other than a historical predilection for carrying "cash". The current statistics on PoS transactions disproves your argument. In fact, the only logical argument is that the historical "mass use" has been whatever mechanism is the most convenient with whatever technology is available (weights, measures, stamps, seals, printing presses, card readers, etc). Seen in a historical perspective, "cash" is being replaced faster than any other mode of payment.

All currencies, state fiat, crypto, even gold to a large extent, are "digital" today. The fact that a currency is "digital" doesn't subtract from any real demand that they have a useful physical or virtual representation. I disagree that a physical or virtual representation of crypto is unrealistic or completely unnecessary, especially if the only reasoning is just because it is "digital". I go so far to say that physicality or a virtual representation of physicality is a sorely missed component of any purely digitial currency.

I use the term "virtual" to mean accounting entries of notes or receipts issued on reserves.

If you can't be convinced that the historical usefulness of physical and virtual money and the current usefulness of physical and virtual money is not an indicator of the future usefulness of physical and virtual money, then I'm not sure what else to say, but I will try one last way.

Think of crypto as any other reserve specie of value such as precious metal or grain for example. If it is in any way difficult or even slightly inconvenient to transfer or exchange the value stored in these things with other things, then a market will spring up to make it easier, because an easier way will be in demand. Notes issued on reserves comes from this exact market, no matter what the reserve type. Crypto is no different than gold or grain in the respect that transacting in receipts issued on the reserve affords more conveniences (and anonymity in the case of crypto) that transacting in the specie itself. The market will produce this.

The 75% of transactions that you speak of being done on cards are simply digital transactions of receipts issued on reserves. They are the incrementing and decrementing of digital accounting entries of these notes. This digital accounting still can afford the benefits that transacting in the crypto specie itself can not, even anonymity if done correctly. Transactions of receipts, virtual or physical, is not being replaced, nor will it be replaced.

Off-chain bitcoin payments are going to be an increasingly used payment mechanism if only because it addresses two issues with bitcoin payments: anonymity and confirmation time.

These off-chain transactions are going to be digital in nature, not through the exchange of inert notes (the construction of which is completely infeasible and impractical).

Honestly, i'm not sure about how "off-chain transactions" work. I've heard them being referred to before, but i'm not sure how they work exactly. Some details would be great. I can't understand how they are done without requiring an external instrument such as a note, or in this case, a virtual note.

[beeblebrox]

Off-chain bitcoin payments are going to be an increasingly used payment mechanism if only because it addresses two issues with bitcoin payments: anonymity and confirmation time.

These off-chain transactions are going to be digital in nature, not through the exchange of inert notes (the construction of which is completely infeasible and impractical).

Honestly, i'm not sure about how "off-chain transactions" work. I've heard them being referred to before, but i'm not sure how they work exactly. Some details would be great. I can't understand how they are done without requiring an external instrument such as a note, or in this case, a virtual note.

It is theoretically possible to do off-chain transactions totally electronically.   Here's one approach :   https://bitcointalk.org/index.php?topic=148232.msg1578079#msg1578079

The required technology for this particular scheme will be commonplace (ie: in the vast majority of phones and desktops) by the end of the decade.