Bitcoin credit cards?

[Twist177]

Do you think a Bitcoin credit card could succeed as a mainstream form of payment?

As in, the credit card contains your wallet number as a credit card has a credit card number...

Thoughts appreciated   

[1679365578]

1679365578

[1679365578]

1679365578

[1679365578]

1679365578

[gadman2]

Not possible without centralization or huge risks.

[plaxant]

Do you think a Bitcoin credit card could succeed as a mainstream form of payment?

As in, the credit card contains your wallet number as a credit card has a credit card number...

Thoughts appreciated   

Wouldn't that basically be a debit card? There have been attempts at it, I don't know if there's actually been a bank willing to step up.

[callem]

Not possible without centralization or huge risks.

Many things are possible without being obvious. There's more than one project underway that may change this in the near future.

[saif313]

Not possible without centralization or huge risks.

yes too much risk involve in this

[westkybitcoins]

Do you think a Bitcoin credit card could succeed as a mainstream form of payment?

As in, the credit card contains your wallet number as a credit card has a credit card number...

Thoughts appreciated   

I'm not sure what you mean here.

If the card only had your wallet's bitcoin address, and not the private keys, what good would it be? Bitcoin is a "push" system, you wouldn't be able to use such a card at checkout.

If the card had a number on it that linked to your wallet account at some "bitcoin bank," then it might see some degree of success, but I'd be skeptical as to how long it would last, for a variety of reasons.

[franky1]

theoretically how it would work is a contract drawn up that someone puts X BTC into a wallet for 'a customer' with the stipulation that it is credit (a short term loan) with all the waffle about repayment terms and interest at the end of the month.

and the 'customer' then repays the credit providor with whatever the total balance is at the end of the month (credit card bill)..

BTCJam have already got short term loan structure in place so its not a big thing to do. but actually grabbing hold of the 'customer' and slapping him with a wet fish for not repaying, is much harder and more costly when it comes to international markets such as bitcoin, which brings with it more risk to the creditor (investor) and more freedom for the 'customer' to just leg it.

unless you have a list of debt collection agencies across the world to sell the debt to, allowing them to chase to non-payers.

[will1982]

Give an explanation on how, exactly, it would work.
"Bitcoin credit card" is kind of general.

[franky1]

Give an explanation on how, exactly, it would work.
"Bitcoin credit card" is kind of general.

i think he means if u don't have a bitcoin to your name, but you might do next month, the same way people don't get paid their salary's untill the end of the month, thus throwing it all on a credit card.. that's where a bitcoin credit card 'could' be useful.

[elbill]

Okpay or payza have cards to withdraw the balance. Would be nice that mtgox or bitstamp have something similar.

[will1982]

Give an explanation on how, exactly, it would work.
"Bitcoin credit card" is kind of general.

i think he means if u don't have a bitcoin to your name, but you might do next month, the same way people don't get paid their salary's untill the end of the month, thus throwing it all on a credit card.. that's where a bitcoin credit card 'could' be useful.

I think there's already something kind of functionally useful. They give out BTC "loans"
It's called Coinlenders I think...Yeah. www.coinlenders.com

[Marbit]

I'm not sure I understand how this would work in practice.

[smoothie]

lol "bitcoin" and "credit" in the same line.

[adamas]

 Like this:
 

[davidgdg]

You're just talking about a debit card denominated in BTC. But hard to see what the point is really. The only advantage might be the ability to make purchases in bricks-and-mortar shops without the need for the vendor to wait for confirmation.  But I think version 9 of the client will allow for zero-confirmation purchases by doing a double-spend check. So even that advantage is likely to disappear.

[waqas]

I'm not sure I understand how this would work in practice.

its going to be just in papers no body going to accept this   

[will1982]

Like this:
 

It's a pretty picture, but there's no technichal structure to this at all.

[ferked]

cash in change at coinstar and get a printed out key or something would be pretty cool

[adamas]

Like this:
 [img] 

It's a pretty picture, but there's no technichal structure to this at all.

 You can order this cards here: https://bitcointalk.org/index.php?topic=282841.msg3025018#msg3025018

[DannyHamilton]

- snip -
But hard to see what the point is really. The only advantage might be the ability to make purchases in bricks-and-mortar shops without the need for the vendor to wait for confirmation.
- snip -

How about payment in bricks-and-mortar shops without the need to own a smartphone?

I'm sure there are other benefits as well.

[johnyj]

A credit card backed by your bitcoin holdings could provide endless consumption due to the bitcoins that backed those credits are continuously appreciating

For example you have a credit card backed by your holding of 100 coins, you spend 10 coins' worth of dollar, e.g. $1300. The next month when you need to repay the credit card, the price of bitcoin had already risen to $143, the value of your total coin holding increased by $1300, thus your credit is expanded by $1300, you don't need to pay the bill and can continue with your spending

So, it is a new type of credit card that never need to payback, as long as your consumption is limited under certain level depends on your bitcoin holding

[row5_seat47]

I may be writing a follow-up on this soon...

Paypal’s Anonymity Play

"Instant Disposable Payment Card"

http://letstalkbitcoin.com/316/

[Asphyxiated]

couldnt coinbase.com basically do that, your btc is denominated in usd anyway, so if they issue debit cards linked to your account then whatever the USD amount you charge will just be converted to btc and taken out of your account.... I think i will email coinbase..

[Argwai96]

couldnt coinbase.com basically do that, your btc is denominated in usd anyway, so if they issue debit cards linked to your account then whatever the USD amount you charge will just be converted to btc and taken out of your account.... I think i will email coinbase..

i think this would be very cool and would make btc all the more useful to the average person. then again, i have no idea how that would really work in practice.

[will1982]

Like this:
 [img] 

It's a pretty picture, but there's no technichal structure to this at all.

 You can order this cards here: https://bitcointalk.org/index.php?topic=282841.msg3025018#msg3025018

Can't read German, but I assume it is just a normal credit card with Bitcoin's logo on it.
It's not a Bitcoin-lending card.

[plaxant]

cash in change at coinstar and get a printed out key or something would be pretty cool

that would be awesome, I would have gotten 1.5BTC last time I took change in.

[DiamondCardz]

It's possible. I can see a Bitcoin debit card (scan card, enter PIN, info is sent to the debit card companies' server, they send a transaction from your wallet) being possible, not sure about a Bitcoin credit card though.

[AU]

It's possible. I can see a Bitcoin debit card (scan card, enter PIN, info is sent to the debit card companies' server, they send a transaction from your wallet) being possible, not sure about a Bitcoin credit card though.

Who's in charge of this mega corporation to be? Who handles chargebacks and overdraft fees? I see no solution unless new hardware is developed to support bitcoin transaction exclusively

[BitAddict]

Like this:
 [img] 

It's a pretty picture, but there's no technichal structure to this at all.

 You can order this cards here: https://bitcointalk.org/index.php?topic=282841.msg3025018#msg3025018

Can't read German, but I assume it is just a normal credit card with Bitcoin's logo on it.
It's not a Bitcoin-lending card.

Yes, it is just one anonymous credit card. Is great, but of course you don't pay with bitcoins, you can only deposit fiat on it.

It's possible. I can see a Bitcoin debit card (scan card, enter PIN, info is sent to the debit card companies' server, they send a transaction from your wallet) being possible, not sure about a Bitcoin credit card though.

Who's in charge of this mega corporation to be? Who handles chargebacks and overdraft fees? I see no solution unless new hardware is developed to support bitcoin transaction exclusively

Maybe something like this could work, but way more than cash than credit card:
You go with the bitcoins you want to spend in a paper, with public and private key.
You buy what you want, vendor charges all the bitcoins in your paper and gives you change in another paper you only have public key (or the private is just hidden).

That way you can spend bitcoins without a phone. But of course shop will need internet and laptop/tablet/smartphone to do it.

[DiamondCardz]

It's possible. I can see a Bitcoin debit card (scan card, enter PIN, info is sent to the debit card companies' server, they send a transaction from your wallet) being possible, not sure about a Bitcoin credit card though.

Who's in charge of this mega corporation to be? Who handles chargebacks and overdraft fees? I see no solution unless new hardware is developed to support bitcoin transaction exclusively

Maybe something like this could work, but way more than cash than credit card:
You go with the bitcoins you want to spend in a paper, with public and private key.
You buy what you want, vendor charges all the bitcoins in your paper and gives you change in another paper you only have public key (or the private is just hidden).

That way you can spend bitcoins without a phone. But of course shop will need internet and laptop/tablet/smartphone to do it.
[/quote]

Yes, that's also possible, but it would use a lot of paper.

[AndrewWilliams]

This is pretty simple.


Bitcoin credit card's mag stripe is encoded with your Bitcoin address.


Each merchant (brick and mortar store) has a pre-configured terminal ready to accept Bitcoin along with credit and debit cards.

Merchant rings you up on their POS System (point of sale system) with the Bitcoin enabled software, that than processes the mag stripe Bitcoin address, ringing up your scanned items.

Amount shows on the terminal for your approval (much like a debit transaction). You press Yes (green) to accept, or Cancel (red) to decline.
Perhaps a pin code could be added somehow, this would be very hard to implement universally though, and I don't think it would be feasible, at least not at first.

Customer hits OK and transaction goes through, debiting their Bitcoin address.

Receipt prints out and shows available balance in BTC and USD.

---


So, right now three things are missing:

1. The physical Bitcoin card, featuring encoded BTC address on the magstripe. (Easily achieved with common Magstripe encorder, $200-250). For the MacGuyver types, you can even overwrite the magstripes of existing credit cards or even drivers licenses.

2. Software to convert the read mag stripe BTC addresses to work with existing or new POS software, which can interact with the BTC network. This is for the merchant side of the transaction.


A special build for the terminal would have to be written. Actually, a build would have to be made for every single model of terminal that would want to be used.
By focusing on the ten most popular terminals, this can be achieved without being insurmountable. Companies like TSYS specialize in writing code for terminals and regularly update existing builds.


This is a credit card terminal.

When you get to checkout the cashier asks you how you are going to pay. Right now they ask, "Cash, credit or debit?"

Tomorrow it will be: "Cash, credit, debit, or Bitcoin?"




Technically, no this is not a credit card since it does not extend credit, more a debit card if anything. It's really a representation of your BTC address in a mag stripe form, that can be carrier around and easily used for transactions the same way a credit card can be used.

[Mitchell]

I talked to someone on the BitCoin Convention with a great idea. You can store Gold, Silver and BTC on a credit card and it only gets converted to cash if you use the card. That way you always get the most recent price.

[BitAddict]

This is pretty simple.


Bitcoin credit card's mag stripe is encoded with your Bitcoin address.


Each merchant (brick and mortar store) has a pre-configured terminal ready to accept Bitcoin along with credit and debit cards.

Merchant rings you up on their POS System (point of sale system) with the Bitcoin enabled software, that than processes the mag stripe Bitcoin address, ringing up your scanned items.

Amount shows on the terminal for your approval (much like a debit transaction). You press Yes (green) to accept, or Cancel (red) to decline.
Perhaps a pin code could be added somehow, this would be very hard to implement universally though, and I don't think it would be feasible, at least not at first.

Customer hits OK and transaction goes through, debiting their Bitcoin address.

Receipt prints out and shows available balance in BTC and USD.

---

The problem is that bitcoin is a push system. If the shop can directly charge bitcoins in your adress if because they know your private key... so the also could charge all the money they want in the future. Makes no sense at all.
You need some kind of bank or intermediate.

I talked to someone on the BitCoin Convention with a great idea. You can store Gold, Silver and BTC on a credit card and it only gets converted to cash if you use the card. That way you always get the most recent price.

This is a great idea! But only if they offer a legit change

[DannyHamilton]

This is pretty simple.

- snip -

Amount shows on the terminal for your approval (much like a debit transaction). You press Yes (green) to accept, or Cancel (red) to decline.

- snip -

The problem is that bitcoin is a push system. If the shop can directly charge bitcoins in your address it's because they know your private key...

Exactly.  It's not as easy as a credit card unless there is going to be some sort of "bank" to hold the bitcoins for you and send them to the shop.

The problem is that bitcoins can't be moved from an address without a signature from a private key.  Do you put the private key on the card?  In that case, anyone (or any device) that has ever had access to the magstripe has the potential to store that information and then steal the bitcoins later.  Of the hundreds or thousands of places that you've swiped the card, you wouldn't know which one was the thief. That's putting a LOT of trust in the merchants.  If a merchant is running into financial difficulties that you don't know about, they are going to have a huge incentive to start storing private keys that they can empty at a later date.

[saif313]

This is pretty simple.

- snip -

Amount shows on the terminal for your approval (much like a debit transaction). You press Yes (green) to accept, or Cancel (red) to decline.

- snip -

The problem is that bitcoin is a push system. If the shop can directly charge bitcoins in your address it's because they know your private key...

Exactly.  It's not as easy as a credit card unless there is going to be some sort of "bank" to hold the bitcoins for you and send them to the shop.

The problem is that bitcoins can't be moved from an address without a signature from a private key.  Do you put the private key on the card?  In that case, anyone (or any device) that has ever had access to the magstripe has the potential to store that information and then steal the bitcoins later.  Of the hundreds or thousands of places that you've swiped the card, you wouldn't know which one was the thief. That's putting a LOT of trust in the merchants.  If a merchant is running into financial difficulties that you don't know about, they are going to have a huge incentive to start storing private keys that they can empty at a later date.

in this situation this is not a good idea its just if we have bank for bitcoin and then do through this all its better and safe way to use these cards every where

[DannyHamilton]

its just if we have bank for bitcoin and then do through this all its better and safe way to use these cards every where

Of course that means that you have to trust the bank.

I suppose eventually there could be bitcoin banks that are insured by a government (equivalent to the current U.S. FDIC), and that are under strict regulation, but we are probably a long way off from anything like that.  It isn't even clear yet if any government or major insurance underwriter would ever be willing to back any bitcoin banks.

[AndrewWilliams]

The problem is that bitcoin is a push system. If the shop can directly charge bitcoins in your adress if because they know your private key... so the also could charge all the money they want in the future. Makes no sense at all.
You need some kind of bank or intermediate.

I talked to someone on the BitCoin Convention with a great idea. You can store Gold, Silver and BTC on a credit card and it only gets converted to cash if you use the card. That way you always get the most recent price.

This is a great idea! But only if they offer a legit change

@BitAddict and DannyHamilton:


True, I was thinking about this last night and the best solution would seem to be built in PIN like the debit cards used in Europe and Canada.
"Chip debit cards encrypt all information stored on them, increasing your safety when completing a transaction."

This will prevent merchant from having ALL your info just on the magstripe.

See pic below:




Again, no need for a central bank

[bigasic]

About a year ago, there was a company that was going to release a mastercard that was tied to bitcoin. So, if you wanted to put 10 coins on your card, when you purchased gas and used your card, it would transfer(sell) the amount that you needed into fiat.. I remember they were going to give the first 1k for free, then charge like 10 bucks thereafter, Im assuming that they never got off the ground.. I cant remember their name, But yea, you would think coinbase could do this pretty easily.. At least we could use our fiat thats in our account.. There must me a lot more to it or we would see it by now...

[DannyHamilton]

True, I was thinking about this last night and the best solution would seem to be built in PIN like the debit cards used in Europe and Canada.
"Chip debit cards encrypt all information stored on them, increasing your safety when completing a transaction."

This will prevent merchant from having ALL your info just on the magstripe.

I still don't understand how this will work.  The merchant can't move the bitcoins from your address unless they have your unencrypted private key.  Once they have your unencrypted private key, there is nothing that prevents them from saving it and re-using it in the future.

It seems that what is needed is a card that has a processor, display, and input interface built into it, the card would be placed with some sort of electrical contacts interfacing with the merchant's terminal.  The terminal would request the bitcoin addresses known by the card.  The terminal would then search the blockchain for unspent outputs associated with those addresses.  The terminal would build an unsigned transaction and submit the transaction to the card requesting a signature. The card would then display the transaction amount on its built in display.  The card owner would verify that the displayed amount was correct, and would use the card's built in input interface to indicate acceptance.  The card would reply to the terminal with a signed transaction.  The terminal would then broadcast the transaction to the bitcoin network.

[AndrewWilliams]

True, I was thinking about this last night and the best solution would seem to be built in PIN like the debit cards used in Europe and Canada.
"Chip debit cards encrypt all information stored on them, increasing your safety when completing a transaction."

This will prevent merchant from having ALL your info just on the magstripe.

I still don't understand how this will work.  The merchant can't move the bitcoins from your address unless they have your unencrypted private key.  Once they have your unencrypted private key, there is nothing that prevents them from saving it and re-using it in the future.

It seems that what is needed is a card that has a processor, display, and input interface built into it, the card would be placed with some sort of electrical contacts interfacing with the merchant's terminal.  The terminal would request the bitcoin addresses known by the card.  The terminal would then search the blockchain for unspent outputs associated with those addresses.  The terminal would build an unsigned transaction and submit the transaction to the card requesting a signature. The card would then display the transaction amount on its built in display.  The card owner would verify that the displayed amount was correct, and would use the card's built in input interface to indicate acceptance.  The card would reply to the terminal with a signed transaction.  The terminal would then broadcast the transaction to the bitcoin network.

Patience, my son.

That's what the chip debit card is for.

Once you insert your card in the terminal, the terminal prompts the customer for their PIN number. The customer inserts their PIN number into the terminal. Since all terminals are PCI compliant nowadays, the inputted PIN is encrypted and cannot be recorded by the merchant or anyone else. This is all done now with Canadian and European debit cards, this is not just theory.

To break it down, when the customer enters in the PIN number via the terminal, this "unlocks" the Bitcoin address private key to proceed with the transaction. The transaction amount displays on the terminal screen, and the customer presses OK if it is correct. Simple.

I worked for many years in the credit card processing industry, so I know about these things. To be honest, I'm surprised this hasn't already been done. If people want to join together to do this, let's go for it

[Gimmelfarb]

True, I was thinking about this last night and the best solution would seem to be built in PIN like the debit cards used in Europe and Canada.
"Chip debit cards encrypt all information stored on them, increasing your safety when completing a transaction."

This will prevent merchant from having ALL your info just on the magstripe.

I still don't understand how this will work.  The merchant can't move the bitcoins from your address unless they have your unencrypted private key.  Once they have your unencrypted private key, there is nothing that prevents them from saving it and re-using it in the future.

It seems that what is needed is a card that has a processor, display, and input interface built into it, the card would be placed with some sort of electrical contacts interfacing with the merchant's terminal.  The terminal would request the bitcoin addresses known by the card.  The terminal would then search the blockchain for unspent outputs associated with those addresses.  The terminal would build an unsigned transaction and submit the transaction to the card requesting a signature. The card would then display the transaction amount on its built in display.  The card owner would verify that the displayed amount was correct, and would use the card's built in input interface to indicate acceptance.  The card would reply to the terminal with a signed transaction.  The terminal would then broadcast the transaction to the bitcoin network.

Patience, my son.

That's what the chip debit card is for.

Once you insert your card in the terminal, the terminal prompts the customer for their PIN number. The customer inserts their PIN number into the terminal. Since all terminals are PCI compliant nowadays, the inputted PIN is encrypted and cannot be recorded by the merchant or anyone else. This is all done now with Canadian and European debit cards, this is not just theory.

To break it down, when the customer enters in the PIN number via the terminal, this "unlocks" the Bitcoin address private key to proceed with the transaction. The transaction amount displays on the terminal screen, and the customer presses OK if it is correct. Simple.

I worked for many years in the credit card processing industry, so I know about these things. To be honest, I'm surprised this hasn't already been done. If people want to join together to do this, let's go for it

umm, this sounds awesome. please someone tell me that people are working on this for bitcoin, as we speak? 

[DiamondCardz]

True, I was thinking about this last night and the best solution would seem to be built in PIN like the debit cards used in Europe and Canada.
"Chip debit cards encrypt all information stored on them, increasing your safety when completing a transaction."

This will prevent merchant from having ALL your info just on the magstripe.

I still don't understand how this will work.  The merchant can't move the bitcoins from your address unless they have your unencrypted private key.  Once they have your unencrypted private key, there is nothing that prevents them from saving it and re-using it in the future.

It seems that what is needed is a card that has a processor, display, and input interface built into it, the card would be placed with some sort of electrical contacts interfacing with the merchant's terminal.  The terminal would request the bitcoin addresses known by the card.  The terminal would then search the blockchain for unspent outputs associated with those addresses.  The terminal would build an unsigned transaction and submit the transaction to the card requesting a signature. The card would then display the transaction amount on its built in display.  The card owner would verify that the displayed amount was correct, and would use the card's built in input interface to indicate acceptance.  The card would reply to the terminal with a signed transaction.  The terminal would then broadcast the transaction to the bitcoin network.

Patience, my son.

That's what the chip debit card is for.

Once you insert your card in the terminal, the terminal prompts the customer for their PIN number. The customer inserts their PIN number into the terminal. Since all terminals are PCI compliant nowadays, the inputted PIN is encrypted and cannot be recorded by the merchant or anyone else. This is all done now with Canadian and European debit cards, this is not just theory.

To break it down, when the customer enters in the PIN number via the terminal, this "unlocks" the Bitcoin address private key to proceed with the transaction. The transaction amount displays on the terminal screen, and the customer presses OK if it is correct. Simple.

I worked for many years in the credit card processing industry, so I know about these things. To be honest, I'm surprised this hasn't already been done. If people want to join together to do this, let's go for it

Or, even simpler, we just use off-the-chain services that allow you to withdraw to the Blockchain whenever you want to. Most people will be using off-the-chain services in the future, anyway.

[jbreher]

To break it down, when the customer enters in the PIN number via the terminal, this "unlocks" the Bitcoin address private key to proceed with the transaction. The transaction amount displays on the terminal screen, and the customer presses OK if it is correct. Simple.

So the machine -- 'PCI Compliant' or not -- signs the transaction with your private key, which you have exposed to it using your PIN? No thanks.

About the day after this gets introduced, somebody is going to create look-alike terminals that send your private key to haxxors in the Ukraine. How would one be able to tell you're dealing with an actual, non-nefarious terminal?

[DannyHamilton]

your private key, which you have exposed to it using your PIN? No thanks.

+1

If the machine isn't under my control, then I don't want it to have access to my private key.

The card itself has to do the signing. The card itself also has to display the transaction so I know that what I'm signing is what I intend to sign.  The card itself therefor needs a physical input device that allows me to tell the card that I authorize the transaction.

The terminal should send the transaction to the card, and accept in response a signed transaction that it can broadcast to the bitcoin network.

Unless you are talking about storing the bitcoins in some sort of "bitcoin bank" and the bank issuing a bank card that allows you to access your account with them, you need to stop thinking about bitcoins as just a payment network.  It is also a currency, and many of the things you think you know from your experiences with credit cards and/or debit cards simply won't apply to bitcoin due to its nature as a currency.

[davidgdg]

To break it down, when the customer enters in the PIN number via the terminal, this "unlocks" the Bitcoin address private key to proceed with the transaction. The transaction amount displays on the terminal screen, and the customer presses OK if it is correct. Simple.

So the machine -- 'PCI Compliant' or not -- signs the transaction with your private key, which you have exposed to it using your PIN? No thanks.

About the day after this gets introduced, somebody is going to create look-alike terminals that send your private key to haxxors in the Ukraine. How would one be able to tell you're dealing with an actual, non-nefarious terminal?

I thought that what was being proposed was just a credit or debit card where you have a BTC denominated bank account. If so, then yes it would make sense (1) to solve the zero confirmation issue (2) to be used where the buyer doesn't have a smart phone.  Whether (1) and (2) will remain a problem for much longer is however doubtful.

If no bank is involved, then I can see it might solve (2) (at some potential risk) but it wouldn't solve (1). To solve (1) the merchant needs a guarantee of payment from a trusted third party such as a bank (yes I know "trusted third party" and "bank" don't always go together, but you know what I mean).

Credit cards for loans (i.e. using them to get credit rather than just making payment) are a different issue. If you want to borrow money, credit cards are a thoroughly bad way to go about it, whether you are borrowing BTC or anything else.

 

[AndrewWilliams]

To break it down, when the customer enters in the PIN number via the terminal, this "unlocks" the Bitcoin address private key to proceed with the transaction. The transaction amount displays on the terminal screen, and the customer presses OK if it is correct. Simple.

So the machine -- 'PCI Compliant' or not -- signs the transaction with your private key, which you have exposed to it using your PIN? No thanks.

About the day after this gets introduced, somebody is going to create look-alike terminals that send your private key to haxxors in the Ukraine. How would one be able to tell you're dealing with an actual, non-nefarious terminal?

Really? Like seriously?

Then you might as well never use a debit or credit card terminal ever again. Let me know how that works out

Sorry but this is the real world. If you are that paranoid just stick to cash


How would one be able to tell you're dealing with an actual, non-nefarious terminal?
If you go to a legit store, you will be dealing with a legit terminal.

If a business uses anything compromised like what you are describing, the FBI and or Secret Service gets involved. (Yes, Secret Service investigates credit card fraud).
Like in this case: http://www.khq.com/story/21757307/secret-service-investigates-skimming-case-at-north-spokane-atm-crime-tracker-kalae-chock-has-tips-to-protect-your-account

[DannyHamilton]

- snip -
I thought that what was being proposed was just a credit or debit card where you have a BTC denominated bank account.
- snip -
If no bank is involved, then I can see it might
- snip -

Part of the problem in this conversation is that several people have put forth their own ideas about how a "bitcoin card" might work.  Some of these ideas assume a "credit card" that allows you to take a bitcoin loan.  Some of these ideas assume a "wallet on a card" where the private keys are stored on the card and transactions are broadcast from the terminal to make payment directly from the bitcoins associated with those private keys. Some of these ideas assume a "bitcoin bank" where the card is a way to represent your account at the bank and the bank takes care of paying the merchant and debiting your account for you.

Several people have made assumptions about what was being discussed without paying attention to the details.  As such, this conversation is a bit of a mess at the moment.  A big part of that confusion is probably first due to the OP's choice of words:

the credit card contains your wallet number as a credit card has a credit card number

It doesn't exactly explain if that "wallet number" is an account number representing your account at a bank, or a bitcoin address, or a bitcoin private key, or a loan authorization number.

The rest of the confusion is probably due to the OP's choice not to stick around and control the direction of the discussion correcting people who wander too far off from whatever it was that they intended.

[DannyHamilton]

Really? Like seriously?

Then you might as well never use a debit or credit card terminal ever again. Let me know how that works out

Sorry but this is the real world. If you are that paranoid just stick to cash

Credit and Debit card terminals don't take money from you.  They inform a bank about a transaction.

Accounts at the bank are generally insured (such as FDIC in the US), and under significant regulations.

If a fraudulent transaction occurs, it is the bank that looses the money (or the insurance provider).

You need to stop thinking of bitcoin as just a payment network.  It is also a currency.  Many of the things you think you know from your experiences with credit cards and/or debit cards simply won't apply to bitcoin due to its nature as a currency

[AndrewWilliams]

@DannyHamilton


No, the whole idea of Bitcoin is take away the middleman (the banks!) from the equation.

No banks are needed for my proposal.



Why create a centralized system for a fundamentally decentralized system. It makes no sense.



What you propose is possible, but it involves a private company basically acting as an exchange like Mt. Gox, but with the ability to communicate with terminals and POS systems and new debit cards. You are then putting all the risk with this one private company.

Hacker wipes them out, you're done. Government intervenes, you're done.

I do not want to use a credit card in a Mt. Gox-y sort of way. THAT is too risky!

[davidgdg]

Really? Like seriously?

Then you might as well never use a debit or credit card terminal ever again. Let me know how that works out

Sorry but this is the real world. If you are that paranoid just stick to cash

Credit and Debit card terminals don't take money from you.  They inform a bank about a transaction.

Accounts at the bank are generally insured (such as FDIC in the US), and under significant regulations.

If a fraudulent transaction occurs, it is the bank that looses the money (or the insurance provider).

You need to stop thinking of bitcoin as just a payment network.  It is also a currency.  Many of the things you think you know from your experiences with credit cards and/or debit cards simply won't apply to bitcoin due to its nature as a currency

Indeed. It is one thing to use a debit or credit card where the bank takes most of the fraud risk. It would be another thing to use some sort of bitcoin card where the person who ends up paying or sorting out the mess if it goes wrong is me.

[AndrewWilliams]

Indeed. It is one thing to use a debit or credit card where the bank takes most of the fraud risk. It would be another thing to use some sort of bitcoin card where the person who ends up paying or sorting out the mess if it goes wrong is me.

Where is the risk? If you use your regular debit card at a terminal location, like a gas pump, in which a thief has installed a skimmer and a videocamera to record your PIN number, you will not get your money back.

You are led to believe in a safety net that is not there.

[DannyHamilton]

Indeed. It is one thing to use a debit or credit card where the bank takes most of the fraud risk. It would be another thing to use some sort of bitcoin card where the person who ends up paying or sorting out the mess if it goes wrong is me.

Essentially what is being suggested is a scenario where you tell each and every merchant that you do business with where you've stored a big box filled with cash.  You continuously add cash to this box as needed.  The merchants then go to your box of cash and remove the amount that you've asked them to remove for payment of whatever you are purchasing.  You agree not to move the box at all, and you trust (hope?) that the merchant will never use their knowledge of the location of the box to go take additional cash that you haven't authorized no matter how desperate they become.

And this is being offered as equivalent to the current credit/debit card security.

You can see how when you think about bitcoin as a currency instead of a payment network, some of the concepts start to fall apart.

[DannyHamilton]

- snip -
Where is the risk? If you use your regular debit card at a terminal location, like a gas pump, in which a thief has installed a skimmer and a videocamera to record your PIN number, you will not get your money back.
- snip -

Of course I will.  I have.  I speak from personal experience.  That is the purpose of the insurance that the banks and processing companies provide.

[briehost]

The best thing about having a BTC Card would be that you liability would be limited to however much you'd want to put on the card. You could keep a few extra bitcoin on your phone in case of emergency. Everything else can be left in your armory client at home.

[AndrewWilliams]

- snip -
Where is the risk? If you use your regular debit card at a terminal location, like a gas pump, in which a thief has installed a skimmer and a videocamera to record your PIN number, you will not get your money back.
- snip -

Of course I will.  I have.  I speak from personal experience.  That is the purpose of the insurance that the banks and processing companies provide.

The "insurance" you speak of does not exist.

The only thing credit card companies and banks offer is chargeback protection.

It can only be used in the event of:

1. Straight card theft. But not when PIN number is used! Banks will NEVER NOT ALWAYS give you money back when your correct PIN is used.
2. Non-receipt of goods. For mail orders, delivery of goods.
3. Broken or non-working items. If you buy something and it stops working. Time limit on this.
b. Overcharging

...And all this does is start the chargeback process. The merchant is given the opportunity to write a letter of explanation and provide documentation of their side.

If what you are purchasing could be better covered by a credit card for the above three things, by all means, use a credit card. For everything else, There's Bitcoin Credit Card




That said, Bitcoin credit card would not be ideal for buying goods on the internet or over the phone (duh, just do it given the tools already available), or any kind of purchase where you do not receive the goods or services right away.

The best thing about having a BTC Card would be that you liability would be limited to however much you'd want to put on the card. You could keep a few extra bitcoin on your phone in case of emergency. Everything else can be left in your armory client at home.

Exactly!
No reason to go bananas and expect a crazy amount of security in regards to the Bitcoin Credit Card, just put as much on it as you want.

[DannyHamilton]

- snip -
Where is the risk? If you use your regular debit card at a terminal location, like a gas pump, in which a thief has installed a skimmer and a videocamera to record your PIN number, you will not get your money back.
- snip -

Of course I will.  I have.  I speak from personal experience.  That is the purpose of the insurance that the banks and processing companies provide.

The "insurance" you speak of does not exist.

The only thing credit card companies and banks offer is chargeback protection.

It can only be used in the event of:

1. Straight card theft. But not when PIN number is used! Banks will NEVER give you money back when your correct PIN is used.
2. Non-receipt of goods. For mail orders, delivery of goods.
3. Broken or non-working items. If you buy something and it stops working. Time limit on this.
b. Overcharging

You aren't paying attention.

Of course I will.  I have.  I speak from personal experience.

I give up.

If you want to create such a device, go ahead.

If you want to use such a device, go ahead.

I'm sure you will find others who think the way you do.

The effort will succeed or fail on its own merits.  (I'd be betting on fail).

[AndrewWilliams]

Indeed. It is one thing to use a debit or credit card where the bank takes most of the fraud risk. It would be another thing to use some sort of bitcoin card where the person who ends up paying or sorting out the mess if it goes wrong is me.

Essentially what is being suggested is a scenario where you tell each and every merchant that you do business with where you've stored a big box filled with cash.  You continuously add cash to this box as needed.  The merchants then go to your box of cash and remove the amount that you've asked them to remove for payment of whatever you are purchasing.  You agree not to move the box at all, and you trust (hope?) that the merchant will never use their knowledge of the location of the box to go take additional cash that you haven't authorized no matter how desperate they become.

And this is being offered as equivalent to the current credit/debit card security.

You can see how when you think about bitcoin as a currency instead of a payment network, some of the concepts start to fall apart.

I fail to see your point.

Why is the technology used for debit transaction using encrypted PINs, NOT good enough for Bitcoin?

It's been used on a scale at least 1,000 X larger than Bitcoin, and has succeeded. Why reinvent the wheel?

A network is only going to be as secure as the users using it.

You aren't paying attention.

No, you aren't. Just because you were covered on your theft, it is not the rule.

"A major factor in consumer protection is the card company’s liability policies. Federal law limits consumer liability for unauthorized debit payments to $50, if the consumer reports the fraud within two business days (the cap goes up to $500 if the report is not timely [2 days!]). This means that the consumer has to pay $50-500 dollars before the card company will cover the rest. Major card companies like Visa and MasterCard have “zero liability” for unauthorized transactions, meaning that if the consumer meets the requirements, they don’t have to pay anything and are reimbursed.

However, this “zero liability” only applies to signed transactions. Every company seems to have their own policy when it comes to PIN-based transactions. MasterCard does not extend zero liability protection to PIN purchases, while other financial institutions do. For this reason, it’s important to check the policy on your debit account. Check the back of your card to find out which networks handle your transactions (ex: the Star network), and then call your bank to find out if you qualify for more than just basic federal protections."

Read this: http://banking.about.com/od/checkingaccounts/a/stolendebitcard.htm

I give up.

If you want to create such a device, go ahead.

If you want to use such a device, go ahead.

I'm sure you will find others who think the way you do.

The effort will succeed or fail on its own merits.  (I'd be betting on fail).

Someone woke up on the wrong side of the bed this morning, me thinks.

[AndrewWilliams]

Indeed. It is one thing to use a debit or credit card where the bank takes most of the fraud risk. It would be another thing to use some sort of bitcoin card where the person who ends up paying or sorting out the mess if it goes wrong is me.

So instead you want a private company like Mt. Gox to hold your hand if anything bad happens?

What happened to self responsibility.




Making a Mt. Gox like company in charge of chargebacks and disputes is an accident waiting to happen.
You are basically putting that private company at huge risk of having funds seized or stolen.
Then you want to rely on them for chargebacks??? That's madness. You are giving a private company, without any oversight, the ability to manipulate transactions. They can steal merchant's and consumer's money using the chargeback model. It's ridiculous.

Just dont use Bitcoin Credit Card for risky transactions. Use it when buying a coffee. Use it when buying groceries. Use it when buying furniture. Don't use it to order things online or over the phone. That simple.

[DiamondCardz]

Okay, seriously, couldn't a corporation similar to a Building Society hold your Bitcoins off-the-chain for things like debit card payments? Much easier than having your private key exposed, and it's pretty safe.

[AndrewWilliams]

Okay, seriously, couldn't a corporation similar to a Building Society hold your Bitcoins off-the-chain for things like debit card payments? Much easier than having your private key exposed, and it's pretty safe.

You could, it's just not necessary and just invites problems.

Private key would not be exposed with encrypted debit chip, as it is not with current chipped debit cards.

[briehost]

There's no reason to build on top of failed convention. PIN numbers are ==! FTW

2 FA, that's a little more promising. Bio-metric scanning, even better. The sky is the limit on security measures.

I believe consumer financial products should have as much security as the user wishes, and no financial product should be secured by a 4-6 digit numeric password, besides those holding less than a hundred simoleons

[AndrewWilliams]

There's no reason to build on top of failed convention. PIN numbers are ==! FTW

2 FA, that's a little more promising. Bio-metric scanning, even better. The sky is the limit on security measures.

I believe consumer financial products should have as much security as the user wishes, and no financial product should be secured by a 4-6 digit numeric password, besides those holding less than a hundred simoleons

briehost, while those are certainly cool ideas, they are not realistic for getting Bitcoin implemented in the modern day economy.
(Also, bio-metric scanning would take away from the valuable privacy of Bitcoin.)

Unfortunately, cost and adoption is the limit on security measures.

To do what you are suggesting would require terminal manufactures to start making these units, and distribute them. You are talking about a huge scaling.
It will not make sense for a terminal manufacturer to do this for Bitcoin with such low adoption; if anything, it would first need to be adopted by the credit card companies, then Bitcoin.

Right now, terminals cost $100-$400 wholesale. A high tech solution like you propose would cost start at $800 wholesale, huuuuge price difference and merchant's would not want to change out all their terminals, just for Bitcoin. (Avg. merchant has 3 terminals for different lanes.)

Agreed, security ain't what it should be. But right now the goal is mass adoption of Bitcoin, not to rewrite the security protocols of digital transactions.

[briehost]

But right now the goal is mass adoption of Bitcoin, not to rewrite the security protocols of digital transactions.

Very true AndrewWilliams. I was not sure how long-term we were speaking!

I believe the best way to go about this without major overhaul I have seen is definitely something like BitInstant's attempt at creating a pre-paid credit card. You have a deposit address on your card, the private key being held by the card issuer. To reload your card simply send Bitcoin. There is a lot of money to be made by the first to accomplish this. It does require trust of a centralized institution, however you can limit your trust by not depositing your whole hoard to one card, and there is no limit to how many such institutions (issuers) may exist.

[AndrewWilliams]

But right now the goal is mass adoption of Bitcoin, not to rewrite the security protocols of digital transactions.

Very true AndrewWilliams. I was not sure how long-term we were speaking!

I believe the best way to go about this without major overhaul I have seen is definitely something like BitInstant's attempt at creating a pre-paid credit card. You have a deposit address on your card, the private key being held by the card issuer. To reload your card simply send Bitcoin. There is a lot of money to be made by the first to accomplish this. It does require trust of a centralized institution, however you can limit your trust by not depositing your whole hoard to one card, and there is no limit to how many such institutions (issuers) may exist.

I must admit I was a littttttle bit jealous to read about BitInstant doing that, but then I read the article.

All they are doing is converting BTC to fiat and putting that value on a prepaid card. They are just MasterCard prepaid cards. All they are doing is acting as a money exchanger (and with that, privacy is lost to the consumer).
Not a game changer IMO. Nice product for them tho



I'm referring to the next 3-12 months.

[briehost]

Very true, it's not something super complicated. It could have worked if it was not for poor execution.

[AndrewWilliams]

So it failed? :/

[kuusj98]

Would be pretty awesome to say the least.
But you got the companies that take big gambles as value of Bitcoin fluctuates more than USD/EUR

[AndrewWilliams]

Would be pretty awesome to say the least.
But you got the companies that take big gambles as value of Bitcoin fluctuates more than USD/EUR

In my system, the Point of Sale software automatically adjusts the price rung up at the register to reflect the current price in USD, in Bitcoin, using online lookup.

[markjamrobin]

its just if we have bank for bitcoin and then do through this all its better and safe way to use these cards every where

Of course that means that you have to trust the bank.

I suppose eventually there could be bitcoin banks that are insured by a government (equivalent to the current U.S. FDIC), and that are under strict regulation, but we are probably a long way off from anything like that.  It isn't even clear yet if any government or major insurance underwriter would ever be willing to back any bitcoin banks.

The U.S. can't back BTC banks, because they can't print BTC arbitrairly.

[briehost]

So it failed? :/

How long has it been since we've been looking at this page?

Would be pretty awesome to say the least.
But you got the companies that take big gambles as value of Bitcoin fluctuates more than USD/EUR

Not so much a problem if you can find high-volume buyers who want to avoid paying the fees at gox. Not very difficult these days depending on where you are. I feel that there are some services out there which only accept Bitcoin to go long on the currency without paying fees. One example that I have personally used is billpayforcoins.com, though I have only used them for a $50 payment. They offer BTC to USD Check sent anywhere in the US at the bit-pay spot rate. They charge 0% fees and even cover postage.

[arnuschky]

But I think version 9 of the client will allow for zero-confirmation purchases by doing a double-spend check.

What are you trying to say? "Double-spend check"? How is this supposed to work? Reference?

[davidgdg]

Indeed. It is one thing to use a debit or credit card where the bank takes most of the fraud risk. It would be another thing to use some sort of bitcoin card where the person who ends up paying or sorting out the mess if it goes wrong is me.

Where is the risk? If you use your regular debit card at a terminal location, like a gas pump, in which a thief has installed a skimmer and a videocamera to record your PIN number, you will not get your money back.

You are led to believe in a safety net that is not there.

That depends upon the bank and the local law, but certainly in the UK the bank would almost certainly take the loss. Generally speaking over here the customer only bears the loss from fraudulent activity on his account if he has been negligent.  Otherwise the bank (or their insurers) take the hit.

[markjamrobin]

Indeed. It is one thing to use a debit or credit card where the bank takes most of the fraud risk. It would be another thing to use some sort of bitcoin card where the person who ends up paying or sorting out the mess if it goes wrong is me.

Where is the risk? If you use your regular debit card at a terminal location, like a gas pump, in which a thief has installed a skimmer and a videocamera to record your PIN number, you will not get your money back.

You are led to believe in a safety net that is not there.

That depends upon the bank and the local law, but certainly in the UK the bank would almost certainly take the loss. Generally speaking over here the customer only bears the loss from fraudulent activity on his account if he has been negligent.  Otherwise the bank (or their insurers) take the hit.

On credit cards, the person accepting the card takes the risk, because of chargebacks. With BTC, I think the bank or even the user might get screwed.

[jbreher]

To break it down, when the customer enters in the PIN number via the terminal, this "unlocks" the Bitcoin address private key to proceed with the transaction. The transaction amount displays on the terminal screen, and the customer presses OK if it is correct. Simple.

So the machine -- 'PCI Compliant' or not -- signs the transaction with your private key, which you have exposed to it using your PIN? No thanks.

About the day after this gets introduced, somebody is going to create look-alike terminals that send your private key to haxxors in the Ukraine. How would one be able to tell you're dealing with an actual, non-nefarious terminal?

Really? Like seriously?

Then you might as well never use a debit or credit card terminal ever again. Let me know how that works out

Unrelated scenario is unrelated.

Credit card companies are trusted central points of control. No card is even required. Certainly, you've verbally authorized purchases before? The only reason the CC system works at all, it that CC companies make defrauded CC holders whole after any fraud.

In bitcoin, there is no such central party. Once your key is in the wild, nobody can recall it.

Sorry but this is the real world. If you are that paranoid just stick to cash

How would one be able to tell you're dealing with an actual, non-nefarious terminal?
If you go to a legit store, you will be dealing with a legit terminal.

Bullshit. There is a vast spectrum of 'stores' from mobile kisoks using their iPhones to connect to CC networks, to WalMart. Again, if you cannot see that you have _no way_ to determine whether your are swiping a genuine certified* known bitcoin terminal, or a clever visual copy created by nefarious individuals, than I claim you are being intentionally obtuse.

*I assume you are envisioning some certification process, as I imagine is required for PCI compliance.

[jbreher]

I thought that what was being proposed was just a credit or debit card where you have a BTC denominated bank account.

I thought so too, until this flight of fancy about the terminal appeared.

Incidentally, there are solutions involving MasterCard-branded debit cards, loaded via bitcoin. I had one for a bit, until the issuing bank got scared off by our insane US finance regulations. Last I looked, they were still available to people who live outside the USA.

[johnchloee]

The points which are mentioned in this thread are correct but the usage of credit card members are increased day-by-day. Can you share some more information regarding this.


gspay scam

[howardb]

Would make sense for some truly trusted institution to issue a practical physical currency backed by Bitcoin (as apposed to the current novelty coins) just like the old gold standard! Ironically we would then have the opposite of the fiat notes having to issue bigger denominations from time to time, we would need smaller and smaller ones!

But seriously, this would at a stroke put bitcoin in the hands of the worlds unbanked, none internet connected masses, as well as solving the confirmation time issue for at till transactions.

[supersajin]

The day Bitcoin manages to put Bitcoin purchasing power into the hands of the masses i.e. credit card is the day we see mass adoption and see 2-3-4-5K Bitcoin price.

[Nathonas]

Do you think a Bitcoin credit card could succeed as a mainstream form of payment?

As in, the credit card contains your wallet number as a credit card has a credit card number...

Thoughts appreciated  

How do you deal with people that don't pay back what they owe? Bitcoin is decentralized, that's a big part of the innovation of the currency. Also personally, I hate credit cards. They're nothing but a way to put people into debt and buy shit they can't afford.

[kies1107]

Amount shows on the terminal for your approval (much like a debit transaction). You press Yes (green) to accept, or Cancel (red) to decline.
Perhaps a pin code could be added somehow, this would be very hard to implement universally though, and I don't think it would be feasible, at least not at first.

[Musent]

A lot of risk, but it could be done and probably will be done in the near future. If it does, hopefully it works.

[rnp]

Instead of worrying about plastic, why not NFC?

https://bitcointalk.org/index.php?topic=29490.0

[boumalo]

Instead of worrying about plastic, why not NFC?

https://bitcointalk.org/index.php?topic=29490.0

We are use to plastic cards but paying with bitcoin-qt app with your Android works pretty well

It is safer not to keep too much bitcoins on your phone though, like you don't let too much money in your wallet

[E.exchanger]

iam sure there have been many attempts to this before as well but all comes along with many risks so i don't think people will most likely use a cc even if there will be one.

[rnp]

We are use to plastic cards but paying with bitcoin-qt app with your Android works pretty well

It is safer not to keep too much bitcoins on your phone though, like you don't let too much money in your wallet

I know, but given Credit Cards are a "Pull" technology, and NFC can be a "Push, on demand" tech where you only expose what you want to spend, I was just thinking a mobile hot wallet with NFC would be an easier hill to climb. Yeah, you'd need buy-in from processors, but it could avoid a few issues with dealing with card companies.

I have had chipped cards and now have the NFC wallet for my credit cards, but I admit I love to try things out early.

I very rarely carry cash unless I'm heading to the casino, so I get the point about carrying money.