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Author Topic: Bitcoin credit cards?  (Read 6435 times)
johnyj
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September 27, 2013, 05:56:36 PM
 #21

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 Cheesy

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row5_seat47
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September 27, 2013, 06:09:11 PM
 #22

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

Paypal’s Anonymity Play

"Instant Disposable Payment Card"

http://letstalkbitcoin.com/316/

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September 28, 2013, 05:43:00 AM
 #23

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..
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September 29, 2013, 01:45:48 AM
 #24

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.
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September 29, 2013, 03:32:18 PM
 #25

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
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September 30, 2013, 06:44:02 PM
 #26

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.

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September 30, 2013, 07:56:50 PM
 #27

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.
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September 30, 2013, 09:53:48 PM
 #28

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

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BitAddict
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October 01, 2013, 12:59:56 AM
 #29

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.
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October 01, 2013, 06:10:52 AM
 #30

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
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October 01, 2013, 06:33:02 AM
 #31

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?"

Smiley


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
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October 01, 2013, 06:36:45 AM
 #32

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.


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BitAddict
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October 01, 2013, 09:27:34 AM
 #33

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 Tongue
DannyHamilton
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October 01, 2013, 01:32:43 PM
 #34

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
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October 01, 2013, 01:37:56 PM
 #35

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
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October 01, 2013, 01:57:51 PM
 #36

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.

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October 01, 2013, 03:52:09 PM
 #37


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 Tongue

@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 Smiley
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October 01, 2013, 04:01:24 PM
 #38

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...
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October 01, 2013, 04:09:18 PM
 #39

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.

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October 01, 2013, 04:18:26 PM
 #40

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 Wink


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