WOW great, please say more! I am persuaded that the Bitcoin economy will really take off when everyone, everywhere, will be able to use BTC directly for small transactions like buying a coffee or food, without having to change to traditional currency first (which can be controlled and killed by the state).
Its what you described, but instead of the merchant requiring an active database of bills, all he does is post a public key, and anyone can send money to a bill under his public key. Bob's Bar and Grill doesn't need to have a database of dollar bills, or worry about disputes. Either the bill is in the blockchain, or it isn't.
+ Bob's Bar and Grill (Public Key)
- A12345678B ($1 USD bill)
- C47891235F ($1 USD bill)
+ Alice's Coffee shoppe (Public Key)
- F78426288B ($1 USD bill)
- E29887103A ($1 USD bill)
A bit technical, and looking for a way to make it easy to understand.
Thanks for the interest, will post here on launch!