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January 10, 2014, 07:53:25 AM |
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This idea is more theory than anything else.
The basic concept here is to create a type of paper money or card that is tied to a wallet containing an amount of BTC same as denominated on the card. The issuer of the card retains the private key for each wallet. Obviously, this makes it impossible to move money out of the wallet. A QR code on the card allows the holder to check that there is in fact BTC associated with that card. The issuer must be willing to redeem the card in exchange for BTC. This could be possible by either giving the holder the private key to that wallet but there is a more desirable method. That method would be for the issuer of the card to transfer BTC to the wallet of the redeemer upon surrender of the card. This allows the issuer to re-circulate the card or destroy the card if worn out and print a new replacement.
I think these would have to start out as small denominations at first such as 0.005 BTC to facilitate small, everyday transactions as well as to foster development of trust. The issuer would have to be trusted to not spend the money in the wallets. To facilitate this trust, I think the issuer should publish all the wallet addresses of each card online so that people can check activity on those wallets to verify that all cards issued are legitimately backed by BTC. This has a distinct advantage over FIAT currency which are redeemable for nothing and backed by nations that are trillions of dollars in debt. Also, if historical patterns continue, these cards would gain increasing purchasing power whereas FIATs like USD are losing purchasing power.
I think this idea bridges the divide between online currency and in-hand currency. You wouldn't need a computer or anything electronic to perform a transaction, just acceptance between the two parties.
By not having the private key on the cards, they can't be spent by any holder of the card and that means that any in circulation would have BTC tied to it.
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