Video: We made Bitcoin this easy to use.

[bitfreak!]

Interesting stuff. Based on what I've read so far it seems like all the private keys are stored on the "Hardware Security Module" but I don't understand how transactions can be processed if the HSM machine is supposed to be isolated from the internet. Wouldn't it be smarter to store the private keys on the "client card" and encrypt them with the PIN or something? Can you please explain how the transactions are processed or point me to an explanation on your website. Thanks.

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[hilariousandco]

This is amazing. You need to boost your marketing, it seems the more terminals that are installed in department stores, the more people will come to know/use/love BTC.

Imagine if Walmart or Target had these! Bye bye credit cards!

I don't think Bitcoins will get rid of credit, unless there's banks that start offering Bitcoin credit cards haha. Maybe in the distant future.

[practicaldreamer]

I don't thin Bitcoins will get rid of credit

Yes - this is a good point. Lets assume BTC was the primary global currency. People are still going to wish to purchase that for which they don't currently have enough BTC - so they are going to need credit.

   And if they need credit they will be charged for that credit in some fashion by the creditor (ie. interest payments). Present day fractional reserve banking extends credit and has got us into this mess that BTC is to help us overcome.

   But over time, how would BTC avoid creating credit and debt ?

   Why wouldn't BTC banks develop along the same lines as existing ones ? I know that the money supply is fixed in BTC - but thats not to say that credit can't be generated off the back of it (promissory notes ?).

     Surely this is where regulation comes in to it - Government regulation to prevent the dangerous and excessive FRB debacle (?) repeating over. However, regulation hasn't worked for fiat currencies - why would it work for BTC ? I know people will say that its precisely in the fact that BTC can't be regulated that its strength lay - but wouldn't zero regulation ultimately leave us back where we started ?

   I know crowd funding/peer to peer lending is happening - but in a world where there are such huge disparities/inequalities in the distributions of wealth/power/opportunity those with are always going to be much greater holders of BTC than those without, so to speak.

   I'm just thinking aloud here - and hoping someone can explain to me why this won't happen.

[brioche]

hey that looks very easy to use

[hilariousandco]

I don't thin Bitcoins will get rid of credit

Yes - this is a good point. Lets assume BTC was the primary global currency. People are still going to wish to purchase that for which they don't currently have enough BTC - so they are going to need credit.

   And if they need credit they will be charged for that credit in some fashion by the creditor (ie. interest payments). Present day fractional reserve banking extends credit and has got us into this mess that BTC is to help us overcome.

   But over time, how would BTC avoid creating credit and debt ?

I don't think BTC will get rid of credit/debt. There will always be debt because there will always be greed and/or people willing to get themselves into debt. Debt is a great way of getting money out of people who have none.

[nvK]

So, you basically entered a pin or something into the terminal?  How many confirmations were required for the transaction in the video?  When did it last update the exchange rate? (I'm assuming the clerk entered a US Dollar amount into the terminal).

On your site you have this:

How many bitcoins and litecoins can I withdraw at a time?

Full liquidity: all your funds are available to you at 24/7 with no limits! Unlike our competitors, we designed our security systems around dedicated HSMs and so we are able to let you have all your funds out at any time. Yes, that means no matter how much, you can withdraw 100% in a single transaction.

Would you consider allowing customers to set daily limits on their card? I would hate to think of someone's kid getting their card and being able to wipe it out entirely. Also, in the US, transactions over $10k USD sometimes require more documentation ('cause you know, anyone with $10k is a terrorist or a drug lord here in the US)

This looks really cool.

Yes, limits are coming. We already have them on the merchant side.

[nvK]

Interesting stuff. Based on what I've read so far it seems like all the private keys are stored on the "Hardware Security Module" but I don't understand how transactions can be processed if the HSM machine is supposed to be isolated from the internet. Wouldn't it be smarter to store the private keys on the "client card" and encrypt them with the PIN or something? Can you please explain how the transactions are processed or point me to an explanation on your website. Thanks.

Coinkite is internally based on BIP32 Hierarchical Deterministic (HD) wallets residing in a Hardware Security Module (HSM). Each new member receives a welcome email which contains the "xpubkey" (extended public key) for their deposits and an encrypted (AES-256-CBC) copy of the corresponding "xprivkey". The xpubkey (used for both Litecoin and Bitcoin) can be used by the account owner to see all public keys associated with their account (both past and future). Combined with the "audit" feature, you can fetch a list of all UTXOs (unspent transaction outputs) associated with your account and verify the public key's subpath from the given xpubkey. Similarly, you can verify that the UTXO is correctly stored on the blockchain by checking its amount at a third party data service.

In the event of the closure or other failure of the business, we will publicize the symmetric key protecting the xprivkey values that have been distributed to members. With that key, each user can recover their own funds by re-generating the private keys for each UTXO.

We understand the inherent risk of trusting a third party with the private keys for your bitcoins, and we feel this application of BIP32 helps to address these concerns should the business disappear. We consider this system to be "full-reserve" since the users are in a position to verify that their funds are not being used for any other purpose than safe-keeping while on deposit at Coinkite.

[nvK]

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I don't think BTC will get rid of credit/debt. There will always be debt because there will always be greed and/or people willing to get themselves into debt. Debt is a great way of getting money out of people who have none.
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I agree, BTC is like cash, you either have or you don't. But, I think soon enough BTC landing services will appear.