Why not print paper wallets for coins but with specific values on the face.
Emitting "bitcoin notes" seems to be a good idea. I have already thought about it. The issue is : how you can be sure that no one owes the private keys?
If the private key is folded inside (like most of regular paper wallet), how can you be sure the firm or guy who printed it didn't copy it? You have to trust the publisher. And also you have to trust the anti-reading of hidden private key: trust that no on has unfolded then fold back the priv key code. I know what I mean, I gave around 50$ in a bitcoin paper-wallet to my brother. He has never experienced bitcoin, that's definitively an uncommon gift. But he trusts me (I haven't kept nor copy priv key, printed it in a relatively secure environment, I printed only once, no ones could unfold it before I gave it, etc...)
Also the publisher can just generate a public address (from a private seed) and print it alone (without the private key folded/embeded) and charge 1 BTC. But again users have to trust publisher that they actually did that (meaning not copying nor storing private keys).
Your idea is near from Casascius coin, except this would be paper instead of coins. In the case of Casascius, I think people (at least customers) trust him and then there is a temper proof (
more or less). So in your case, you still need trust from people.
One might imagine a new system where public key can be generated without private key (without seed? without input?), so that makes non-recoverable address. Then buyer of "bitcoin" notes still trust that publisher did really use this generation method (if exists) to print money. Maybe a
system like vanity could be used. Also there is issue about temper/anti-copy/genuine proof, it needs a mechanism to prevent copy. Even with a private key that has never be known, it is very easy to copy a paper. For example you can check with a QR that the public address printed has the dedicated fund in chain. But how could you be sure there's no other copy? About counterfeiting/copying Casascius coins are better about this, since it's harder to copy a coin that a paper (without anti-copy method like hologram or so)
[ I called "publisher" the entity which prints the notes]
This are all my though about this topic, I really hope some other guys would imagine solutions to address these issues. Giving "physical" aspect to bitcoin is a good idea to make bitcoin more famous and "nicer" for the masses. At first, it can be seen as reverse from the use of a digital thing that can carry money over landlines. But this topic can have practical application for every user as cold storage, transfer to anybody without computer nor internet, transfer without memory usage to improve safety,...
