How to Turn Bitcoin Into the Top Payment Network and the Currency of the Future

[ArticMine]

seriously.  This US citizen tech and finance savvy newbie is at day 9 attempting to buy $50 of BitCoin.  I think I might be able to by the end of the week.

Here is Canada one can do this in a matter of a few hours
1) Sign up for an account at https://www.cavirtex.com/
2) Walk to the nearest Royal Bank of Canada and deposit $50
3) In 1-3 hours your account at https://www.cavirtex.com/ is credited
4) Purchase Bitcoin and withdraw to wallet

[Jon]

I thought about it long and hard.

Phones are the solution if people accept them as such.

However, we still need a card. I don't want to see people completely tethered to their phones. The fact is we need terminal software to connect to the Bitcoin network. This will allow for both cards and phones with the same hardware.

When Bitcoin cards begin to be accepted, so will phone payments through RFC.

Both will coexist.

I apologize for any close-mindedness. I am just biased towards phones. They stress me out.

[Rassah]

I think the biggest barrier to all of this is that Bitcoin is a push only system. There's no way for Bitcoin to get pulled from an account, like fiat can get pulled from banks or credit cards. Short of having a pre-loaded debit card serviced by some entity in the exact same way as banks do with fiat now, I really can't see how this can work. I do wish it could though.

[cunicula]

Why not just set up VISA debit cards funded with bitcoin balances, converting bitcoins into USD etc. whenever the account holder makes a USD transaction?

[qualalol]

On point 1: a site like Ebay that mainly (or even exclusively) uses bitcoin would be a great idea... (I don't have much clue about silkroad, but I'm getting the impression it's a pretty similar concept. For the average Joe however it's not usable, so a nice and easy website on the "normal" web would be wise). You could easily integrate escrow into the site using bitcoin.

[Matthew N. Wright]

I apologize for any close-mindedness. I am just biased towards phones. They stress me out.

This is how to communicate. Welcome to the human race brother.

[kwukduck]

If it's too hard for 'normal' people to install an app on their phone, start it, scan code, click send... then im afraid we've lost already.

Also, remember that if you use cards with private keys from which the POS terminals extract the bitcoins for the purchase, the entire blockchain has to be rescanned for that key, last time i did this it took a while.

[Rassah]

If it's too hard for 'normal' people to install an app on their phone, start it, scan code, click send... then im afraid we've lost already.

Also, remember that if you use cards with private keys from which the POS terminals extract the bitcoins for the purchase, the entire blockchain has to be rescanned for that key, last time i did this it took a while.

If you are adding a private key with all the transactions to your wallet, yes. If all you're doing is signing the public key with a private key, then no, all you need to do is sign the key and broadcast the transaction. You don't even need a copy of the blockchain.

I wonder if it's possible to sign a transaction on a keyfob or some similar small NFC device, without the terminal that's transmitting the transaction getting a copy of the private key? If yes, maybe the device could be something like the pic below with a button, so the terminal would display the amount, and if you agree, you hold down the button, bring the keyfob up to the terminal, the device signs the public address with the private key and amount, and the terminal only broadcasts the signed transaction without ever seeing the private key.



I have a feeling my lack of understanding of cryptography means I have no idea what I'm talking about.

[Rassah]

Just talked to a friend of mine who's more familiar with cryptography, and apparently something like this is possible. The keyfob would have to store the public and private keys, be able to receive NFC data as well as send it, and be able to sign transactions:

Sales terminal comes up with the amount.
Swiping the keyfob transmits the public address to the terminal.
Terminal creates a transaction with the public address and the amount, displaying the transaction (and checking if enough funds are available).
Customer verifies the amount, and swipes the keyfob again.
Terminal uploads the newly created transaction to the keyfob, the keyfob signs it with the private key, and transmits the signed transaction back to the terminal.
Terminal uploads the transaction to the Bitcoin network.

A physical button on the keyfob that you need to press to transmit would keep it secure, and conserve battery power. No need for displays or other buttons. hopefully something that has a tiny amount of flash, just enough CPU power to sign keys,  and an NFC transmitter/receiver won't be too costly.
Comments?

[DeathAndTaxes]

Just talked to a friend of mine who's more familiar with cryptography, and apparently something like this is possible. The keyfob would have to store the public and private keys, be able to receive NFC data as well as send it, and be able to sign transactions:

Sales terminal comes up with the amount.
Swiping the keyfob transmits the public address to the terminal.
Terminal creates a transaction with the public address and the amount, displaying the transaction (and checking if enough funds are available).
Customer verifies the amount, and swipes the keyfob again.
Terminal uploads the newly created transaction to the keyfob, the keyfob signs it with the private key, and transmits the signed transaction back to the terminal.
Terminal uploads the transaction to the Bitcoin network.

A physical button on the keyfob that you need to press to transmit would keep it secure, and conserve battery power. No need for displays or other buttons. hopefully something that has a tiny amount of flash, just enough CPU power to sign keys,  and an NFC transmitter/receiver won't be too costly.
Comments?

Better would be using a smartcard with a display and keypad.

merchant displays total: 123.49 BTC.
you enter in 123.49 into keypad.
card prompts you for pin (optional), you enter pin.
Card displays amount & "OK?" (for verification).
Hit OK, swipe/NFC and leave.

The technology already exists:


Making these cards in bulk is pretty cheap (~$30 for 1000+ dropping to <$10 for millions).  The card doesn't need the blockchain.  It simply needs a few public/private keypairs and the ability to perform ECC.

The technology isn't the hard part.  Hydrogen fuel cell technology exists too.  Getting a hydrogen fuel station on ever corner is the hard part.  Getting every merchant to accept this Bitcoin card is the hard part.

It is a capital & infrastructure issue not a technology one.  I do agree with most of the reponses that a card which hands the merchant the private key is beyond useless.  Comparing it to credit card is dubious.  consumers have fraud protection on credit cards.  Using credits cards isn't anonymous.  A merchant (or just smart employee working for honest merchant) could steal private keys with near immunity.

Whatever system is devised it needs to be that the card/phone/device does everything and only hands the signed transaction to the merchant (who verifies it and submits it to the blockchain or 3rd party processing service).

[Rassah]

I was aiming for the simplest, and thus cheapest option. If NFC terminals only need a software plugin for this to work, something like a keyfob without any display or buttons would be way cheaper to mass produce. Also, the discussion was about making this as easy as using credit cards. Swiping a keyfob once or twice is much simpler than typing out amounts on tiny buttons.
Plus having a slightly bulkier device attached to the keychain means there won't be expensive size restrictions requiring more expensive tiny components. I agree, getting the infrastructure in place is the biggest hurdle, but getting cheap prototypes that don't require hundreds per device just for a proof of concept would be important, too.

[DeathAndTaxes]

I was aiming for the simplest, and thus cheapest option. If NFC terminals only need a software plugin for this to work, something like a keyfob without any display or buttons would be way cheaper to mass produce.

You say "customers verifies amount".  How?

Like I said smartcards with displays and keypads are pretty cheap.  The cost of card is nothing compared to the cost of infrastructure, and large enough merchant support to make any venture worthwhile.

[Rassah]

I was aiming for the simplest, and thus cheapest option. If NFC terminals only need a software plugin for this to work, something like a keyfob without any display or buttons would be way cheaper to mass produce.

You say "customers verifies amount".  How?

Like I said smartcards with displays and keypads are pretty cheap.  The cost of card is nothing compared to the cost of infrastructure, and large enough merchant support to make any venture worthwhile.

Amount is displayed at the cash register/terminal. At least in this case, if the store displays 8BTC and charges 80, you have an irrefutable, time stamped record that this money was spent at this time, and know who swindled you.

And, again, I'm going for ease of use before cost. Small displays and buttons will be a problem for people with poor eyesight, shaky or thick fingers, or with gloves, and they take time to type in amounts (especially if Bitcoin rises in value, and you have to type 0.00473440 or something). With a swipe all you do is confirm the price on the cash register and swipe.

[Matthew N. Wright]

The technology already exists:

https://bitcointalk.org/index.php?topic=46366.msg584701#msg584701

Agreed.

Except in doing my own research over the past 4 months or so on those cards, there is looking like less and less chance of ever getting them to work standalone unless we can get the proper microchip custom built for hashing. It's a trick thing but it's a better investment than bulky card-shaped USB drives and plastic swipe cards.

[foggyb]

seriously.  This US citizen tech and finance savvy newbie is at day 9 attempting to buy $50 of BitCoin.  I think I might be able to by the end of the week.

Here is Canada one can do this in a matter of a few hours
1) Sign up for an account at https://www.cavirtex.com/
2) Walk to the nearest Royal Bank of Canada and deposit $50
3) In 1-3 hours your account at https://www.cavirtex.com/ is credited
4) Purchase Bitcoin and withdraw to wallet

+1

CANADA RULES.
MOVE TO CANADA.

In all seriousness, Boss, the platform (bitcoin) is here. We just need the innovation to implement the user-friendly experience you're looking for. At the moment, I think bitcoin is easy for about 1/4 of the population (ie. 16-30 year-old tech-savvy consumers). We're getting there, slowly.

[DeathAndTaxes]

Except in doing my own research over the past 4 months or so on those cards, there is looking like less and less chance of ever getting them to work standalone unless we can get the proper microchip custom built for hashing. It's a trick thing but it's a better investment than bulky card-shaped USB drives and plastic swipe cards.

There are some smartcards capable of ECC and SHA-256.  Performance likely is bad but you are only doing a few computations per transactions.  Smartcards tend to have very limited flashrom though so space would be "tight".  The fact that Bitcoin uses a "weird" ECC curve doesn't help either.

[Portnoy]

seriously.  This US citizen tech and finance savvy newbie is at day 9 attempting to buy $50 of BitCoin.  I think I might be able to by the end of the week.

Here is Canada one can do this in a matter of a few hours
1) Sign up for an account at https://www.cavirtex.com/
2) Walk to the nearest Royal Bank of Canada and deposit $50
3) In 1-3 hours your account at https://www.cavirtex.com/ is credited
4) Purchase Bitcoin and withdraw to wallet

+1

CANADA RULES.
MOVE TO CANADA.

Virtex doesn't have much volume/liquidity [ yet? ] for it to be as useful as one would like in an
exchange. There is also not an easy way of moving CAD and/or USD to and from other exchanges
to take advantage of good arbitrage opportunities. Even when paxum was in the bitcoin business
and even though it was based in Canada it didn't offer much to Canadians. 

I feel like I have to move to America or someone else just to participate, as fully as I would like,
in the Bitcoin game. 

I am more of an investor than a trader and I have been able to take part in some good action there
now and then, so I won't complain too much... but it would be so nice if Grady2000 and Virtex would
make some agreements to start working with bitinstant or the like.   

[Matthew N. Wright]

Except in doing my own research over the past 4 months or so on those cards, there is looking like less and less chance of ever getting them to work standalone unless we can get the proper microchip custom built for hashing. It's a trick thing but it's a better investment than bulky card-shaped USB drives and plastic swipe cards.

There are some smartcards capable of ECC and SHA-256.  Performance likely is bad but you are only doing a few computations per transactions.  Smartcards tend to have very limited flashrom though so space would be "tight".  The fact that Bitcoin uses a "weird" ECC curve doesn't help either.

Totally. Worst of all, you still need an external power supply so these cards need to be swiped/plugged in somewhere to actually do anything. We're a few innovations away from getting something that thin working cheaply, but when it does work, it'd be the ideal transport for Bitcoin.

[hashman]

Reading through this thread just proves that different people/situations prefer/require different payment methods.   

I don't see why the existing credit card architectures couldn't also be used with bitcoin.  I swipe my card, Discover tells the store I am legit and transaction is recorded on Discover's private servers.  I take the shot of whisky put the card back in my velcro pocket and dive back into the surf.  One month later if I didn't complain, Discover posts a TX to the merchant (minus fee) and sends me a bill (plus fee).

             

[Matthew N. Wright]

Wait, I just realized the best way to handle money....minted paper and coins! We should make some kind of... I don't even have the energy to finish this joke.