The Royal Canadian Mint just announced a new alternative to BitCoin

[guruvan]

hmm. this makes it appear that MintChip just make a way to use regular currency digitally, rather than creating a new currency.

http://developer.mintchipchallenge.com/api/java/ca/mint/mintchip/contract/package-frame.html

The main interface of the API is the IMintChip. It is responsible for supporting the following MintChip functionality:

-Processing credit transactions by loading the Value Messages and incrementing the chip's balance.
-Processing debit transactions by creating the Value Messages and decrementing the chip's balance.
-Reading the transaction log and returning a collection of debit or credit transaction records.
-Providing the chip's status, which consists of the data that may change over the chip's life time: the balance, the maximum allowed debit and credit amounts, current and remaining numbers of the transaction records.
-Providing the chip's properties, which consist of the data that never changes since chip's initialization: the ID, the currency code, the public certificate and the chip version.
-The rest of the interfaces and classes depicted in the above UML diagram are designed to work with the IMintChip interface in support of the above listed functions.

The chip appears to "enhance privacy" by making your private transactions recorded by the RCM. It appears to conduct transactions in standard reserve currencies (EUR,JPY,USD.GBP, etc)

It makes it appear to the parties in the transaction that it's private, while likely allowing the RCM and possibly others to dig up the entire transaction history.

Can U say "big brother money chip?" - I knew that you could.

[acoindr]

Yes, a hard backed Bitcoin alternative could be set up quite easily. But then the government couldn't inflate the currency. What incentive would a government have to do it? The goodness of their heart?

Sure they could. Remember that the government controls and keeps a huge portion of the digital currency in reserve. The reserve could theoretically be larger than the entire amount of real backing currency in existence. And they still control the backing currency. Inflate that and you inflate the digitally overlaid currency too. Or they could separate the backing whenever they wish and sell off their entire reserve of digital currency while refusing to buy any of it back.

Of course they could inflate the currency - they can change the software/protocol any time and require everyone to update.

No they can't really, at least not the way I described it. The underlying network is still bitcoin and there is no way to force people to update their client short of passing a law.

When you say "real backing currency" you are talking about reserved gold or silver, as that's what hard backing means, right? So they would keep a larger amount of digital currency in reserve than the gold/silver they used as backing? I'm pretty sure the public would want to verify they had the amount of precious metal they claimed.

What do you mean inflate the backing currency? You can't inflate gold or silver.

[adamstgBit]

The Challenge

The Royal Canadian MintChip Challenge invites software developers to create innovative digital payment applications using MintChip, a...Winners will receive approximately $50,000 in gold bullion from the Mint as well as promotional exposure....blablabla

Challenge Goals:

    Create software applications and proofs of concept utilizing MintChip
    Highlight potential advantages of the technology and digital currency

i say we make it possible to buy bitcoin with mint chip, and submit that as our proofs of concept utilizing MintChip!

Owned  

the future is going to be filled with "new money systems" i think bitcoin should be prepared to embrace all these systems, and hope we come out as the Gold standard of digital money   

[girlsgonebitcoin]

i say we make it possible to buy bitcoin with mint chip, and submit that as our proofs of concept utilizing MintChip!

Owned   

This ^^ lol

[guruvan]

Yes, a hard backed Bitcoin alternative could be set up quite easily. But then the government couldn't inflate the currency. What incentive would a government have to do it? The goodness of their heart?

Sure they could. Remember that the government controls and keeps a huge portion of the digital currency in reserve. The reserve could theoretically be larger than the entire amount of real backing currency in existence. And they still control the backing currency. Inflate that and you inflate the digitally overlaid currency too. Or they could separate the backing whenever they wish and sell off their entire reserve of digital currency while refusing to buy any of it back.

Of course they could inflate the currency - they can change the software/protocol any time and require everyone to update.

No they can't really, at least not the way I described it. The underlying network is still bitcoin and there is no way to force people to update their client short of passing a law.

When you say "real backing currency" you are talking about reserved gold or silver, as that's what hard backing means, right? So they would keep a larger amount of digital currency in reserve than the gold/silver they used as backing? I'm pretty sure the public would want to verify they had the amount of precious metal they claimed.

What do you mean inflate the backing currency? You can't inflate gold or silver.

I gave some current examples - EUR, GBP, USD, CAD, JPY. They are listed on the diagram in the link I posted.

I specifically doubt that this MintChip will use XAU or XAG (gold and silver) as currencies. They are not on the list.

I did not mean "real" as in "hard commodity" I meant "real" as in "accepted government backed currency" - I meant "real from the perspective of the Royal Canadian Mint - not my own perspective. Sorry for the confusion. Poor word choice.

[BitPay Business Solutions]

i say we make it possible to buy bitcoin with mint chip, and submit that as our proofs of concept utilizing MintChip!

absolutely.  Show how MintChip is limited and it can be converted easily to something that is unlimited. 

[acoindr]

@guruvan - my reply there was actually to Dan The Man

[guruvan]

lol. Sounded like I would have said it too. 

[Yankee (BitInstant)]

Double Spending Issue:

MintChip Value

On receiving the value request message, the Sender's MintChip creates the value message that represents a monetary value in transition. The value message contains the requested monetary amount and can only be consumed by the Receiver's MintChip identified by its unique ID. The value message is digitally signed to protect against any tampering. Once the value message is created by the Sender's MintChip, the MintChip's balance is decreased by the corresponding value. This transaction is irrevocable. The Sender cannot stop or cancel the transaction after the value message has been created. On receiving the value message, the Receiver's MintChip verifies the validity of the message using the digital signature and the Sender's public certificate embedded in the message. It also verifies that the value message is not a duplicate using the challenge value. If the value message is valid, the Receiver's MintChip balance gets incremented by the amount specified in the value message.

http://developer.mintchipchallenge.com/devguide/transactions.html

.....They basically lead you to believe that there is no central authority, but all these rules are made and governed by the Canadian Mint, so they are above the law and can do what they want.

[guruvan]

.....They basically lead you to believe that there is no central authority, but all these rules are made and governed by the Canadian Mint, so they are above the law and can do what they want.

that's sure how i read it.

[rastapool]

Great opportunity for P2P-exchange between Bitcoin and MintChip.
Bye-bye Gox and last Bitcoin weakness.
This is really exciting times.

[bitstarter]

Great opportunity for P2P-exchange between Bitcoin and MintChip.
Bye-bye Gox and last Bitcoin weakness.
This is really exciting times.

Actually its more of direct threat to Mt. Cocks then it is to Bitcoin.

[Phinnaeus Gage]

This is a clear sign that Bitcoin is ahead of it's time and we should be stressing this point (and pointing out the clear difference that MintChip still requires trust in a government).

Just came back in from one of my warehouses and was going to post a similar sentiment. Embrace MintChip by using it as a marketing tool when bringing awareness to Bitcoin. When approaching potential converts, point out the fact that Canada is embracing the Bitcoin model. See what I did there?

~Bruno~

[Dan The Man]

@guruvan - my reply there was actually to Dan The Man

I concur with Guruvan. Remember that with a system built around bitcoin that doesn't use mining, you can only inject coins at the genesis block. Having a method for later injection from a trusted source is asking for hacking. The way the backing would work with newbitcoin wouldn't be that you set aside a backing for all the Newbitcoin you produce. That could leave you with a big pile of shit really fast. Instead, you would produce way more Newbitcoin than you will ever use or need. And you set aside the backing currency when those newbitcoins go into circulation. So you as the central authority, have an open contract to buy and sell newbitcoin at 1:1 for Canadian dollars. Since you start with a monopoly on all of the newbitcoin in existence it is an easy contract to keep.

[Aggro]

Great opportunity for P2P-exchange between Bitcoin and MintChip.
Bye-bye Gox and last Bitcoin weakness.
This is really exciting times.

Nothing exciting nor threatening to bitcoin ... governments printing (sorry... electronically issuing) fiat. NO thank you. I saw how it ends Backed by the Royal Canadian Mint? How is this going to be "Private"? Governments desperate to seize control of at least a portion of the electronic currency revolution.

Bitcoin and the exchanging ecosystem might need to mature, but I'll rather stick with it.

[apetersson]

exiting times! this thingie looks like bitcoins handicapped brother.

on the negative side:
- obviously double spends will be possible
- requires special hardware
- is still fiat money whose value always goes to zero

on the plus side:
 - has gov. backing
 - is tied to the CAD which might be better than USD or EUR in the mid-term future.
 - is already an currency, more clear legal status
 - the whole website seems to be targeted to developers with actual code and is not just slapped-together powerpoint slides

i'm going to study the code samples etc ASAP.

[apetersson]

This all sounds very similar to fairCASH. A patent application was submitted in Europe about a year ago.

yes, it totally reminds me of that. somebody tried to pitch it to Eric Schmidt recently.

[Aggro]

on the plus side:
 - has gov. backing

I guess it is in the eye of the beholder as they say. This to me is a HUGE setback. With paper printed monopoly fiat, at least the government does not have a way to track my activity. I'll stick with that short term, and with bitcoin long term.

[acoindr]

@guruvan - my reply there was actually to Dan The Man

I concur with Guruvan. Remember that with a system built around bitcoin that doesn't use mining, you can only inject coins at the genesis block. Having a method for later injection from a trusted source is asking for hacking. The way the backing would work with newbitcoin wouldn't be that you set aside a backing for all the Newbitcoin you produce. That could leave you with a big pile of shit really fast. Instead, you would produce way more Newbitcoin than you will ever use or need. And you set aside the backing currency when those newbitcoins go into circulation. So you as the central authority, have an open contract to buy and sell newbitcoin at 1:1 for Canadian dollars. Since you start with a monopoly on all of the newbitcoin in existence it is an easy contract to keep.

You keep talking about a "backing currency" but we were originally talking about hard backing. That means gold or silver.

[Dan The Man]

I wasn't talking about gold or silver, and he said he wasn't either. So that leaves only you talking about gold an silver. Consider the context of the Canadian Mint creating a digital currency and it becomes more clear that the backing in this case is Canadian dollars.