Mint Chip Technical Details

[Sukrim]

First thing I'd do would be to give one of these µSD cards to my university for dissection... we have quite good crypto geeks there!

All in all though I am surprised how nice and well handled MintChip runs so far - developers post on their forums, no NDA for developers, some fun included and they didn't go berserk on the multiple Bitcoin posts that inevitably popped up on their site. Just sad that they don't expose all their backend + workings right away (and probably never will...) and they didn't release their API etc. as open source, but that might be a bit much asked from a mint.

[1713879987]

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[1713879987]

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[Phinnaeus Gage]

http://www.winnipegfreepress.com/business/new-coins-causing-headaches-for-vendors-147422815.html

The idea is the MintChip could be used for micro-transactions -- such as online purchases of songs or news articles -- with no personal data required to complete the transaction.

The mint launched a program earlier this month inviting software developers to create innovative digital-payment applications for the MintChip technology, with winners to receive $50,000 in gold.

There was so much interest in the program the mint has already had to stop accepting registration.

Now that (bold) is interesting!

http://mintchipchallenge.com/

Due to a very high level of interest, we are no longer accepting registrations for the MintChip Challenge. If you registered already, we will contact you shortly!

~Bruno~

[cbeast]

http://www.winnipegfreepress.com/business/new-coins-causing-headaches-for-vendors-147422815.html

The idea is the MintChip could be used for micro-transactions -- such as online purchases of songs or news articles -- with no personal data required to complete the transaction.

The mint launched a program earlier this month inviting software developers to create innovative digital-payment applications for the MintChip technology, with winners to receive $50,000 in gold.

There was so much interest in the program the mint has already had to stop accepting registration.

Now that (bold) is interesting!

~Bruno~

Sounds like a whole lot of new Bitcoin exchanges are being developed. 

[Phinnaeus Gage]

http://www.winnipegfreepress.com/business/new-coins-causing-headaches-for-vendors-147422815.html

The idea is the MintChip could be used for micro-transactions -- such as online purchases of songs or news articles -- with no personal data required to complete the transaction.

The mint launched a program earlier this month inviting software developers to create innovative digital-payment applications for the MintChip technology, with winners to receive $50,000 in gold.

There was so much interest in the program the mint has already had to stop accepting registration.

Now that (bold) is interesting!

~Bruno~

Sounds like a whole lot of new Bitcoin exchanges are being developed. 

I wonder when we'll see this:

Due to the very high level of interest in Bitcoin, bitcoiners will no longer be able to submit ideas on its main forum outlining ways to make it more viable.

~Bruno~

[DeathAndTaxes]

High level of interest IIRC is > 500 registrations.  They only had 500 developer kits which were offered at no cost. 

[DeathAndTaxes]

Here's one technical detail I haven't been able to find: will the MintChip carry legal tender?

It seems that strictly speaking, the MintChips will store arbitrary tokens that are merely redeemable for Canadian dollars, as the Royal Canadian Mint "backing" seems to promise. Even if someone manages to hack the private key/s inside a chip and create counterfeit tokens, it's only CAD debasement if the RCM honours the counterfeits by printing new Canadian dollars.

Here's another: what happens to the Canadian dollars that the RCM or "trusted brokers" obtain in exchange for recharging MintChips with tokens? Do the dollars get deleted from their hard drives?

The legal tender issue is an interesting one but I doubt it will have any practical impact.  Legal tender doesn't obligate someone from accepting currency in any specific form (for example the bank isn't required to accept a dump truck of pennies to pay off your mortgage).

As far as counterfeiting.  If the royal mint doesn't offer 1:1 exchanges even with inflation due to counterfeiting then I imagine the entire system fails.  Who would choose a chip which may lose 10% to 50% of its value due to no fault of their own when they can just keep using "cash" instead.

As far as what happens to the dollars my guess is that the brokers will be contractually obligated to hold in reserve 1 CAD for every 1 mintchip CAD token issued.   Similar laws exist for things like casino chips.  Casino must have $1 dollar in reserve for every $1 in chips held by customers or on the floor. Failure to meet the 1:1 ratio at all times can result in them losing their license.

For largest brokers if the system ever become widespread that means a significant amount of revenue from float.

[phillipsjk]

Here's another: what happens to the Canadian dollars that the RCM or "trusted brokers" obtain in exchange for recharging MintChips with tokens? Do the dollars get deleted from their hard drives?

I suspect that individual MintChips can be revoked (distinct from reversible). That would explain the 500 transaction limit (and record) before reset.

If I am correct, the $100 MicroSD cards in the dev kit will be worth $0 at the end of the contest period. It also makes counterfeit chips a very big problem. With the private key, you can transmit unlimited funds with no transaction limits. At least until 2 people get their mintchip reset (after 250 transactions on average) and the double spending is noticed. I assume businesses would be resetting their chips daily if not hourly.


Edit: "Those who do not understand Unix are condemned to reinvent it, poorly.
        -- Henry Spencer"

Remove Unix, insert Bitcoin

[Foxpup]

The legal tender issue is an interesting one but I doubt it will have any practical impact.  Legal tender doesn't obligate someone from accepting currency in any specific form (for example the bank isn't required to accept a dump truck of pennies to pay off your mortgage).

Actually, you picked exactly the wrong example of why legal tender laws don't matter. People are legally obligated to accept legal tender (even in ridiculous forms, such as a dump truck full of pennies) for the payment of debts (eg, taxes, mortgages, bills, etc) (however, non-legal tender may still be used to pay off debts if both parties agree to it). The reason for legal tender laws is that if someone refused to accept payment for a debt and the case went to court, the judge would be extremely annoyed to learn that the debtor actually is willing and able to pay his debt, and that his attempts to do so were refused for arbitrary reasons.

However, legal tender laws do not apply when the transaction is not a payment of a debt (eg, retail purchases, bank deposits, etc), so people are not obligated to accept legal tender in these situations (which includes most of the transactions that MintChip will be used for).

[apetersson]

for example, if you are in a restaurant and have already consumed your meal, your are in debt and by legal tender laws he is required to accept it.

[DeathAndTaxes]

Actually, you picked exactly the wrong example of why legal tender laws don't matter. People are legally obligated to accept legal tender (even in ridiculous forms, such as a dump truck full of pennies) for the payment of debts (eg, taxes, mortgages, bills, etc) (however, non-legal tender may still be used to pay off debts if both parties agree to it).

That is a mismoner.  No entity is required to accept legal tender in all forms (like for example a dump truck, or even any cash) they are just obligated to accept payment in some form of legal tender.  

As an example, my mortgage is held by a non bank entity.  They have no offices/locations open to the public and federal law prohibits mailing cash (in any form).  My old method of satisfying the debt is by check draft, money order, cashiers check, ACH, or bank wire.  That doesn't violate any legal tender statutes. Now if the "bank" demand payment in gold or chickens it would.  However them placing restrictions of what forms of payment they will accept are not unlawful.

The purpose of legal tender laws is to ensure that a debtor holding legal tender has SOME mechanism to repay that debt not to obligate creditors to asinine restrictions (like requiring they accept a dump truck of pennies).

Now the legal tender laws in Canada may differ.

From the source (US Treasury)

Question:
I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

Answer:
The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

I picked that example on purpose.

[Dan The Man]

The legal tender issue is an interesting one but I doubt it will have any practical impact.  Legal tender doesn't obligate someone from accepting currency in any specific form (for example the bank isn't required to accept a dump truck of pennies to pay off your mortgage).

Actually, you picked exactly the wrong example of why legal tender laws don't matter. People are legally obligated to accept legal tender (even in ridiculous forms, such as a dump truck full of pennies) for the payment of debts (eg, taxes, mortgages, bills, etc) (however, non-legal tender may still be used to pay off debts if both parties agree to it). The reason for legal tender laws is that if someone refused to accept payment for a debt and the case went to court, the judge would be extremely annoyed to learn that the debtor actually is willing and able to pay his debt, and that his attempts to do so were refused for arbitrary reasons.

However, legal tender laws do not apply when the transaction is not a payment of a debt (eg, retail purchases, bank deposits, etc), so people are not obligated to accept legal tender in these situations (which includes most of the transactions that MintChip will be used for).

I believe that Canada has a limit of 50 pennies for any single cash transaction.

[adamstgBit]

The legal tender issue is an interesting one but I doubt it will have any practical impact.  Legal tender doesn't obligate someone from accepting currency in any specific form (for example the bank isn't required to accept a dump truck of pennies to pay off your mortgage).

Actually, you picked exactly the wrong example of why legal tender laws don't matter. People are legally obligated to accept legal tender (even in ridiculous forms, such as a dump truck full of pennies) for the payment of debts (eg, taxes, mortgages, bills, etc) (however, non-legal tender may still be used to pay off debts if both parties agree to it). The reason for legal tender laws is that if someone refused to accept payment for a debt and the case went to court, the judge would be extremely annoyed to learn that the debtor actually is willing and able to pay his debt, and that his attempts to do so were refused for arbitrary reasons.

However, legal tender laws do not apply when the transaction is not a payment of a debt (eg, retail purchases, bank deposits, etc), so people are not obligated to accept legal tender in these situations (which includes most of the transactions that MintChip will be used for).

I believe that Canada has a limit of 50 pennies for any single cash transaction.

Canada no longer uses pennies

but i'm still getting some back in my change, i think i might start paying cash to get my penny collection bigger lol!