I just made my first Bitcoin ATM withdrawal... 3BTC from my printer.

[bg002h]

The problem with self printed bills is always going trust. This is where it would be useful the have trusted third party vendors issuing paper currency, with bitcoins to back the value. Hide the private key under a tamper evident hologram just like the coins. You should be able to get these printed for pennies.

There is nothing wrong with having a central issuer of paper money... the problem is when they have an effect on the value of that money. This would not be the case here.

These self printed bills would be great for use where both parties trust the other.

No trust required. Verify the bill before accepting...you aren't trusting the bill to be valid, you are verifying the private key is backed by Bitcoins....

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[tiberiandusk]

For the bills a bill reader like on vending machines could be modified to read the QR code and import the private key to the store's wallet. Once it is verified the bill could be shredded and recycled. For change they could use a heat printer to spit out a QR code with the remaining balance. It would be awesome if you could incorporate your program into the actual Bitcoin client so you just tell it what denomination bills you want and it would print them out. The client would show your wallet balance and the balance of your printed bills which would be updated when someone claims the private key when you spend a bill.

[casascius]

The vending machine could also return change to the bill. Or to another BTC address provided by the customer via the QR scanner.  No printer needed.

[tiberiandusk]

Yeah I didn't even think of that. It would be nice for it to print the remaining balance on it to make it easier to remember what it's actually still worth. I would love to have a 15.8686493 denomination bill. :-P

[dentldir]

How do you verify that a private key is valid and backs a particular address?  Can this be done offline? 

Every time I think I completely understand Bitcoin I hit questions like this.  I know the client will do it for you, but I'd like to hold up my phone and have is say yes or no to a paper note instantly and without a net connection.

[dentldir]

Then of course I'd still need a net connection to check the balance...

But still, is offline private key/address verification possible with out the client?

[rebuilder]

Then of course I'd still need a net connection to check the balance...

But still, is offline private key/address verification possible with out the client?

I'm not sure what you mean. Checking that a private key is valid and matches a given public address? This should be possible, but not very useful, since what you'd really be interested in is whether the address holds funds. And even if it did, being offline you could not transfer the funds to a key only you control.

[dentldir]

I was thinking of what a scammer would do with the ability to print Bitcoin bills for an in person transaction:

1) Print a bill with a corrupted private key and a real address
2) Keep a copy of the real private key
3) Fund the address
4) Show the person you are paying that the Bitcoin address is funded
5) Walk away with your goods and Bitcoins
6) The victim wont know that the private key is useless until they are online and try and import it

Being able to confirm that the private key actually connects to the address gets you some protection against this.

The other scheme is:

1) Print a bill with a good private key and a real address
2) Import the private key to an online wallet
3) Fund the address
4) Show the person you are paying that the Bitcoin address is funded
5) Right after they see its funded, pretend you are checking a text message, but send the money back to yourself with your phone.
6) Walk away with everything

I'm not sure how to get protection against this one.

[casascius]

I was thinking of what a scammer would do with the ability to print Bitcoin bills for an in person transaction:

1) Print a bill with a corrupted private key and a real address
2) Keep a copy of the real private key
3) Fund the address
4) Show the person you are paying that the Bitcoin address is funded
5) Walk away with your goods and Bitcoins
6) The victim wont know that the private key is useless until they are online and try and import it

Being able to confirm that the private key actually connects to the address gets you some protection against this.

The other scheme is:

1) Print a bill with a good private key and a real address
2) Import the private key to an online wallet
3) Fund the address
4) Show the person you are paying that the Bitcoin address is funded
5) Right after they see its funded, pretend you are checking a text message, but send the money back to yourself with your phone.
6) Walk away with everything

I'm not sure how to get protection against this one.

In each case, Step 4 is where things went wrong.  The person receiving the bill should sweep the address immediately and take control of the funds being presented to him in step 4 by sweeping them to another address, so he will know that the funds are there and can't disappear.

[dentldir]

If you corrupt the private key on the bill and keep the real one to yourself, the victim won't know until they import it into the client right?

But if you mathematically prove the private key matches the address, then this scenario isn't an issue.

[casascius]

If you corrupt the private key on the bill and keep the real one to yourself, the victim won't know until they import it into the client right?

But if you mathematically prove the private key matches the address, then this scenario isn't an issue.

The "victim" should be importing it into the client the moment he gets it, and ought to know whether or not it's any good before accepting it.

[SgtSpike]

If you corrupt the private key on the bill and keep the real one to yourself, the victim won't know until they import it into the client right?

But if you mathematically prove the private key matches the address, then this scenario isn't an issue.

That's why it would be incredibly stupid of the victim to not immediately move the funds to a different account.

Casascius coins can work well for person-to-person transactions where there is no possibility to move the funds immediately, but these printed bills are only useful when the receiving entity has the ability to create a transaction with the newly acquired private key at the moment the transaction happens.  For example, in a retail store, the clerk would scan the private key, the system would automatically and immediately create a transaction to move the funds to it's main account, the clerk would wait a few seconds to be sure that the new transaction has been properly broadcasted to the network, and then hand the customer his receipt.

Oh, and as long as we're talking about private keys and change addresses, as long as the customer saw the cashier hand him his receipt without scanning a private key, couldn't a change address just be printed on the receipt?  Then, the next transaction that the customer makes, perhaps at a different store, he can just let them scan the new address where he received his change.

[Stephen Gornick]

The "victim" should be importing it into the client the moment he gets it, and ought to know whether or not it's any good before accepting it.

Not just importing it but spending it (sweep) to another address from the wallet.

Mt. Gox mobile client does this.

A motivated mobile app developer can probably sell a few copies of an app (and/or mobile enabled web-site) that does nothing more than scan the "spend" (private key) of a bitcoin banknote I received, do a second scan for the "load" (on one of my own notes), build a transaction to spend the funds and submit it (e.g., to blockchain's pushtx), and to display the amount + success / failure (i.e., wasn't a double spend.)

This lets me have the value stored on these bitcoin banknotes at all times, with no reliance on an EWallet.  And since the mobile wallet apps and web-based EWallets do not yet have the ability to redeem and sweep, this limited functionality app would at least make these notes functional now, not in some vision of how things could work down the road.

[koin]

Windows users can download my current version of the utility and print Bitcoin notes!

is anyone building something similar for mac or linux users?

[bg002h]

I was thinking of what a scammer would do with the ability to print Bitcoin bills for an in person transaction:

1) Print a bill with a corrupted private key and a real address
2) Keep a copy of the real private key
3) Fund the address
4) Show the person you are paying that the Bitcoin address is funded
5) Walk away with your goods and Bitcoins
6) The victim wont know that the private key is useless until they are online and try and import it

Being able to confirm that the private key actually connects to the address gets you some protection against this.

The other scheme is:

1) Print a bill with a good private key and a real address
2) Import the private key to an online wallet
3) Fund the address
4) Show the person you are paying that the Bitcoin address is funded
5) Right after they see its funded, pretend you are checking a text message, but send the money back to yourself with your phone.
6) Walk away with everything

I'm not sure how to get protection against this one.

The bills aren't meant to circulate. You give the private key away and the new owner transfers the coins immediately or takes your contact info in case they decide to transfer later and it bounces...like a check that has the option of being instantly cashed.

[unclemantis]

I am out of black ink but everything printed good to me! Just looks faded since I have all the colors but black

[SgtSpike]

The "victim" should be importing it into the client the moment he gets it, and ought to know whether or not it's any good before accepting it.

Not just importing it but spending it (sweep) to another address from the wallet.

Mt. Gox mobile client does this.

A motivated mobile app developer can probably sell a few copies of an app (and/or mobile enabled web-site) that does nothing more than scan the "spend" (private key) of a bitcoin banknote I received, do a second scan for the "load" (on one of my own notes), build a transaction to spend the funds and submit it (e.g., to blockchain's pushtx), and to display the amount + success / failure (i.e., wasn't a double spend.)

This lets me have the value stored on these bitcoin banknotes at all times, with no reliance on an EWallet.  And since the mobile wallet apps and web-based EWallets do not yet have the ability to redeem and sweep, this limited functionality app would at least make these notes functional now, not in some vision of how things could work down the road.

Even better, the app should require no user intervention besides scanning the Bitcoin note.  In the initial setup of the app, you give the app a Bitcoin address or series of addresses to sweep funds into.  If you give it a series, it'll use them each only once, unless it runs out, at which point it'll start at the first address again.  It automatically does the sweeping for you as soon as the private key is scanned.  A one-step receipt.

[casascius]

Windows users can download my current version of the utility and print Bitcoin notes!

is anyone building something similar for mac or linux users?

I am hoping these features get added into BitAddress.org so there is a browser-based platform-independent solution.

[Stephen Gornick]

Even better, the app should require no user intervention besides scanning the Bitcoin note.  In the initial setup of the app, you give the app a Bitcoin address or series of addresses to sweep funds into.  

I have a specific use case where the target bitcoin address is not necessarily my own.

Perhaps I pull up to the automated car wash which accepts bitcoin for payment.  It spits out a ticket with a QR code for me to send my payment to.  

Let's assume I have a smartphone, iPad, or whatever, but no bitcoin wallet on it. I don't even need data service or SMS even. [Edited]

So the price of the wash is 0.8 BTC.  In my wallet today, I carry a few $20s.  So similarly, let's say I carry a few 2.0 BTC banknotes in it.

I pull out a 2.0 BTC bitcoin banknote from my pocket, using this app on my smartphone I scan the banknote for the "From:" then scan the QR code from the pay terminal ticket for the "To:".  

The car wash terminal then spits out a receipt and on the receipt is the change in the form of a QR code, a private key, funded with 1.2 BTC.

So then using the app on my smartphone I scan that "Spend" QR code from the receipt as the "From:" and then scan the "Load" QR code from the next 2.0 BTC bitcoin banknote in my wallet as the "To:".

So this app is just a utility, scan the "From:", scan the "To:", spend the funds, done.   There's never any bitcoins stored in a wallet on my mobile or with an EWallet.

[ralree]

Then of course I'd still need a net connection to check the balance...

But still, is offline private key/address verification possible with out the client?

I'm not sure what you mean. Checking that a private key is valid and matches a given public address? This should be possible, but not very useful, since what you'd really be interested in is whether the address holds funds. And even if it did, being offline you could not transfer the funds to a key only you control.

I think the question is "how do I know the private key that I can't see actually unlocks the address on the bill?"  This is exactly the problem with any physical bitcoins you can make at home - the person receiving them has to trust that there's not just a happy face under the hologram instead of a privkey.