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

[casascius]

Excellent. Not a week ago, it occurred to me merchants aren't the ones who should have QR codes printed - people looking to spend BTC in the real world should print out small-denomination bills, and merchants just need a QR reader.

How is change handled? If I want to use such a bill to pay for something less than the sum held by the private key, is there a way for the merchant to easily return the change to another address I own, not linked to the private key printed on the bill?

yes it's very simple! you have to have BTC banknotes down to 1 Satoshi and give these banknotes back as the change...  

I expect any POS system that read QR codes would offer to read another QR code (bitcoin address only) to determine where the change goes.  Practical options for returning change include:

1. If the merchant has a POS-style printer, they could simply issue your change as a new QR code on receipt paper.

2. You could carry around a little keyfob on your key chain (similar to what BitPay now offers) which returns your change back to somewhere like your computer at home.  That way you don't have to worry about valuable scraps of paper that might fade on you, and you always have an easy way to receive funds anytime.

3. Change could always be sent back to one of the bills you presented for payment, or to another bill you're already carrying.

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[DrFred]

1 and 3 can't work, as 1 would leave control of the private key with the vendor. 3 defeats the purpose of having a denomination on the note.

[ErebusBat]

This has been hashed and rehashed in the original thread.

The point of these are not to do the 'suitcase full of cash' transactions.  Just a few here and there, most likely in mircopayments with the price the way it is now.

[casascius]

1 and 3 can't work, as 1 would leave control of the private key with the vendor. 3 defeats the purpose of having a denomination on the note.

1 is likely to work more for social reasons, not technical reasons.  Sure, the vendor could swipe you for 0.23 BTC, if they want to leave a bad taste in your mouth.  They could also double-charge your VISA today, but by and large they don't.  Now, you do want to watch out for dishonest clerks, because they might have less of a stake and would be more interested in scamming you.  But the same way people know to do due diligence now to protect themselves from hacks of online wallets, so can people learn to avoid getting scammed by clerks (e.g. don't let the clerk snap photos of your change paper, or use method #2 or #3 whenever possible).

3, given the notes are meant to be disposable, simply crossing out the denomination and writing a new one isn't all that outrageous.  Or putting a small tear in the note to signal it has been partially spent.  Not all notes have to be printed pre-denominated.  Notice on my sample notes I simply hand-wrote 1 BTC on them and I don't consider this a terrible flaw.

[nolo200]

1 and 3 can't work, as 1 would leave control of the private key with the vendor. 3 defeats the purpose of having a denomination on the note.

1 is likely to work more for social reasons, not technical reasons.  Sure, the vendor could swipe you for 0.23 BTC, if they want to leave a bad taste in your mouth.  They could also double-charge your VISA today, but by and large they don't.  Now, you do want to watch out for dishonest clerks, because they might have less of a stake and would be more interested in scamming you.  But the same way people know to do due diligence now to protect themselves from hacks of online wallets, so can people learn to avoid getting scammed by clerks (e.g. don't let the clerk snap photos of your change paper, or use method #2 or #3 whenever possible).

3, given the notes are meant to be disposable, simply crossing out the denomination and writing a new one isn't all that outrageous.  Or putting a small tear in the note to signal it has been partially spent.  Not all notes have to be printed pre-denominated.  Notice on my sample notes I simply hand-wrote 1 BTC on them and I don't consider this a terrible flaw.

I personally LOVE this idea casascius!  I want to see BTC accepted in more physical stores/restaurants and I think this is the way to do it.  I like #1.  If you are concerned about the private key, just take your receipt to your table/car and scan it with your phone and move to your own address.

[niko]

These are skimmed much more easily than credit or debit cards - all you need is a camera, not even physical access. There is also the issue of change. Wasted paper, too. Any smartphone can display QR codes on demand, only when needed. Perhaps a nice chimera would be an e-paper note. Sounds too much like the "Bitcoin Card"? It does, but I think Casascius is more than qualified to look into similar solutions and to innovate.

[casascius]

These are skimmed much more easily than credit or debit cards - all you need is a camera, not even physical access. There is also the issue of change. Wasted paper, too. Any smartphone can display QR codes on demand, only when needed. Perhaps a nice chimera would be an e-paper note. Sounds too much like the "Bitcoin Card"? It does, but I think Casascius is more than qualified to look into similar solutions and to innovate.

They are meant to be disposable.  You would not "loan" these to somebody the same way you would loan a Federal Reserve note.  You would print them for your own use and keep them in your own physical wallet until you're ready to spend them.

Any smartphone can display QR codes on demand, but that demand takes 30-60 seconds to issue, assuming you have good wireless signal, and makes you unpopular if you're at the head of the lunch line and there's two dozen people behind you.  With the cash, you can hand it over, and *beep* be done, and your change goes back to your bill, or your BitPay keyfob, or is handed to you on receipt paper.  It's even faster than VISA.  (Assuming the merchant has the appropriate POS system... but believe me, this is coming!)

[SgtSpike]

These are skimmed much more easily than credit or debit cards - all you need is a camera, not even physical access. There is also the issue of change. Wasted paper, too. Any smartphone can display QR codes on demand, only when needed. Perhaps a nice chimera would be an e-paper note. Sounds too much like the "Bitcoin Card"? It does, but I think Casascius is more than qualified to look into similar solutions and to innovate.

If you have a smartphone, why go through the trouble of displaying a private key to begin with, instead of simply creating a Bitcoin transaction yourself and sending the funds to the vendor's address?

I like the paper throwaway bills (and these aren't the first ones we've seen).  They would work well for the purpose they are made for.  I think it was mentioned before in a different thread that the likelihood of a scammer being able to create a transaction to skim the funds even just 10 seconds after the vendor created their transaction would be less than 1%, assuming the scammer didn't hold a significant amount of hashing power.  Remember that the standard client will reject second transactions if a first has already been broadcast claiming the funds.  And if the scammer DID hold a significant amount of hashing power, what would they be doing with trying to scam 1 BTC here and there in in-person transactions?

[niko]

I'm starting to warm up to this. I apologize if kicking at an open door, but private key can in principle be encrypted, and POS infrastructure could be decrypting it, right? The system could be assymetric and involve public key and denomination as seed/salt...? (Haven't thought this through at all)

[mobile4ever]

That's awesome! Good for you. Does it work with android, blackberry, iPhone and the rest?

[casascius]

I'm starting to warm up to this. I apologize if kicking at an open door, but private key can in principle be encrypted, and POS infrastructure could be decrypting it, right? The system could be assymetric and involve public key and denomination as seed/salt...? (Haven't thought this through at all)

It could be, but for this purpose it's not encrypted at all.

I actually did make a proposal on the Wiki as to a key/QR code format that is protected with a password.  That could be done - in which case you'd hand over the cash and say "the password to my cash is foofoo".

I am not sure it would be very practical, because the purpose of printing the cash is to save transaction time, and if the password is long, you waste any time you saved as the cashier types it, and if the password is short, someone who skims the code could crack it, rendering the protection useless.  The most practical remedy may be low-tech: cover the spend code with a small post-it note.

Password-protected cash also increases the training burden on staff who would be employed to accept it, which makes the deal a little more raw for merchants.  The more the bills can function like retail gift cards from the perspective of the clerk, the less often you'll run into clerks who have no clue how to accept them.

[Dansker]

Definetely the kind of thing you need if you go drinking or to a casino paying with bitcoins.

This way you can bring the amount of money you are willing to risk/spend, and not worry about everything else.

[Gyrsur]

I love the idea of BTC banknotes since I saw the photo from Casascius! but I think we have to make a difference between two worlds. the geek world and the ordinary world. bitcoin until now is a currency for geeks. with this BTC banknotes it can become a currency for ordinary people too. let thinking about cryptography at the geeks and give the rest BTC banknotes... in detail it could be mean this: the private key should be inside of the BTC banknote so if you want to use the amount in the common old way you have to destroy the BTC banknote and then you can use the value as before. but until this you have to use BTC in a common way of a currency.

BTW the paper should be a high quality paper like a foil or something like this...

BTC banknotes should be available down to 1 bitcent at the moment it means you can divide a dollar down to 10 cents

the other question is: is Bitcoin ready for the second storm? if this idea will light up Bitcoin will get much more attention as one year ago... from governments, hackers, all the rest...

only my humble opinion, my intention is to put Bitcoin forward in the way of coming to solutions via swarm intelligence

 

[casascius]

the private key should be inside of the BTC banknote so if you want to use the amount in the common old way you have to destroy the BTC banknote and then you can use the value as before. but until this you have to use BTC in a common way of a currency.

That's exactly how Casascius Coins work, but then you have to pay extra for the coins plus shipping and wait for them to arrive, which is a disincentive to spending them like cash.  Most people buying Casascius Coins are collecting them or using them to promote Bitcoin.

Printing your own bills eliminates the premium cost, the shipping cost, and the shipping wait, at the expense of not having the code covered up.  For applications where a covered code isn't necessary, it hits a sweet spot.

Printing the bills and cutting them out takes time and costs money in supplies, but is not bad if you compare it to the time it takes to drive to an ATM and the cost of an ATM fee.

BTW the paper should be a high quality paper like a foil or something like this...

Since the goal is to release the program to the world for free, open-source, you'll be able to print on anything you can shove into the printer.

BTC banknotes should be available down to 1 bitcent at the moment it means you can divide a dollar down to 10 cents

Likewise when you're printing them yourself - you can have one for 23 bitcents if you want.

[Gyrsur]

BTC banknotes should be available down to 1 bitcent at the moment it means you can divide a dollar down to 10 cents

Likewise when you're printing them yourself - you can have one for 23 bitcents if you want.

yeah, if i want to pay my beer in a pub with bitcoins then i have to take a 1BTC banknote with me and will get back a 50 bitcent and a 20 bitcent banknote. the rest is tip...

[giszmo]

If you are concerned about the private key, just take your receipt to your table/car and scan it with your phone and move to your own address.

So the waiter has plausible deniability if he is faster than you. Anybody in the room could have taken a picture of the receipt while falling out of the printer, spied on the electromagnetic waves the printer produced etc.

(Yes I'm one of those skeptics who think it is a bad idea to print private keys in the first place. Bitcoin are digital money. Printing them is a nice gadget but of no practical relevance in any future I can imagine.)

[Gyrsur]

If you are concerned about the private key, just take your receipt to your table/car and scan it with your phone and move to your own address.

So the waiter has plausible deniability if he is faster than you. Anybody in the room could have taken a picture of the receipt while falling out of the printer, spied on the electromagnetic waves the printer produced etc.

(Yes I'm one of those skeptics who think it is a bad idea to print private keys in the first place. Bitcoin are digital money. Printing them is a nice gadget but of no practical relevance in any future I can imagine.)

i disagree, if you want to have a critical mass using bitcoin you should try to think as the critical mass. humans want to have something in there hands and something what is easy to use. if i got 4 beers in a pub maybe i'm not able to use my mobile anymore...

[unclemantis]

I'm starting to warm up to this. I apologize if kicking at an open door, but private key can in principle be encrypted, and POS infrastructure could be decrypting it, right? The system could be assymetric and involve public key and denomination as seed/salt...? (Haven't thought this through at all)

It could be, but for this purpose it's not encrypted at all.

I actually did make a proposal on the Wiki as to a key/QR code format that is protected with a password.  That could be done - in which case you'd hand over the cash and say "the password to my cash is foofoo".

I am not sure it would be very practical, because the purpose of printing the cash is to save transaction time, and if the password is long, you waste any time you saved as the cashier types it, and if the password is short, someone who skims the code could crack it, rendering the protection useless.  The most practical remedy may be low-tech: cover the spend code with a small post-it note.

Password-protected cash also increases the training burden on staff who would be employed to accept it, which makes the deal a little more raw for merchants.  The more the bills can function like retail gift cards from the perspective of the clerk, the less often you'll run into clerks who have no clue how to accept them.

+1

[Kupsi]

BTC banknotes should be available down to 1 bitcent at the moment it means you can divide a dollar down to 10 cents

Likewise when you're printing them yourself - you can have one for 23 bitcents if you want.

yeah, if i want to pay my beer in a pub with bitcoins then i have to take a 1BTC banknote with me and will get back a 50 bitcent and a 20 bitcent banknote. the rest is tip...

If you go to your regular pub, you would take many 30 bitcent banknotes with you

[casascius]

So the waiter has plausible deniability if he is faster than you. Anybody in the room could have taken a picture of the receipt while falling out of the printer, spied on the electromagnetic waves the printer produced etc.

(Yes I'm one of those skeptics who think it is a bad idea to print private keys in the first place. Bitcoin are digital money. Printing them is a nice gadget but of no practical relevance in any future I can imagine.)

In a BTC-welcoming restaurant scenario, you are far more likely to receive your change as multiple BTC bills pre-printed by the restaurant in a small denomination conducive to leaving tips, with scratchoffs protecting the private key.  Your restaurant receipt will list the firstbits of the change bills that were activated for you as proof that the bills were funded by the waiter before being brought to you.