What do you think about physical hardware coins denominated in Bitcoin?
They can exist in 2 forms:
- Trusted paper money
- Untrusted tamperproof seed money
Trusted paper money is easy to understand. It works exactly like nowadays coins and bills currency and users have to trust issuing bank that the real Bitcoin reserves actually do exist or at least sufficient fractional reserves do not get bankrunned.
Untrusted Tamperproof Seed Money would be physical hardware that contain 12 words inside it that is not visible from the outside. It is not exactly trustless since users still need to trust
- that the original making of the process did not compromise the wallet and its UTXOs
- that the tamperproof system did not fail
I did something in university about tamperproof embedded systems in university a few years ago - they exist in closed source hardware like cars/robots/iot etc as you can imagine. They exist in 3 forms:
- Tamper evident: If the coin has be compromised one can see that it has been opened
- Tamper proof: It is physically hard to open it -imagine massive stainless steel coating/shell or something here
- Tamper responsive: The device reacts to being tampered. In our case maybe an electric system that destroys the key if somebody else besides the issuing bank opens it.
None of these forms money have been satisfyingly achieved yet 😔🤟🏻
But if they have - would you use one of them? At least small quantities for every day small transactions as an alternative L2? Do you think it WILL happen even if you hate the idea?
Check out offline.cash/
Appears to be custodial unless the device stores a private key, thus defeating the purpose of bitcoin.
It does. Check the docs.
I don't see any docs on that page, but there was an FAQ at the very bottom of the page describing a useless multisig setup:
What they are describing is basically a personal wallet with extra steps. You cannot use these notes as money because you have no way to prove that you don't remember the seed after you give the note to them.
In order to make bitcoin into physical money, you have to transparently make a computer chip the custodian of the bitcoin (such that the current owner can use it to sign transactions, but not the previous owner). See my comment here: #64833
There is also the example of the casascius' coin setup: a trusted party funds an address imprinted on the inside of the coin and revealing the private key destroys the coin: https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
If we agree that someone would use Fedimint then it is also reasonable to assume that some Fedimints would mint physical coins and/or notes. The problem, as always, is the government.
That's a good comparison. Both are in the middle of the trust<->trustless spectrum. Both with technologies that reduce needed trust. And both with rugpull-potential that is against the original spirit of Bitcoin.
I think it's possible if you have a chip (probably encased in some coin-like packaging with USB terminals) that:
I think it is probably the most feasible L2, because it removes the need for network consensus entirely, and it is as easy to use as cash. It is basically a highly verifiable form of cash. It has decent privacy characteristics.
This would work with monero too, you would just want to publish the view key on the face of the "coin"
Trusted paper money denominated in Bitcoin is inevitable. Especially with fractional reserve banking. Humans are dumb, the possible profits from it a low hanging fruit. Capitalism will exploit this like water finds its way downhill.
worthless I prefer just 12 words in my head, or just use opendimes.
Then step 2 in the float chart:
😉
Why would somebody will spend money, time and resources, when can be used just 12 words, for free, instant accessible?
Your idea is not feasible and almost nobody will use it.