I think they have value for collectors and for playing poker with friends.
I think that at this moment, bitcoins have potential for eCommerce but not much penetration on real shops and retailers.
I don't see people going Scrooge McDuck crazy and piling these coins in huge vaults but still, the inception of physical coins and bills make bitcoin more flexible. For example, they can be traded when there is no connection available.
Maybe in the future you will be climbing the Himalayas and a little monk will be there selling hot tea and enlightenment but he only accepts bitcoins since Buddhists are keen on the "money is an illusion" thing. Unfortunately, your AT&T iPhone 18S will have no coverage and you will be thankful for your bitcoin coins... (and, yes, this is a joke).
It's an interesting souvenir and definitely nice to look at, but once you spend your BTC online, the intrinsic value (the BTC) and the store of value (the coin) become separated, and the coin becomes worthless. In fact, I don't even know how money would get exchanged... if you gave someone the coin, it still doesn't confer ownership. It's essentially an anonymous IOU, meaning it has no value.
> if you gave someone the coin, it still doesn't confer ownership
It does because the coin has the private key. Maybe it's better to think of it as a key to a (public) safe. The key represents the right to open this safe. So, by giving you the key, I give you the ownership to the content of the safe. (However, if I have another copy of the key it get's problematic.)
> It's essentially an anonymous IOU
Which is exactly the same as normal cash. The only difference is that you can destroy them without really loosing the money. So you have a worthless piece of metal. You can do the same with your normals coins (eg. melt them down), but then the worth is just gone ;)
I think this is why you don't load them yourself. Essentially it is this company backing the coin, not you. When they send you a loaded coin it probably won't be loaded with the coin you bought it with.
Another interesting property is that unlike a bank they cannot issue more money than they have assets, as each coin is linked to a unique private key. (assumes they are not just a one-time scam)
I think you mean make sure it has any value at all. When anyone buys a coin from this organization. The first thing they should do is rip off the hologram and make sure the code works. As far as I can tell, casascius provides no warranty, guarantee, insurance, or backing of any kind.
The main problem is that you have to trust the person who minted the coin not to extract the value of the coin while it is in circulation. Eventually it should leave circulation, be converted back to virtual, and transferred to a safe address that minter doesn't have access to.
So, the thing that it is printed on should be really cheap, like card stock or just paper. It shouldn't be considered currency, but more like a check. People accept a check on the assumption it won't bounce because they know the person who signed the check to them.
When you get one, it should be off the person who wrote the check, and you should cash it immediately (transfer it to an address you trust).
I could see keeping a few business cards in my real wallet with public and private keys on them with empty addresses. I can load them on demand from my cell phone, and write the amount and sign them when I hand them to someone. This way I can give them money without them needing a digital device handy. I could even do this in advance in a few denominations for completely offline access, but it would still require the trust of two individuals on the same level as writing them a check.
In this case, obscuring the private key would be pointless since both people would have access to it.
Here is a good resource for printing address:
https://www.bitaddress.org
It has QR codes on it, so you can use the Android app to scan the pub key and transfer money to it. The addresses are generated client side with your browser, so they should be safe from snooping.
What's the point? That just defeats the whole philosophy of anonymous cryptocurrency and... 25 physical BTC = 29.50BTC!! You loose money if you buy physical coins...
That's why gold and silver isn't used for coins anymore (except for special limited editions). Nowadays fiat money coins face value is much more than the material of which the coins itself are made.
It'd need some encryption+verification like a QR code that can easily be scanned with a phone, which would open up a website, contain an encrypted key and then decrypt and run block explorer to verify without revealing the key.
This just feels wrong. Physical coins provide peer-to-peer non-anonymous transactions instead of distributed anonymous ones, that is what Bitcoin is about.
this seems to open a whole new door for double-spending and other forms of counterfeiting. nothing seems to stop me from buying a physical coin, then transferring the digital coin to my mtgox account but still spending the physical "coin".
to guard against this, you need to check block explorer for every coin that you were going to spend with a physical merchant, I think?
Even if you trust the coin issuer 100% to not keep a copy of the private key, these sorts of schemes only work until anyone anywhere counterfeits the first BitBill or Casascius coin.
At that point, it becomes necessary that all of the other physical tokens in the world must then be immediately destroyed on redemption and validated as a normal network spend... Which defeats the purpose of these transferable tokens to begin with.
The tamper seal doesn't help. You might as well just print out your own private keys as QR codes, the person accepting them will need Internet access to verify+transfer them, just as now with these "tamper-evident" systems.
There are ways to build something like this to:
1) Audit the production process so keys can't be stored, if you trust the code (and the hardware)
2) Stuff coming from the production process goes into tamper-responding smartcards which can prove they are real devices and untampered (preventing counterfeiting and double spending)
At that point, as long as you trust the cryptography and tamper-resistance (of mint hardware and coin hardware), you can trust that a coin someone hands you is valid.
It's probably about $5-10 to make a "coin" with these properties, and $200-300k to make a mint. There are a lot of hybrid online/offline token based currencies which would meet the requirements, but assuming the right hardware, you can build the whole thing as a wrapper around arbitrary data.
What do you mean by counterfeiting? Do you mean selling coins online that don't have real codes? Because you certainly couldn't pay for goods with a counterfeit coin, since they're instantly verifiable.
I could buy one of these coins, then make a thousand coins with the public key of that one coin on it, with nothing inside the tamper-seal.
The moment I start circulating them, this now means that everyone who wants to accept these coins needs to destroy them, reveal the private key, and transfer those coins.
That defeats the purpose of the whole tamper-evident system - the idea behind it is so that they DON'T need to be redeemed.
You don't. Even better, this would be great as a scam, if you simply count on it being handed a couple of times from person to person before someone decides to check the code online. Who are you going to complain to if it turns out not to work at redemption time?
Would you accept one of these without verifying that it has indeed not been redeemed. How do you know that your coin is the only coin with that particular code in it without redeeming it?
Not exactly, because of the way public addresses and private keys work.
Anyone can check that the address 1xGibi... holds the declared amount of bitcoins. Only someone with the knowledge of private key can transfer them to other address. So you can verify the address and physical integrity of coins before accepting them.
You may think of this as of passing around a signed check.
I wish he'd invested the time/effort into producing something useful or cool that I could buy with bitcoins instead of these. I like the checkout system - just address and bitcoin payment.
Does a pile of eight bitcoins equal a bytecoin? If so, then a single bitcoin would indeed be "a bit", because: "In the U.S., the "bit" as a designation for money dates from the colonial period, when a common unit of currency was the Spanish milled dollar worth 8 Spanish reales. As a way of making change, these dollars were cut into eight pie-slice shaped pieces which were called "bits". (For this reason, the whole coin was known as a "piece of eight".) Each eighth-dollar bit was then worth 12.5 cents, "two bits" was a quarter of a dollar (25 cents), "four bits" was a half-dollar (50 cents) and "six bits" was 75 cents."
