Fees are only current problem. And that is the only problem this solves. But it brings many other problems or way worse solutions as BTC already have. Actually it solve another problem, that many people are practically illiterate. Just today i read in newspaper that 30% of people from 18-65 years cant use ATMs for credit cards. They easily pay in a store with credit card since there is a cashier that helps them but they cant do it on their own on ATM.
So solve 2 problems but brings many new.
This BTC would be centrally stored and people that would owned this "bitcoins" (paper wallets) would not be able to empty wallet and thy should trust issuer off this bitcoins.
This BTC could not be divided. You would have let say 0.01 BTCs. Or maybe you could have all range of this wallets to have change back. ( so this would be doable, but would take huge amount of BTC to provide liquidity).
Why dont you try it? Just get some BTC put them on different paper wallet. In different amounts. 1BTC, 0.5BTC, 0.2BTC, 0.1BTC, 0.05BTC, 0.02BTC, 0.01BTC, 0.002BTC, 0.005BTC, 0.001BTC, 0.0005BTC, 0.0002BTC, 0.0001BTC. Somehow secure you dotn get hacked and someone steals all your BTC from all your paper wallets. That would be your biggest fear. Or fear of those that will hold your "bitcoins" ( paper wallets)
My answer:
If tomorrow FIAT bubble would burst people wouldn't swap to crypto currencies. WHY? Because you are paying fees which are too high and you can't buy bread with this everyday.
I think it is better for other things too. Future: You are going home from work, you see you need to refill your gas. Your phone runs out of battery and you are broke in that moment. What would you do?
Anytime you would want to convert your paper notes into digital form, you can sell that paper back to issuer and he can send you same amount on your wallet address. Or you could just sell it to anyone willing to buy.
I will probably try it, but with fever BTC.
***********************************It would be absurd really. Satoshi Nakamoto didn't create bitcoin just to be made exactly like fiat money in the days to come. That would betray the real essence of a digital currency.
And then there was an attempt that foiled. That didn't click well. Bitcoin, as it is, has been praised and appreciated by many for what it is. Why change it, then?
Things will really go complicated if we turn bitcoin into a physical currency. The intensity might cause the entire bitcoin market to crash.
My answer:
As I have seen till now most of BTC community is totally against physical form of BTC and immediately comparing it to FIAT system.
First of all paper money is not the same as FIAT. Banks/government can make money out of thin air either it is in paper form or digital form. No one can make bitcoins! So there is a big difference and learn it!
https://en.wikipedia.org/wiki/Fiat_money I don't think it would betray the real essence of digital coin.
If tomorrow FIAT bubble would burst people wouldn't swap to crypto currencies. WHY? Because you are paying fees which are too high and you can't buy bread with this everyday.
Yes I know it would be complicated, but should we avoid complicated things, can't it become something good although it is complicated?
***********************************No, The future isn't with physical coins IMO but with hardware wallets, which you can use in a better way than even credit cards.
Physical bitcoins are just a novelty, since you don't need a physical coins if you are using bitcoin and it would be a big step back if you consider it better than creditcards and other methods using a physical item but reusable unlike paper money (and physical bitcoins).
My answer:
Yes, hardware wallets can be really useful. But first Bitcoin need to change/improve some things.
***********************************No I don't think so it shall happen, look at your disadvantages points, CENTRALIZED, if we all wanted it why would we use Bitcoins at all. You really haven't understood Bitcoins at all. Yes the fees are a pain no doubt about that, but that doesn't mean we shall opt to make it centralized, that would be suicidal, so for that very reason I have voted no, as I don't like the idea of this whole concept and it's very long post that you have written but there seems no real merit to support your idea, maybe others shall find different views
My answer:
As I mention it few times, yes I know it is centralized. But imagine if country would be doing this would they get any benefit from it? If they would make paper money which would be backed up by Bitcoin? For every 1000 Satoshis there would be private key directly linked with that papper and it would have 1000 Satoshis on it.
+ For everyone, you still know how many centralized system we got? And you trust them without even noticing anything? All products today all more or less centralized, you have to trust the one who is making that product: food, money, water, soap, computers... Now after bitcoin you would trust even 1 institution on whole world?
***********************************No, this is the past and even funny to consider using physical coins with gold covering to pay for something that can be done digitally, if you ever used a new trezor you will see how easy it is to conduct a transaction with it (just scanning a QR), Paying with a physical "coin" is repetition of history, rather than the future.
My answer:
If tomorrow FIAT bubble would burst people wouldn't swap to crypto currencies. WHY? Because you are paying fees which are too high and you can't buy bread with this everyday
***********************************I definitely do not think that physical Bitcoin is the future. First of all, Bitcoin was made to be a pseudo-anonymous currency, if we use physical Bitcoin, then we completely ruin this. Also, real life transactions bring up the risk of theft. To add onto that, it is a lot harder to store your Bitcoin if it is something that is physical. It is the same as cash, you would need something like a bank and once again, that would ruin the point of Bitcoin which is that you can be your own bank. Another problem would be that it would be really hard to use and store small amounts of Bitcoin. I just really don't see physical Bitcoin ever taking off and it is definitely more of a collectible item.
My answer:
If you would prefer you could only use digital form of BTC. You could store big amounts in digital form and use physical form of them only for small purchase.
Storing small amounts? You could get paper note with 10 Satioshis on it.
***********************************OP, nice points.
The thing is, how are you going to trustlessly exchange private keys with physical bitcoins? Sure, there might be manufacture's stickers on a physical coin. Sure, the manufacturer is well known and the risk of getting a "dud" is almost astronomical, but the whole point of using bitcoin is eliminating these sort of things from happening. When you're receiving physical bitcoins from someone, you are not receiving something fungible. Just like paypal funds, the actual value of these funds depend on the user's trustworthiness, its origin and so on.
Unless a way is found to address this trustless issue, it's not going to become a mainstream type of bitcoin transacting method. You could think of high transaction fees as compensation for miners to provide this trustless service, in a sense.
My answer:
As I explained in one of my posts before, I think this is really big security problem (having private key on physical form). So
2. Representative money. ''Representative money is any medium of exchange that represents something of value, but has little or no value of its own. Unlike fiat money (which may or may not have anything of value backing it), to be a genuine representative money, there must always be something valuable supporting the face value represented.'' source:
https://en.wikipedia.org/wiki/Representative_money.
So we make similar money as today FIAT (few security systems which prevent counterfeiting), it would have it's serial number so the institution making this money can track the paper notes and verify their credibility. What would be different is that you would actually have public key of Bitcoin address on it. On this Bitcoin address there would be exact amount of BTC as paper note is representing. Anyone could check this if he has electricity and internet. So actually every time you would buy something with that paper note shop/seller could verify that there is really BTC backing it up.
It doesn't have to be a big part of whole bitcoin system only 1% could be in physical form. And this paper notes (representative money) could be product locally.
