Pretty cool stuff.  I really like the bank card thing I might order one.  Their website could use a little fixing up, looks like something I would make and thats not saying much.

 

Not really - BitBills have physical safeguards against the private key being read without leaving traces (you effectively have to cut the BitBill in half to read the private kay). I would never accept a wallet.dat from someone as payment because he might just as well have kept a copy. In fact, that's exactly the problem Bitcoin solves

Of course with BitBills you'd also have to trust the company creating them. When the value of a BitBill address becomes large enough, the risk of somebody having read it out through non-invasive means along the line might become too high as well - therefore I don't see BitBills as an effective means to let "millions of dollars or coin exchange hands".

I personally wouldn't trust a BitBill worth more than a few hundred USD from what I know about their current physical specifications.

For an enthusiast at my level, this is really an interesting idea.  I want bitcoins but I'm not trying to trade on the exchanges with them.  I don't want to go through the hassle and expense of setting up an account on an exchange.  I don't want a million BTC, just 5 or 10; enough to have in case somebody actually sells a service I can use them with.

A central supplier of BitBills will gain a reputation and using that, I can evaluate risk.  My risk is limited to the time period between sending the cash and verifying the content of the bill.  As soon as I have the coins, I can transfer them to a different wallet and they'd be out of the control of issuing authority.  I'd be willing to pay a commission for that.

The important point here is that Bitbills, and other similar physical manifestations that will surely spring up, allow for even greater anonymity.

When a Bitcoin can change ownership with no transfer in the block chain, then it renders the blockchain ineffective for proving transaction histories. This is a great thing... for it means anonymity can be even greater for those who seek it. Imagine a court trying to prove ownership or transfer of X number of coins- all the defense need do is introduce the idea that transfers can happen beyond that block chain and the whole case falls apart. Bitcoin really does become as anonymous as cash.

i dont think we should get used to trading private keys, its simply not secure.

for example, if i want to sell some pizzia, and i accept bit bills, i have to trust bitbills and the person that gave it to me. if i accept block chain only transactions i trust only the block chain.

another example

if i want to exchange a lot of coins not via the chain, and i trust the other person, they could make their own paper wallet and give it to me. then i only need to trust the person who made the paper wallet.

in addition you do not need to keep the physical wallet. you only need to trust its integrity until you send the coins the key claims to another address.

Note: I am not a lawyer.



The best part is that producing fake bitbills in and of itself is probably not illegal.  Of course, using them to obtain goods and services is probably fraud, but making a bunch of fake bitbills with no keys inside and selling them to someone as a batch of fake bitbills (for that second party to do with as they please) is not against the law (save whatever copyrighted image is on them, which is a civil matter).

The problem with the OP's solution here is one of trust.  It's the same reason why bitbills are doomed to failure.  There's no way for the recipient of a payment to be assured that nobody else has the keys that can be used to transfer the coins.

When you generate your own key and the sender makes a public transaction transferring those coins to you, you can be assured that nobody but you can transfer them.  When someone emails you a wallet.dat or hands you a bitbill, there is no assurance that someone else can't one day spend those coins.  If you want them to be permanently safe, you have to transfer the ownership to a new key, and that involves the blockchain.

I'm not really clear on why everyone's trying to invent coin transfers that avoid the blockchain.  They all involve some sort of trust scheme, and with smartphones approaching free (along with mobile internet connectivity) shortly we will all be speculating idly.

something similar with paper wallets

If I don't send BTC to someone's address then it would be difficult to prove that I did and pester me about my connections with the holder of that address.  This redresses some of the deficiencies of Bitcoin relative to cash.

If a wallet.dat (encrypted) got on to a lot of people's computers somehow, and I got the password to whatever entity managed to provided me with something that I wanted, it would be cumbersome and expensive to trace the relationships between different individuals.

A reason I am sensitive to issues such as these is that I believe that in todays world there is a huge amount of effort expended to track individuals and the relationships between individuals.  In my opinion these efforts either starts out unhealthy or rapidly becomes that way.  The damage that can come out of such databases is, to me, a much greater threat than 'terrorism' most of which is, I believe, pretty phony.