Yes.  Exactly.  We care VERY much that Bitcoin become accepted, understood, and used... by the average Joe.   ....AS FAST AS POSSIBLE.

In the end, its common usage by everyone may be the only thing that saves it... from big governments and the big banks that own them.

http://www.documentsecurity.com/sp_documents.php

Here's what I'm thinking..... for a paper currency...
Printed on it could be.... what?
Besides a Bitcoin denomination --- like BTC 1, BTC 5, BTC 10, BTC 20, BTC 100.
A verifiable public key & owner.... so that anyone could verify that this key was still owned by this owner.... as long as this paper was in circulation ...?

To help prevent counterfeiting, there could be a predetermined expiration date... by which time it must be redeemed...?  At that time, old bills could be replaced with the
newest bills, with improved anti-counterfeiting features.

Obviously, real Bitcoin is superior to anything paper...  However ...

Paper Bitcoin is just a stepping stone for ordinary people to play with, handle, look at, and even shop with... on a small scale.  

I still like the idea of using invisible ink notes. The issuer would have a public key and private key on every note. The public key would be visible but the private key would be invisible. You'd have to void the note to reveal the private key.

I'd prefer that the notes have expiration dates. It would help to prevent counterfeiting.

I'd trust the issuer most if it was a non-profit mutual bank or something similar.

Isn't minting a physical currency what got liberty gold or whatever in trouble in the first place?


I'm inclined to agree, but with some caveats. Obviously, the more people using BTC the better - but I don't think that should come at the expense of jumping through hoops doing things like printing notes just to make them more comfortable with it (particularly if, like my assumption above, it opens the system up to action by governments).

The fractional reserve idea, the central-issuer idea, isn't that what people interested in BTC are trying to move away from?

moa, I followed your link and read, but I don't see the connection to what we're talking about. The real bill doctrine seems to be that, if a note is in principle payable on demand, then its issuer can issue as many notes as it wants as long as those notes are balanced by assets accrued.

An example would be if Big Bank Inc. promised to redeem its notes in bitcoin, and perhaps even kept some bitcoins on hand for redemption purposes, but also disbursed loans in note form without holding enough bitcoins to cover them. The bank would then book the loan itself as an asset. In case of a run, the bank would either call in accounts early, liquidate assets, or borrow against its accounts receivable.

This system works, sort of, but becomes unstable when the note/reserve ratio grows too high. The danger is simply that assets can be lost, particularly assets that are only accrued and not yet received. In the above example, some debtors will default and their loans will be written off, reducing the bank's assets while leaving its liabilities untouched. Charging interest on loans provides some protection against this, but given enough time the bank is quite likely to have a long run of bad luck and become insolvent.

Anyway, that's not the sort of thing I was planning. I'm interested in a 100% reserve kept safe by multiple offsite backups and strong encryption---the most mucking about I'd allow for is a sort of very short-term bond system wherein the bank might issue notes payable at the end of the month, and secure the bitcoins before then, in the interest of fixing very short-term liquidity problems. As long as this was stated up front on the notes I don't think it would be a serious problem.

As for expiration dates, you people are far more accepting of the idea than I would have guessed. Of course they'd have to be both prominently written and easy to predict---perhaps notes could be released in batches that expire at the end of a calendar year, with "VOID AFTER DECEMBER 2013" written in large print on the reverse. The revenue from unredeemed notes would easily make up the printing costs--if we assume each note costs 0.1 BTC to print, a single unredeemed 50 BTC note would cover the cost of 500 notes printed. Given the amount of cash destroyed in every year, not to mention the number of people who can't manage to mail in a $100 rebate form, issuing cash could be very profitable indeed.

I think you will discover the difference between commodities and currency.  BTC could crash at any time.  Silver will always be silver.  I think the 1 oz round is the official currency of the silver currency.   From that 1 oz you can convert to BTC at any time.  So you could make a 1 oz round with the bitcoin symbol, but instead of calling it 1 BTC, or 40 BTC, you call it 1 troy ounce.  Thus, there are no links and you could still trade the silver as silver.  However, you could make your own symbol if you like.

I say don't put 40 BTC on it, put 1 Troy Oz on it.  Silver should be its own currency in itself, with troy oz being the unit of exchange.   There never would have been the great depression if everyone used physical silver instead of using silver backed notes.  So you have 2 currencies, not competing currencies, operating at the same time.

I somehow don't expect that a bitcoin-backed paper currency (even if 100% backed) will ever succeed.

However, I'll give it a go.  Let's start with one-time paper currency.  i.e. it is issued by some "bank" and, at it's first use, the paper is destroyed and the value it represents is received by the seller of goods.

First, we'll need some widespread smart-phone software which can recognise those two-dimensional barcodes (what are they called - QR codes, right?).  Next we'll need some double-layered paper, with the top layer being transparent.  Now, you send some bitcoins to a bitcoin address.  The private key, as a QR code, is printed on the lower layer of paper.  The address, also a QR code  (but a special one), is printed on the upper layer, directly on top of the lower QR code, but here's the cute bit: you're actually seeing a mix of both QR codes together.  So what you need, is that both QR codes, seen together, represent the public bitcoin address, but you can't tell which part of the pattern belongs to the which QR code.  You scan this with your smartphone, your smartphone checks out the bitcoin block explorer and verifies the value at that address.  You accept the paper as payment, tear off the top layer, scan in the private key and immediately transfer the bitcoins to your address.

Of course, as long as people are willing to trust that the issuing bank has either deleted all the private keys in these paper notes, or will not sneakily transfer the bitcoins out, then there's no actual need to tear off the top layer, and so, the note can be re-used.

Any good?

If the serial number on the paper is a public key then any client can verify that real bitcoins back up the paper. The key would have to own exactly the stated amount on the paper.

Any holder of paper can go back to the issuing institution and "transfer" the value to a new piece of paper with a new key on it. The holder can verify that the transaction went through on the real bitcoin side. This action would render any "duplicate" pieces of paper useless because if they now check their keys there is no value behind them. It would take a real juggling act for the issuing institution to keep any fraud from showing.

It wouldn't take too many people regularly checking their paper bitcoin to ensure the issuing institution is backing the paper with 100% real bitcoin.

whatever you do Paper metal or digital your in for a bumpy ride as this is what all will be up against.

“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” U.S. Attorney Tompkins said in announcing the verdict. “While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” she added. “We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.”

 The way to make anything possible is to have 100% backing of the people. !

@SunAvatar, I like you....   You have an uncommon amount of common sense. 

I've been told, just today, of the details of another project that I've been asked to keep quiet for now.     But I can tell you....  Lots of exciting projects are popping up like weeds!   Great new products, apps, and services are coming out of the woodwork!

Also...   I contacted the number one security paper manufacturing company in the US this morning.   The guy already knew all about Bitcoin... and is very enthusiastic about helping us with this project!   

He is Fedex-ing samples to me which I'll have by tomorrow morning. 

After TIT (thinking it through) more...   I believe that such a paper currency would PRIMARILY be used as a novel way to introduce new people to Bitcoin. 

Sort of like handing out business cards that have inherent value.

I'll keep you all informed here in this thread... and on the new weekly "The Bitcoin Show" on http://OnlyOneTV.com

But I'm beginning to think that we might have (at LEAST one) "working version" of the Paper Bitcoin in time for the Bitcoin Conference & World Expo in NYC.