casascius.com
One big weakness is they seem to be "single use" though, as they need to be torn open to be used.
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 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 ;)
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)
whatever becomes of bitcoins, for the first time in a long time i've felt like i live in the future.
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.
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.
http://lesswrong.com/lw/ne/the_parable_of_the_dagger/
They are _not_ instantly verifiable without destroying the coin.
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.
There is still no real market for this, though.
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.
Gold and silver coins also cost more than spot.
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?
So it is sort of "centralized" with the hologram makers, right?
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?
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.
Is this really meant to have any practical use? Looking good is the main purpose IMHO. I'm ok with that.