I'm sorry you don't like my narrative style. I'm trying very hard to stick to the facts and not over-dramatize. There's a reason I'm an engineer by trade and not a journalist.
And I'm sure your narrative style is much better than if I tried to tell it.
Just describe the user experience. There are plenty of people here who know plenty about cryptography, payments and getting service usage.
Note: here's all you have to tell us related to cryptography: the service is as secure as a mag-stripe.
http://en.wikipedia.org/wiki/Chip_and_PIN
> There are plenty of people here who know plenty about cryptography, payments and getting service usage
I've explained this to you before: not all of the people who read my blog are engineers.
> Note: here's all you have to tell us related to cryptography: the service is as secure as a mag-stripe.
Apparently I have to explain more than that because that makes no sense whatsoever.
Hm, if it quacks like a troll...
Hardly a troll.
You're moving the goal posts. You asked me to describe the user experience. It would be like chip-and-pin.
> Fraud is essentially a non-issue in card-present situations.
That is not true. If it were, they would not ask you to enter your billing zip at gas pumps. (Yes, I know they don't do this everywhere, but it is a very common practice precisely because card-present fraud is a significant problem in some areas.)
> Hardly a troll.
We'll see.
The user experience would be similar, yes.
> doesn't require new pos hardware
There are lots of ways it could be deployed. Some would require new POS hardware, others don't. But unlike chip-and-pin it wouldn't have to be custom hardware. It could be a smart phone or a tablet.
Compare: Electronic interference is essentially a non issue on aircraft... That is not true. If it were, they would not ask you to turn off your Kindle at takeoff.
Just because an industry does something doesn't mean it isn't cargo culting.
For that, you'd need to interchange payments with your system and bank accounts.
1) Gov't regulates financial institutions, and there are good reasons for it - otherwise Ponzi schemes and 'bankers' stealing deposits are a real pain and causes the public to ask for regulation. So they will want (force) you to submit to regulation if you want to do anything serious; or you may try to do "only information" and have another, licenced institution (a large bank) hold the actual money - this is what many finance startups do, but then they depend fully on the bank(s).
2) Gov't and banks don't like anonymous transactions, and there are good reasons for it - money laundering, tax evasion, organized crime and stolen money are very real issues. A basic principle is 'know your customer', i.e., don't do any [above $X] business with anyone you can't identify; and don't allow your customers to front payments on behalf of others, unless they identify all those others to you in each transaction. And it's often simpler/cheaper to disallow 'on behalf' deals at all than to integrate your customer/transaction data with the bank's systems. For example, see MtGox AML limits for money withdrawal - if you want to handle "real money", then that would apply for all transactions, not just withdrawals.
3) There are a bunch of consumer protection laws that may hurt you. For example, if a customer's account is hacked and money transferred, above a certain limit you (not the customer) will be liable for the loss. And there are other cases as well. So you (as the organizer) really, really want a money system where payments are (a) traceable, (b) revocable if legally required and (c) can't easily go to any other untraceable, irrevocable systems. Banks do so. The alternative is to charge huge fees to cover the risks to you.
4) Payment systems (ACH/etc) require huge collaterals or guarantees from participants - and there are good reasons for it, as you don't want to receive a gazillion payments, give the money to your customers, and then have the payer institution say that they're insolvent and won't cover the bill for the payment-messages that they sent. Technical and legal barriers to joining are also quite high.
And point 2... as a society, we have a very important decision to make. Do we trust our governments to control our money - and that of the terrorists, child pornographers and media prirates? The right to control our own money is disappearing as cash is slowly supplanted by cards, and I expect swift action against bitcoin if it gains traction.