I assume it's the private key that's under your finger. Without any additional security measures, how can one be sure that a paper coin is unspent?
The idea with these is that the receiver of a bill scans the private key, immediately moving the funds to another address. The bill can then be discarded.
So stupid... if you NEED INTERNET ACCESS to verify it, then why is it in paper in the first place?
This is only useful for personal offline backup, never to be used for public transfer.
The recipient needs internet access. I plan to use this method if I for local, in person sale of my bitcoins for cash.
For example: I have a localbitcoin ad to sell 10BTC. Someone responds and we meet wherever he is comfortable with his internet access. I print and fund a 10BTC bill before going out to meet him/her. We exchange cash for paper, and they transfer the coin to there own wallet. Yes, they should have access, but I don't need anything other than my printed coin. I don't have a smart phone so this is ideal for me.
Offline bitcoin transactions will never work unless you have strong cryoptography based hardware, and the coins are held by an escrow third party. (escrow would need to hold those funds for an amount of time until both parties hardware has checked in with the master server)
Unless you are talking about just transacting with your well trusted friends, there is always a breakdown of trust in multiple locations:
- So only the recipient has internet access in your example: he doesnt want to hand you cash until he sees the private key you are handing over actually has money in it. So he can scan it, hand it back and say it was already empty and runs away. Well he just stole the coins.
- (Well just let him scan the public key and not the private one) well ok in that case you can scam him by NOT putting the REAL private key under your thumb
- He doesnt want to hand you cash until he knows he can get bitcoins, you dont want him to scan any private key until you have cash
Lets pretend for a minute none of that matters, say casascius physical coins have a hidden private key under a hologram... Well if casascius wants to make any profit at all he has to sell them for more than they are worth. This means that if it is at all possible to make a fake, that costs less than it is worth, the market WILL get flooded with fakes.
Now there is one scenario that may work: if it costs MORE to produce a physical bitcoin representation than it is worth. In that case you wouldn't want to make a fake that costs more than its worth. But why on earth would anyone do such a thing? They can not make profit and lose money doing it?