Quote from: ploum on May 09, 2011, 01:45:45 PM

If I understand that well, it means that you hide a code behind a sticker. With the code, you can get the bitcoins on your virtual wallet.

So, my questions are:

1) How do you guarantee the holder of the card that the coins are still available? Currently, we have to trust you (the emitter) *and* the fact that the sticker has not been removed, which looks a bit gross (it shouldn't be that hard to replace a sticker with another one).

2) How could the user be sure that the card was emitted by you? I mean, I could print a bunch of cards with QR code and stickers, sell them for 1 or 5btc. The holder will exchange them and a the time someone try to cash them, nobody will be able to trace the card to me.

The idea is interesting but could you elaborate on those two points?

Good questions. I've grouped the security concerns into three classes: Counterfeiting, tampering, and source-trust.

Source-trust means that you have to trust me, and I haven't thought of a good way around that. I promise that I put the bitcoins on the cards, delete the private keys, and use a secured manufacturing process. My hope is that as people begin buying, using, and redeeming Bitbills, they will form a trusting relationship with me the same way you might have a trusting relationship with MtGox and other companies.

Counterfeiting is the problem of others copying our cards and passing them off as real (presumably without even including the private key). Our cards are fundamentally hard to manufacture. When handling Bitbills, always check that the design matches the one shown on our website to make sure it's an authentic card. We use holograms that are very difficult to replicate. As our business grows, we plan to implement more and more security features.

Tampering is the problem of people extracting the private key without it being visible. We put the private key actually inside of the layers of plastic, so it's not just a simple matter of carefully peeling off a sticker or anything. The hologram is directly on top of the private key, also within the plastic. Even if it is somehow covertly extracted (once you see one of these, you'll see just how impossible that seems), the hologram destructs when removed.

We're working hard to make sure Bitbills are as sound as bitcoins themselves (if not better, since they clear instantly). But remember, like all the best stuff, they are BETA Wink