Re: Tech details needed to give cryptocoins the benefits mandatory for true adoption
I figured the fact that they are mandatory right now was obvious enough to not go into it too much.
What do you mean by "mandatory right now"?
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Historically, receipts have almost always been issued on reserves, with the receipts being adopted as "money". I think in reality, this will be unavoidable with crypto whether we like it or not.
Historically, the choice has been to either lug around gold / chickens / whatever or use some sort of "note".
That's clearly not the case today with the vast majority of purchases being performed with cards of some sort. In 2011, only 27% of all point-of-sales purchases in the US were made with cash (reference).
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Not everybody is going to appreciate the mandate for an internet connection and some electronic gizmo to buy every last little cheap thing at the corner store. While it is true that merchants need an internet connection today for credit cards, the customers can get by with an inert piece of plastic, and cash is widely used. Many people do not use credit cards, especially person to person.
I would not characterize your piece of plastic as inert. These days, most people use credit cards with a chip embedded. But, regardless, any mode of storage (whether holographic, chip, or just a magnetic strip) will allow you to pay at an internet-connected terminal (like current credit card terminals).
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Physical notes, as in cash, are for every practical purpose, totally anonymous. I'm not sure how you can at all say that thay aren't.
Physical notes are the very antithesis of anonymous. I'm not sure how you can say otherwise
In all seriousness, I do understand what you are saying, but cash is almost always used in a situation where your anonymity is completely comprised already (face-to-face and, most likely, face-to-multiple-cameras).
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On the other hand, the forever in its entirety public blockchain/NSA/criminal botnet data mining/ISP traffic analysis/corporate controlled routing/subpoena risk combination is definitely not anonymous. Even if you succeed in being completely anonymous with bitcoin, your anonymity is forever at risk as soon as you transact with somebody who doesn't care or has slipped up.
No. Bitcoin can offer whatever level of privacy you want, regardless of what the person receiving the transaction does. Providing you're not getting something shipped to you, the maximum amount a vendor can leak is the payment transaction and item(s) purchased. That's the same as cash, but a lot less potential leakage than with a credit card.
Personally, I think what will happen - and this addresses multiple points - is that all point-of-sale purchases will happen off-chain, particularly small amounts. This allows instant confirmations while decreasing the effort needed to maintain privacy towards the vendor. (Effort still needs to be made to maintain privacy towards the third party providing the payment service.) This will add a slight cost to your transaction, but direct debit charges are very small (usually a small fraction of a percent) and this would be comparable.
There are a number of ways funding such a third party "account" could work (and if preserving privacy towards the vendor is a feature you want, "trust" that the third party isn't going to abscond with your money is necessary) and various technical methods of implementing the payment process and information stored on card / phone, all with varying features, but that would be beyond the scope of this thread.
For larger amounts or high risk transactions, using on-chain transactions and waiting for confirmations would be worth the wait.
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Higher adoption in the local physical world? Logical fallacy / circular logic.
I'm not sure how that's circular or anything but straightforward. Requiring A in order to achieve A is the very definition of circular logic. A = high adoption, in this case.
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Furthermore, although i didn't state it in the OP, it should be implicit that there would be banks or "wallets" coming into existence storing accounting entries of these notes, much like checking accounts, and these accounting entries can be reversed asymmetrically. I'm not saying I'm an advocate of this, I'm just saying it can be done, and the masses might mandate this in cases of fraud, non delivery, etc.
All of this could be implemented by a third party "wallet" using off-chain transactions at a much cheaper cost and lower risk than printing currency.
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The casascius coin, windowed envelope thing unfortunately can't work i don't think, because i don't think there is ultimately a way you can get around having to trust the maker of the thing to not know what the priv key is, and hence not spend the coin, like wheatstone pointed out. I don't think you can create a private key and truly prove you don't know what it is. I've tried to think my out of this exact problem for awhile and it's been on a thread or two with no good solutions (that I saw). Maybe with zero knowledge proofs or creative multi sigs or escrowing, but even leveraging all these features, i still don't see how you can achieve it.
Third party payment processing is the way this will happen. Yes, you will have to trust that third party with your money, but to lower the risk, the account could be funded as little as possible (and not reused). Although I said it was beyond the scope of this thread, I could go into great detail about how such a scheme could be constructed to give a maximum amount of privacy with a minimum amount of effort, should you wish