Quote from: elggawf on June 22, 2011, 04:34:38 AM

I am by no means an expert in smart cards at all, but I think the chief problem with this approach is that you still have to trust the device reading it. Correct me if I'm mistaken:

Say we're in the future where we can carry our Bitcoin wallet around on a smartcard. I go to Meze Grill, order something delicious and stick my card in the card reader. It asks me to agree to the 0.5BTC or whatever the future price of something tasty is, I tap "yes", it passes the transaction to my smart card and asks it to sign the transaction, before pushing it to the network.

Assuming I'm not misunderstanding something, so far so good.

Now what if the reader is compromised some way? With a smart card approach, there's absolutely no readout or anything of that nature that I can trust. The reader might ask me to agree to 0.5BTC and then ask my smart card to sign a transaction for 50BTC. The risk is reduced at brick and mortar businesses, but it's still there.

The risk is also there for credit cards of course, but drastically reduced because you can charge back credit card transactions that are fraudulent - you can't charge back Bitcoin (that's one of it's charms).

I definitely think pocket-wallet devices are a possible future for Bitcoin, but without them having a readout of the amount I don't think it'll work... and unless I'm mistaken they don't make smartcards with neat little screens on them. Sad

The same way bitcoin handles it now. You empty the entire contents of the private key, and give the remainder to a different PUBLIC address in the same wallet. Then even if they get the private key, who cares, there's nothing left in that address.