Quote from: odolvlobo on January 26, 2014, 04:30:12 AM

Quote from: beeblebrox on January 25, 2014, 11:41:20 PM

Quote from: odolvlobo on January 25, 2014, 05:48:01 PM

Quote from: beeblebrox on January 25, 2014, 07:40:21 AM

I think you guys don't realise that ability to do off-chain transactions electronically already exists: https://bitcointalk.org/index.php?topic=321085.0
It is quite easy to extend this system to do off-line NFC transactions also (in fact the creator of the project intends to implement this I believe).
The way these off-chain transaction work is basically an electronic equivalent of a Casascius coin....

And like the Casascius coin, it is susceptible to hacking and counterfeiting. How does your system detect duplicate keys sent from a hacked or counterfeit device?

It prevents counterfeiting with tamper resistent SD smart cards.

I'm not sure you answered my question. When you receive tokens from somebody, how can you be sure that they have not been duplicated. Also, how can you be sure that their bitcoins have not been spent at times when you don't have access to the block chain?

When preforming a transfer operation the smart card only ever gives the private key to another smart card of the same type (they do a formal handshake involving secret keys to convince each other that they are genuine cards). You are relying of the smart card hardware. Now some people here claim that smart cards are be hacked-- this is true, however it is a very, very hard thing to do. It is harder to crack a smart card then a desktop computer. Also, the system uses a spilt key-- you need compromise both the smart card and the phone. If you're paranoid and have access to the Internet you can check via the blockchain that the balance of public address hasn't already been spent before accepting.

Personally, I'd feel comfortable having a thousand dollars worth of BTC on such a card-- however some people may not like to store such a large amount so they might limit themselves to only a couple of hundred or even just tens of dollars. You don't have to put all your bitcoin on the card. Even with just $40 dollars a day on a card most people could cover their daily small expenses, eg: coffees, smoko/lunch, parking, newspapers, lending a 10er to someone, small purchases on the Internet such as music, movies or reading material (yes this system can also be used over the internet as well as locally face to face), etc..