MintChip is a fresh idea

Who would trust a form of currency that’s already been attacked by hackers? News flash: you would.

The concept of virtual currency tends to elicit dismissive chortles.  For example: Bitcoin, the peer-to-peer eCash system, has become a punchline in tech circles.  Who would trust a form of currency that’s already been attacked by hackers?  Who’d trust a form of currency that only has value if the people who use it believe that it does?

Newsflash: you would. In fact, you do.  Cash is hacked on a daily basis- counterfeiters and fraudsters have been plying their trades for as long as currency has existed.  And as soon as we stopped bartering in chickens, we accepted the terms of faith-based  currency.  If everyone decided that gold was no longer valuable, it wouldn’t be.   Currency itself is already an abstraction, and one which we’ve long since removed from the physical world via credit cards and bank accounts.  Most of our money is already digital.  So why not put it online, where it can move around easily?

We already have, of course, through online credit card transactions and through intermediaries like PayPal, but both come with problems.  We’re still uncomfortable handing out our credit card info to most websites, so unless we’re dealing with the Amazons or Apples of the world, PayPal becomes the trusted middleman.  But PayPal takes a significant cut, freezes transactions based on political pressure, and is far from frictionless.  The result is that online commerce, booming as it may be, is still stunted. The early Internet dream of micropayments, where I might sell you this blog post for 6 cents, instantly transfered as soon as you click through to it, remains unrealized.

It’s a global problem, and one that the Royal Canadian Mint is attempting to solve.  MintChip is their new virtual currency. Like BitCoin, it’s as anonymous as cash, leaving no electronic record of who paid what to who.  Unlike BitCoin, it’s backed by a central authority, which is bad news for the anarcho-crypto Illuminati-fearing libertarian crowd, but good news for people who actually use it.

Will it be hacked? Probably. But a currency guaranteed by a wealthy and stable mint can sustain a certain amount of fraud without collapsing.  The Royal Canadian Mint has launched an app challenge to kickstart MintChip.  Good luck to them.

Jesse Brown is the host of TVO.org’s Search Engine podcast. He is on Twitter @jessebrown




Browse

MintChip is a fresh idea

  1.  Who would have thought that the Mint…that most ‘establishment’ of institutions…would be so forward-thinking?

  2. choc mint chip is my fav ice cream. 

  3. Bitcoin and MintChip are barely comparable. The MintChip concept relies on special hardware embedded in devices, which would digitally sign transactions in a manner that is difficult to spoof. Essentially, the Mint would issue hardware tokens each containing a unique number used internally by the chip to digitally sign transactions. Getting that number out of the chip is impossible, thus the Mint’s solution is secure from the perspective of avoiding double spending. The MintChip solution is only as secure as the chip itself – lose the chip, and you lose your money.

    Bitcoin relies instead on a shared transaction register, which is secured through a “proof of work” system. Transactions are enormously secure, because the amount of computation that goes in to digitally stamping the transaction register is an order of magnitude greater than the power of the largest supercomputer in the world. This prevents double spending of currency.

    What is not secure about Bitcoin is the storage of one’s private keys – think of this as a very long password that provides an account holder with his or her claim on value encoded in the shared transaction register. If you don’t encrypt the private keys that give you the ability to transmit your Bitcoin value to someone else, then someone else can steal you private keys and spend your money as if they were you. 100% of the Bitcoin heists have been related to the theft of these private keys.

    Fortunately, the Bitcoin client software now asks for a password to encrypt your private keys post-installation. And web sites that store Bitcoins on your behalf have all greatly increased their security measures, and have provided insurance to customers to provide a level of trust that just didn’t exist in the Bitcoin world until late in 2011. These measures will gradually increase trust in the peer to peer currency.

    Finally, it’s worth mentioning that – at this stage – MintChip is an experiment funded by the Mint. Bitcoin is a fully functioning currency and payment system, in use by thousands of people worldwide, every day. If you want to send money to someone on the other side of the world, without involving an intermediary, Bitcoin is your only option – and probably always will be.

  4. Good news … considering Canada does not abuse individuals as portions of their government’s commerce; exampled by the method for controlling shipping lanes…redistricting people when someone is required to retool, then jacking up the local laws with Patriot Acts, etc. exampled by the united States…and at the same moment having a drug war, etc…until the uS boasts the most incarcerated for about 5 percent of the world’s population.That number will grow at a ratio will remain a constant in the uS…but things look a bit better in Canada.
    The rate of inflation last year in the uS averaged about 3.1 percent, each month for the total of 12 months. Considering the last 10 years…the dollar disappeared about three times, holding the single one dollar note in your hands.
    Everyone have a wonderful day…

  5. Opening line from the video

    “ever since the beginning of time, people have been buying, selling and using whatever currency is available.”

    That is blatant naturalization of capitalism. “Capitalism is essential! It’s rooted in our genes! We’ve been using it since the beginning of time!”…

    …except that people have clearly not been around since the beginning of time, and there are definately human societies on this Earth that don’t use currency.

    • Which societies do not use currency or barter?

  6. Is there a difference between  illicit dismissive chortles and licit ones?

  7. Great idea. This is the proper way to use tax payer’s dollars. Can’t wait for this to be implemented.

  8. As long as we can still use cash for transactions, I don’t see an issue with this.  If not there’s a long way to go before full implementation after all, how are people going to pay rent?  Not every landlord accepts checks, credit and/or direct deposit. 

    • It’s unusual for a landlord to accept cash only.

      •  In fact, my landlord DOES not accept cash payments, only cashier’s check/money order or personal checks! A little odd I think.

        • As a landlord I don’t accept cash for two reasons: 1) it means the tenant is probably a drug dealer, and 2) I don’t want to carry that much cash to my bank.

  9. and when technology fails. you have no money. No thanks, i’ll stick with what I don’t have to charge, can get wet, and not have to worry about buying technology and wasting MORE money on.

    • Please deposit four quarters in your computer to buy a song on iTunes and get back to me.

      • too bad i don’t buy music smart guy. step away from the computer for a while. there happens to be life out there

    • By using physical cash only you are limiting your options for purchases considerably. Digital cash solves many of these problems. Bitcoin, in particular, does have a physical option using BitBills or Casacius coins.

      • What is the point of bitbills or cascascius coins when you can just use an app on your phone? By the way, the only way to verify the value of that BitBill or Cascascius coin is to lookup the public key or bitcoin address associated with it in blockchian explorer. So technology is still needed to verify the value of any physical representation of a bitcoin. Might as well just use your phone to pay.

        • Looks like you answered you own question. At least with a digital lookup facility you can verify the authenticity with greater reliability than a UV light or special marker pen.

      • On the other hand, I suppose if you trust that the money was associated with that cascascius coin when it was printed and the hologram has not been tampered with, that is as good of a verification as it ever gets with any physical cash we have now…

        • In fact, the government could easily mint their own “Canadian Bitcoin” the same way cascascius has. In order to trust that cascascius coin, we have to trust its source.

  10. Entertaining and informative post…  except that most bitcoin users are too pragmatic to be characterized as paranoid conspiracy theorists.  Libertarians, sure, I won’t argue with that one.

  11. Are the transactions free?  And are the banksters being honest about no periphery data being attached to the transaction?  This aspect is highly suspect.  Using paper and digital credits works just fine.  This is just the next step in microchipping the population.  And I’m not religious.  The perennial ruling elite are the ones who wrote the prophecies and they are the ones fulfilling them.

    xdisciple.blogspot.com

  12. The interest generated by this fund would replace our current reliance
    on revenue from natural resources to pay for critical programs such as
    health and education, Prasad Panda Northern Hills Calgary, Canada.

  13. So…we’re from the government, and we’re here to help you.  Thank you, no- I will stick to bitcoin.

  14. I’m fairly confident that the only type of information that is safe from unauthorized/undetected read/write is quantum information. I wrote to the White House OSTP about this yesterday, in the context of their own 21st Century Grand Challenges.

    I commend the Royal Canadian Mint, but my conspiracy theorist brain is guessing that this will be hacked, and in a time frame wholly unexpected by the Government of Canada. I just don’t think that systems based on classical information can ever cut it.

  15. Interesting that you think Bitcoin has been dismissed.  No attacks against Bitcoin itself (versus attacks against where the Bitcoins are stored, which has nothing to do with Bitcoin itself) have yet been demonstrated, and the economy is still going strong, with Bitcoin stably trading at > $4

  16.  Hear hear.
    The “BarterSystem” is the best, and oldest of all of them, and it’ll always be with us, no matter what ! :)

  17. This is sadly the harbringer of the end times, once we have the the chip embeded in out hand or forehead, that is the end of what we know of this world, and the new heaven and earth is soon to follow, sadly, WW 3 has to happen before that. I am not even a reigious fanatic or anything, just read reveleations, and I think its pretty clear.

  18. I highly doubt that getting the number off the chip is impossible. I happen to know a few people who accomplish the impossible when it comes to fraud and I guarantee that it wont them long to hack this and star spending other peoples earnings. This whole concept better not be built around their beleif that it cant be hacked, duplicated and double spent, they had better have more security then just that or people will loose millions

    • Getting the number off the chip is redundant. All you need is possession of the chip in order to spend it. Just like cash.

  19. The reality of intention of the Mintchip will be realized when it’s seen who can operate the remote mintchip bays and a what cost. If it’s ‘the established banks and the established banks alone” then we’re no further ahead socially regardless of the merits of the technology. If Canadians can get organized, group their funds together and form their own bank and acquire the remote mintchip bays then that’s another question.
    Time will tell.

Your email address will not be published. Required fields are marked *