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V14 2011 INDEX       E-SYLUM ARCHIVE

The E-Sylum: Volume 14, Number 45, October 30, 2011, Article 22

BITCOINS GO FROM VIRTUAL TO PHYSICAL

Dick Johnson forwarded this item, which was forwarded to him by his son. We mentioned BitCoins earlier - these are (yet another) virtual online currency. But here's a new twist - physical BitCoins. -Editor

Physical BitCoins

Bitcoins aren't just an abstract financial instrument living somewhere in the digital ether anymore. They're now a physical currency capable of taking a ride in your pocket or scratching off your lottery tickets.

The physical Bitcoins, called Casascius Bitcoins and created by a guy in Utah named Mike Caldwell, are made of brass, with gold electroplating on the 25 Bitcoin denomination. And, of course, they're tied to the peer-to-peer, open-source digital currency that's been exchanged on the Internet for a while now.

Each coin has a unique Bitcoin address and a redeemable "private key" under a hologram on the coin. That key can be used to redeem the value of the Bitcoins online, but the hologram sticker leaves a honeycomb mark when peeled back, so you'll know if your Bitcoins have been tampered with.

The coins play a function similar to a gift card or certificate with a magnetic strip or bar code. In other words, it provides a tangible means of carrying around the digital key that contains the actual value. There's just one problem--the physical Bitcoins may well be illegal.

U.S. statutes prohibit the creation of a currency that competes with the good ol' dollar. Before automatically crying foul, remember that PayPal uses dollars and other official currencies, and that things like various points and mileage programs and even gold and silver don't directly compete with the dollar, at least not yet.

To read the complete article, see: Are physical Bitcoins legal? (news.cnet.com/8301-17938_105-20125470-1/
are-physical-bitcoins-legal/?part=rss&subj=news
&tag=2547-1_3-0-20)

Wayne Homren, Editor

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To submit items for publication in The E-Sylum, write to the Editor at this address: whomren@gmail.com

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