Cheque this out

Posted on July 30, 2012

4


(… Or “Check this out” if you’re in the States. In which case the pun maybe only works half as well.)

I has kindly given me a couple of codes for a free sample cheque. Sorry, all gone now.

A few days ago after reading a forum thread, I received a sample Bitcoin cheque in the post. The cheque cleared the Atlantic in less than a week, which was pretty impressive. And certainly a lot quicker than the magazine too. Here’s pics:

The front

The back

The cheques are actually produced by psjbeisler and also buyable here. As you’d hope, the cheque itself is pretty good quality, not just some flimsy thing printed onto tracing paper. It’s also made to be as usable as possible, with a QR code in one corner and the first bits of the public key in another, so it’s easy to check the balance of the cheque’s address, or to send new funds to it. (Compare that to the “traditional” problem of cheques bouncing.  A Bitcoin cheque is basically like handing over the key to a transparent safe, rather than the old-style key to a safe which may or may not have anything in.)

Some security features are listed on the back (“micro print border line”, “erasure protection”, etc), although these were somewhat obscured by the hologram sticker so an updated design could move the info. I’d also be tempted to drop the slogan saying “Interest Free Banking In Your Interest” from the bottom of the cheque, which seems a little superfluous and out of place.

Sadly, I’m not an expert on the security of paper and holograms. The main concern with any physical Bitcoin storage, though, is whether it’s possible to get to the private key without it appearing to have been tampered with. Private means Private. There’s always a possibility that someone can see through the hologram. While “real world” banks come with the assurance of the bank to cover fraud (to an extent), should Bitcoin cheques come with some kind of assurance from the manufacturer that if any problems are found, the cheques will be replaced?

I also noticed a forum thread on the reliability of using first bits* without actually funding it in advance – namely, a race condition exists where somebody else can generate a different address with that first bits address before you do, and “intercept” any further use of the short code after that. However in the case of this cheque, it looks like some very-minor-funding has been added to avoid this issue (0.00000001 BTC).

(* Actually this thread is a good read for other security and counterfeiting problems/risks with tangible Bitcoins.)

Deposit

I wanted to run some simple tests though, so I fired up my Blockchain Android app, hit “Send”, and scanned the QR code. Within a few seconds the transfer pinged up on screen and the cheque was live:

In a real-world situation, I guess this would be like writing out a traditional cheque – except you’ve now actually paid the money, rather than just promising to pay it. The person you’re handing the cheque to can do their own independent lookup on the address (assuming they have a network connection) and go “OK, this cheque is worth the paper it’s printed on.” Knowing where to look this up is a bit unobvious – I’ve suggested that the Android app lets a user quickly look up an address from a QR code, which would be a great step towards easier validation.

Alternatively, if there are any real concerns about the trustability of cheques generally, I can imagine these being a really simple way to exchange BTC between friends/other trusted parties where either the receiver’s network is unavailable, or the receiver doesn’t have a Bitcoin address yet, or have their address on them. I’d definitely carry a few of these on me for face-to-face local currency exchange, in case the phone networks were down.

Redemption

Seconds after taking the photo of the cheque’s back, my toddler son somehow managed to get drool and curious fingers involved, soggily ripping a corner from the cheque. Gah. Oh well, I figured it was a good opportunity to test out the whole expected lifetime of the cheque – time to cash it in.

I spent a few moments trying to pick off the hologram sticker, then realised it might be easier by scratching it with a key. I was going to use a coin, but wasn’t sure if using “old” money was an insult to Bitcoin or the old money. Within seconds, the shiny sticker disintegrated into the aether, like a lottery scratchcard that you already knew you’d won. Inside, 22 characters were my keyphrase to redemption.

I headed over to the web version of my blockchain wallet, clicked “Import/Export” and entered the 22 characters into the “Import Private Key” field – bang. The money (OK, my money) was mine (again). The circle was complete.

As I said above, I think cheques are a useful addition to the world of Bitcoin because you can hand them out to people new to Bitcoin (spread the love), fold them up and stick them in your pocket, and so on. There’s a strange paradox where if you’re using the network to fund and validate the cheque, then you could probably do a straight phone-to-phone transfer – but then not everyone runs a web wallet.

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Posted in: Exchanging, Reviews