The biggest complaint about Bitcoin? The fact that it doesn’t exist in a tangible form. It’s probably one of the biggest hurdles to overcome while trying to explain the concept of virtual currencies to a novice.
However, this problem might be resolved soon.
A Swiss startup, Tangem might have cracked this nut by creating physical Bitcoin banknotes. Although the new concept would be launched only in Singapore for now, it’s likely the initiative will pick up an international interest.
The banknotes were launched at Megafash Suntec City store in Singapore, and as the announcement says, the banknotes are:
“Available immediately in denominations of 0.01 and 0.05 BTC, Tangem Notes radically improve the simplicity and security of acquiring, owning, and circulating cryptocurrencies for both sophisticated and incoming users”
In the past, there were several attempts at creating a physical representation of Bitcoin, but it was merely a product designed for collectors and genuine enthusiasts.
How Do Physical Bitcoin Banknotes Work?
Although comparable to traditional banknotes, Tangem bitcoin smart banknotes work with an NFC-capable smartphone that verifies if the banknote is secure or not.
The notes also work as self-contained wallets with its own private key.
All banknotes are equipped with a high-grade EAL6+ protection – private keys that prevent the replication of wallet and its assets as well as malicious attacks. The entire process seems straightforward and much easier than the current way of transferring cryptocurrency:
“Physically hand over the whole wallet together with the blockchain private key. No transaction fees, no need to await confirmation blockchain.”
– Tangem Team
The notes have Samsung Semiconductor-manufactured S3D350Q chips embedded within them, allowing for bitcoin transactions to be made without using third-party devices.
As with any product being released in the crypto-space, security audits and publicly available open-source code are crucial to gain the community’s trust. At the time of writing, Tangem’s only publicly available code is for its iOS and Android apps on Github.
The company does, however, admit sharing the full source code of its proprietary chip firmware with a Swiss security firm, Kudelski Group. Tangem reassured, though, the company has completed a comprehensive security audit.
Do Bitcoin Banknotes Have a Future?
Well… Yes and no.
On one side, the idea contradicts the concept of cryptocurrency and creating a cashless society. On the other hand, however, physical banknotes can help with mass adoption of Bitcoin or any other cryptocurrency, making its use easier.
As mentioned before, the banknotes come in denominations of 0.01 and 0.05 BTC, so the maximum amount one would be able to spend is just under $500.
You can’t buy a mansion for it, but it should be enough for everyday expenses.
Tangem has only released 10,000 in the first batch, purely to assess whether consumers and merchants can actually see the benefits. In addition, the initiative was launched in Singapore, not by accident – the Asian country is a home to a thriving crypto-community. Hence, the interest might be higher than anywhere else.
Bitcoin banknotes also seem to be relatively easy to manufacture and the production costs were around $2, which is pretty low considering the advanced technology.
It remains to be seen how the transaction fees will be handled, as currently there don’t appear to be any.
Although physical Bitcoin banknotes only launched in Singapore for the time being, it’s an interesting idea that might eventually bring cryptocurrency closer to the public.
What do you think of the Bitcoin smart banknotes?