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Am I missing something about how cutting notes works, or am I correct in saying that cutting notes relies on a centralized single-company-controlled server bein

Am I missing something about how cutting notes works, or am I correct in saying that cutting notes relies on a centralized single-company-controlled server being both online and releasing a decryption key? This entire release seems a little bit light on technical details so it's not clear to me exactly what notes are doing when they're transferred, but it does seem like on first glance there are a lot of red flags here. I would love to see a more detailed technical breakdown on that website that isn't just promotional material. ---- Even ignoring the centralization angle, all of the verification advice I'm seeing boils down to "scan each note and cut it when you receive it." And if everyone is going to do that, what's the point of using a physical note instead of an app? The promo images and descriptions clearly expect that this is going to be used like cash so that technical burdens are lessened for people who aren't good with more traditional cryptocurrency transaction methods. But if non-technical users use it like cash, they're not going to scan anything. And if you think you can teach them to scan every bill in their wallet with a phone, then... why not just teach them to use the phone?

ccamrobertson 4y ago
> Am I missing something about how cutting notes works, or am I correct in saying that cutting notes relies on a centralized single-company-controlled server being both online and releasing a decryption key? That's correct. > Even ignoring the centralization angle, all of the verification advice I'm seeing boils down to "scan each note and cut it when you receive it." And if everyone is going to do that, what's the point of using a physical note instead of an app? The promo images and descriptions clearly expect that this is going to be used like cash so that technical burdens are lessened for people who aren't good with more traditional cryptocurrency transaction methods. Not quite; rather than cutting the note you could re-key it and store it. Or, if you are planning to use the note immediately or near term in commerce, you might have sufficient confidence that our re-key service won't shut down (but yes, this obviously implies some trust if you hold notes without re-keying of claiming). > But if non-technical users use it like cash, they're not going to scan anything. And if you think you can teach them to scan every bill in their wallet with a phone, then... why not just teach them to use the phone? Because with a phone alone they need to store their keys locally. With re-keyed notes (or notes from family members who have re-keyed them), they can immediately store notes in a safe place without the problem of phone hacks or loss.
- danShumway 4y ago
  > Or, if you are planning to use the note immediately or near term in commerce, you might have sufficient confidence that our re-key service won't shut down (but yes, this obviously implies some trust if you hold notes without re-keying of claiming). Does this mean that your private servers have the ability to re-key notes? What prevents someone from scanning the chip or storing the user key that they generated, handing the note to someone else, and then walking around the corner and immediately using the scanned information to re-key it? Without understanding more about the technical details, this feels like unless a user is using an app to re-key immediately at the time of transfer that it's significantly less secure than normal cash. I guess I'm not completely clear on what you're doing with user keys. --- > Because with a phone alone they need to store their keys locally. But they have to do that here too, or is the assertion that they don't need to back up the user key necessarily and that it's not secret? Is the user key just plain-text readable? If the user key is accessible from the chip just via scanning (not cutting), and isn't a user-defined secret that only they know (which seems like would require some form of backup), then does that mean an attacker can just walk past my wallet with a reasonably powerful RFID reader and then rekey every single one of my bills?
  - ccamrobertson 4y ago
    > Without understanding more about the technical details, this feels like unless a user is using an app to re-key immediately at the time of transfer that it's significantly less secure than normal cash. We will have a security overview doc up soon, we ran out of time to have it ready today. Long story short, there are pending key rotation states and the latest holder can always re-key the note again. But it is indeed distinct from cash; we can't just state a note has value like governments do, by fiat. We have to provide users with sufficient information to assess the veracity of that claim relative to the functions of Bitcoin and the information we provide on the note. > But they have to do that here too, or is the assertion that they don't need to back up the user key necessarily? Not necessarily; in the condition where a user is confident they are the only ones that can claim, they can place the notes in a safe the same way they might printed Bitcoin keys or Opendimes (I would recommend a fireproof safe).
godelski 4y ago
The only use case I see to this is a non-electronic cold storage. Which is cool, but then do we really need all the fancy note cutting?
- cyphertruck 4y ago
  Except apparently you need to be online to send them the info after you cut the note. So its not really cold storage. What if their company shuts down? You can do cold storage by securing seeds on metal, such as titanium, or any robust material you like.
  - ccamrobertson 4y ago
    No, still cold storage. If the company shuts down you can use the plaintext user key to claim the funds from the note after January 3rd 2029.
    - danShumway 4y ago
      How are you doing time-lock encryption in this instance? Is it based off of a separate blockchain contract or is it one of the more traditional methods?
      - ccamrobertson 4y ago
        OP_CHECKLOCKTIMEVERIFY in the multisig.
        godelski 4y ago
        But why time lock it?
        ccamrobertson 4y ago
        The time lock lets you optimistically circulate the note prior to the expiration date as even if previous holders know the user key they cannot use it to claim the Bitcoin alone.
alx__ 4y ago
I feel like it's a visa gift card.
- rchaud 4y ago
  More like a "commemorative gold coin" ad you see at 3AM.
- deleted 4y ago
  [deleted]

ccamrobertson 4y ago

> Am I missing something about how cutting notes works, or am I correct in saying that cutting notes relies on a centralized single-company-controlled server being both online and releasing a decryption key? That's correct. > Even ignoring the centralization angle, all of the verification advice I'm seeing boils down to "scan each note and cut it when you receive it." And if everyone is going to do that, what's the point of using a physical note instead of an app? The promo images and descriptions clearly expect that this is going to be used like cash so that technical burdens are lessened for people who aren't good with more traditional cryptocurrency transaction methods. Not quite; rather than cutting the note you could re-key it and store it. Or, if you are planning to use the note immediately or near term in commerce, you might have sufficient confidence that our re-key service won't shut down (but yes, this obviously implies some trust if you hold notes without re-keying of claiming). > But if non-technical users use it like cash, they're not going to scan anything. And if you think you can teach them to scan every bill in their wallet with a phone, then... why not just teach them to use the phone? Because with a phone alone they need to store their keys locally. With re-keyed notes (or notes from family members who have re-keyed them), they can immediately store notes in a safe place without the problem of phone hacks or loss.

danShumway 4y ago
> Or, if you are planning to use the note immediately or near term in commerce, you might have sufficient confidence that our re-key service won't shut down (but yes, this obviously implies some trust if you hold notes without re-keying of claiming). Does this mean that your private servers have the ability to re-key notes? What prevents someone from scanning the chip or storing the user key that they generated, handing the note to someone else, and then walking around the corner and immediately using the scanned information to re-key it? Without understanding more about the technical details, this feels like unless a user is using an app to re-key immediately at the time of transfer that it's significantly less secure than normal cash. I guess I'm not completely clear on what you're doing with user keys. --- > Because with a phone alone they need to store their keys locally. But they have to do that here too, or is the assertion that they don't need to back up the user key necessarily and that it's not secret? Is the user key just plain-text readable? If the user key is accessible from the chip just via scanning (not cutting), and isn't a user-defined secret that only they know (which seems like would require some form of backup), then does that mean an attacker can just walk past my wallet with a reasonably powerful RFID reader and then rekey every single one of my bills?
- ccamrobertson 4y ago
  > Without understanding more about the technical details, this feels like unless a user is using an app to re-key immediately at the time of transfer that it's significantly less secure than normal cash. We will have a security overview doc up soon, we ran out of time to have it ready today. Long story short, there are pending key rotation states and the latest holder can always re-key the note again. But it is indeed distinct from cash; we can't just state a note has value like governments do, by fiat. We have to provide users with sufficient information to assess the veracity of that claim relative to the functions of Bitcoin and the information we provide on the note. > But they have to do that here too, or is the assertion that they don't need to back up the user key necessarily? Not necessarily; in the condition where a user is confident they are the only ones that can claim, they can place the notes in a safe the same way they might printed Bitcoin keys or Opendimes (I would recommend a fireproof safe).

godelski 4y ago

The only use case I see to this is a non-electronic cold storage. Which is cool, but then do we really need all the fancy note cutting?

cyphertruck 4y ago
Except apparently you need to be online to send them the info after you cut the note. So its not really cold storage. What if their company shuts down? You can do cold storage by securing seeds on metal, such as titanium, or any robust material you like.
- ccamrobertson 4y ago
  No, still cold storage. If the company shuts down you can use the plaintext user key to claim the funds from the note after January 3rd 2029.
  - danShumway 4y ago
    How are you doing time-lock encryption in this instance? Is it based off of a separate blockchain contract or is it one of the more traditional methods?
    - ccamrobertson 4y ago
      OP_CHECKLOCKTIMEVERIFY in the multisig.
      - godelski 4y ago
        But why time lock it?
        ccamrobertson 4y ago
        The time lock lets you optimistically circulate the note prior to the expiration date as even if previous holders know the user key they cannot use it to claim the Bitcoin alone.

alx__ 4y ago

I feel like it's a visa gift card.

rchaud 4y ago
More like a "commemorative gold coin" ad you see at 3AM.
deleted 4y ago
[deleted]