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Show HN: Kong – Physical Cryptocurrency

kong.cash

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Re: Show HN: Kong – Physical Cryptocurrency

#41

Post by pedalpete »

ccamrobertson wrote: post #10
DeepYogurt wrote: post #5

Earlier quoted context omitted.

> with a fixed face value So how does a transaction work? Do I exchange a 500 kong note for a 10 kong item and 490 kong worth of notes?

Just like cash. So if you use a 500 Kong note to someone for a 10 Kong item, they will have to make 490 Kong in change. 4x 100 Kong notes, 1x 50 Kong note and 2x 20 Kong notes...etc.

How do you expect to get this into the market? And what market do you expect to get this into?

Cash has an inherent agreement as to locality. When I'm in Australia, I use Australian dollars, when in the US, they have US dollars.

Though you may be solving this problem, I can use Kong everywhere, you need to somehow seed the market. How do you see that happening?

As you state, crypto is mostly a store of value atm. The benefit of not having physical crypto is that, in theory, I can trade my crypto for goods anywhere in the world. How will having a physical currency solve for this?

I went to my corner store at about 10:30 a few weeks ago to pick up a late dinner. I took out cash to pay, and the guy behind the register had already entered my purchase into his FPOS (credit card) machine. He looked at me and said "wow...old school. First time I've seen cash all day". You clearly feel that you are not fighting against a dying mode of payment, what makes you believe that? Or is there a piece I am missing?

Re: Show HN: Kong – Physical Cryptocurrency

#42

Post by paulgerhardt »

advisedwang wrote: post #40

Does this mean someone needs to verify every banknote handed over to them? If not, what's to stop me giving people unloaded notes and them assuming they have face-value?

The imagined usability is like cash. Low denominations notes are glanced at to sure they're intact, high denomination notes are scrutinized more closely. The difference is one can validate these notes with a cryptographic operation rather than a highlighter.

Re: Show HN: Kong – Physical Cryptocurrency

#43

Post by akersten »

So once the time lock or whatever expires, I'm free to extract the value from my Kong and then go double-spend the physical bills in a corner store? In the hypothetical world where people use this, how are they expected to validate every note they receive?

Is there an equivalent to a starch pen like a suspicious cashier might use on a $100 bill today? Or is the process more painful? Does it require the internet? Remembering that many cash transactions happen person-to-person, in places with low or inconvenient connectivity.

Re: Show HN: Kong – Physical Cryptocurrency

#45

Post by bitwize »

ebg13 wrote: post #27
dmitrygr wrote: post #26

This seems like a VERY cool technical solution in a desperate and fruitless search of a problem. > They consist of a flexible circuit board, specialized secure element chips and an independent NFC interface capable of powering the secure element. Each secure element stores an internally-generated ECDSA key pair that is associated with a unique smart contract on the Ethereum blockchain Who wants bills that cost $3 ea,…

> Who wants bills that ... are not likely to survive a wash? Americans are already used to this.

American bills are made out of linen. They wash just fine.

Re: Show HN: Kong – Physical Cryptocurrency

#46

Post by undersuit »

mNovak wrote: post #39

So in theoretical use, is everyone expected to validate authenticity of each note exchanged? That seems painful for small transactions, but without it you lose absolutely all the security benefits of crypto, right? (e.g. vulnerable to good old fashioned counterfeiting)

Just do it like we do it in the US, $50s and $100s get checked consistently for counterfeits, $20s sometimes, $1s, $5s, and $10s never, and $2s are automatically assumed to be fake.

Re: Show HN: Kong – Physical Cryptocurrency

#48

Post by paulgerhardt »

akersten wrote: post #43

So once the time lock or whatever expires, I'm free to extract the value from my Kong and then go double-spend the physical bills in a corner store? In the hypothetical world where people use this, how are they expected to validate every note they receive? Is there an equivalent to a starch pen like a suspicious cashier might use on a $100 bill today? Or is the process more painful? Does it require the internet? Reme…

The expiration mechanic is how Swiss Francs work and we believe a necessary tradeoff for decentralized cash issuance to work.

Validation can be performed with any smartphone. Notes are issued in blocks so technically if you downloaded the 2019 Kong Registry contract you would not need connectivity to validate a note. Purpose built hardware can also be built or existing android based POS systems updated to support kong-like validation. Other anti-counterfeiting techniques have been explored but it the only thing that really matters is securing the root of trust.

Technically with Swiss Francs, the notes have no value after their "expiration date", with Kong the escrow contract unlocks and the token can be claimed off the notes but the precedent made us comfortable enough with this tradeoff.

Alternative implementation 1) notes are not escrowed and funds can be claimed off the bills immediately - this is effectively how paper wallets, java smart card wallets, and trezors work. This is a gift card instrument not a cash instrument.

Alternative implementation 2) funds are locked up into perpetuity - all tokens are eventually lost to breakage.

Our back of the envelope expectancy was 10 years for these notes. We wanted the majority to be reclaimable well before their anticipated breakage so we set a claim date relatively soon in the future.

Re: Show HN: Kong – Physical Cryptocurrency

#49

Post by aazaa »

I really like the concept of physical electronic cash, but in practice nobody has figured out how to make it work.

There are many attacks to consider. The most obvious is to obtain the private key. If you did so, you could give the note to someone else in an environment lacking network access. This would enable double-spending - the main problem Bitcoin solves.

The attack can range in complexity from breaking into the secure element to physically separating the element from the note. The latter approach was used way back to pull private keys from Casascius coins by dissolving the adhesive on the security sticker.

I suspect not all of these kinds of attacks have been considered by the creators.

If it becomes necessary to verify Kong with a network connection, the main value proposition disappears. That can be done already without a physical note.

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