MintChip : Canadian Government Response to Bitcoin

Taking into consideration the emergence in the US of innovative payment solutions such as the Square and the emergence of projects such as Bitcoin, the Royal Canadian Mint has decided to enter the game with their own design Digital Currency – MintChip. This project is an attempt to supplement the main advantages of e-currency support for the Canadian dollar. “Until then,” – we read on the website – “there was no electronic solution that would offer a cost-effective approach to the market is very a low cost transactions, provide privacy, universal access, and incorporates the characteristics of real money.” And MintChip focused on the search for such a solution. The product “works online and offline, to the point of sale, on mobile devices and makes it easy to pay each other individuals.” No need for external authorization or intermediary, the payments are irreversible, the system has the economic efficiency, confidentiality and availability of, any current digital payment solutions can not provide. It even has some advantages compared with Bitcoin: instantly protected transactions, providing them with the Canadian dollar, and the ability to solve the problem of double payment, even without an Internet connection. At first glance it seems that the Mint was able to realize all of the major features of Bitcoin and even surpass its concept.

How could such a system work? Externally, the security model is similar to Bitkoynovskoy: the payment is made by sending a “value message” to MintChipa sender to the recipient MintChip, with message has a unique ID for the recipient, and a digital signature to prove that it came from the sender. Once MintChip Valuation sender creates a message MintChipa balance is reduced by the corresponding amount.The question immediately arises from any apologist Bitcoin: How the system to prevent double payments – which prevents the user from being able to send a payment, the chip back to the original state, and send payment again? Here, however, the answers become less satisfactory. At the heart of Mintchipa “is an integrated circuit that contains the electronic value and transmits values from one chip to another in safe mode”, that is, in fact, proprietary, protected from the entrance, and reliable electronic device. This chip will store the user’s balance and manage transactions from within, but it must be designed so that users can not enter into it, and his own to change the balance. Such systems are not new, and time has shown that for them, as well as on other forms of digital rights management ownership is too unsafe to build the environmental economy. About two years ago, chip Infineo, considered impregnable, was hacked by Christopher Tarnovsky with an electron microscope, needle and acid, and you can imagine how such a feat again soon, if at stake will be put unlimited ability to print money basically. Looks like a paradox empowering device user the ability to unilaterally modify its balance sheet, while the denial of this possibility to the user, even when the device is in his hands. This paradox seems much less convincing basis for a healthy and strong system of digital currency than the digital signature algorithms and proven in action common and publicly accessible blockchain.

There are other aspects of the system, against which users may argue Bitcoin. Model establishment of a centralized currency: the value of the cost initially introduced in the Royal Canadian Mint, and the customer gets value for the cost through authorized brokers. The system is designed to boost the ability to upgrade, giving power to mint, if desired, be administered periodically onerous tracking. Such innovative means of storing value as paper and brain wallets, can not speak, because nothing can be taken without a physical chip, and the use of an electronic purse can not be based on trust service provider.

However, much of the system is working properly. MintChip – a massive improvement over the existing financial model based on bank and credit cards as proof of payment is based on the model of digital signature Bitcoin, and does not go from the central suppliers. Ease of use Bitcoin on the model, a small fee for the transfer, irreversibility and other properties of real money, it’s all available here. Konfidenialnosti level can be compared with Bitkoynovskim because, although the operation is stored in the chips, a variety of devices MintChip can be bought without showing ID, and they are cheap enough so that people can buy a few “purses” to further protect their financial security. In addition, if users are willing to accept unsecured currency, Bitcoin has shown that they are ready for this, the system theoretically could even exist without the other trusted intermediaries except chipmaker.With regard to implementation, the Mint makes the system available to developers from the start, API issue in the languages Java, NET and Javascript and offering prizes worth more than $ 50,000 for the development of innovative payment applications MintChipa. MintChip is not a model that will look like digital currency in its final mature form, but rather a sign of the changes that approach. This project shows that the Canadian government has expressed a desire to move into the area of e-currency, and other government and companies are now much more likely to manifest desire to follow suit, perhaps even contribute to the adoption of a legitimate bitcoin.