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This overly broad patent application claims methods of storing bitcoin public and private keys on a physical device (a paper wallet), and claims methods of protecting value stored on a physical device using tamper-resistant features.

While the patent application was filed with Bitcoins in mind and especially to cover BitBills cards, claims are much broader and there probably is plenty of prior art for all the claims. This patent application was covered in Bitcoin Magazine.

TITLE: CREATING AND USING DIGITAL CURRENCY

Summary: Among other things, a physical device carries value and can be physically delivered in a transaction. The physical device includes a representation of the value carried by the physical device. The representation is usable to transfer the value from the physical device to a digital domain. A security feature can change from a state indicating that the value carried by the physical device has not been compromised to a state indicating that the value carried by the physical device may have been compromised. The change in state is detectable, the representation of the value carried by the physical device being inaccessible except in a manner that causes the security feature to change state.

Translated from legalese: Applicant tries to patent a paper wallets or smart card containing some monetary value that can be invalidated.

  • Publication Number: US 20130166455 A1

  • Application Number: US 13/336,779

  • Assignee: Douglas Feigelson (inventor) from BitBills

  • Prior Art Date: Seeking Prior Art predating Dec 23, 2011

Claim 1 requires each and every step below:

  1. An apparatus comprising a physical device that carries value and can be physically delivered in a transaction, the physical device comprising

    • a representation of the value carried by the physical device, the representation being usable to transfer the value from the physical device to a digital domain, and

    • a security feature that can change from a state indicating that the value carried by the physical device has not been compromised to a state indicating that the value carried by the physical device may have been compromised, the change in state being detectable,

    • the representation of the value carried by the physical device being inaccessible except in a manner that causes the security feature to change state.

In English this means:

A smart card or paper wallet with

  1. A monetary value that can be transferred out from the paper wallet to a digital domain

  2. A security feature determining if the value on the paper wallet was compromised (withdrawn)

  3. A mechanism to trigger the security feature when the value is transferred out (to prevent double-spending)

Good prior art would be evidence of a system that did each and every one of these steps prior to Dec 23, 2011. The to a digital domain part is probably the tricky part.


What is good prior art? Please see our FAQ.

Want to help? Please vote or comment on submissions below. We welcome you to post your own request for prior art on other questionable US Patent Applications.

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4 Answers 4

http://en.wikipedia.org/wiki/Microsoft_Points nails it on all three claims.

1) Digital domain: The points only have value within the scope of Microsoft's online apps.

2) Security feature: The cards have a scratch-off area containing a PIN code you need to enter to redeem them.

3) Double-Spend mechanism: Points are tracked at a central server, which prevents points on a card being spent twice.

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The wikipedia page is not very explicit concerning the history of Microsoft Points. However, based on this post, they were already around in 2007. –  Joannes Vermorel Aug 6 '13 at 6:30
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Pointed out by some folks on Reddit, Bitaddress.org had already in November 6th 2011, a bitcoin-address-to-paper conversion mechanism as illustrated by the source code on GitHub.

We have an explicit Bitcoin paper wallet. In particular, QR codes were already provided, aka providing a direct support for transmission from the physical (aka paper) medium to a digital domain.

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Does Bitaddress include the security feature described in the application? From what I understand, you need to tamper the BitBill to get access to the QR code. Otherwise, one could still argue that combining QR code/bitcoin with some foil for security is obvious to the skilled of the art. –  Paul Guyot Aug 5 '13 at 14:58
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This sounds almost exactly like Casascius physical bitcoins, which were first released in September 2011. Each coin contains a Bitcoin private key protected by a tamper-evident hologram sticker.

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https://bitcoinpaperwallet.com is a fork of Bitaddress which includes a tamper-resistant design (hiding the private key) using tamper-evident stickers. Basically it's the paper equivalent of Casascius coins.

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