BITCOIN SMART BANKNOTES - PART 2
Further information about the BTC 0.01 and 0.05 notes
As we reported a few days ago, Tangem, the Switzerland and Hong Kong based digital banknote manufacturer announced the launch of its smart Bitcoin banknotes in denominations of 0.01 and 0.05 BTC.
In Tangem’s earlier announcement, they talked about a first shipment of 10,000 banknotes but the website now proudly boasts with mass production, saying: “The first million entering circulation in early 2018, this is the only mass produced hardware carrier for digital assets.”
As Andrew Pantyukhin, Tangem’s cofounder explains in an interview with Hackernoon:
“Unlike using crypto currency online, physical transactions are immediate, free, anonymous and there are no fees. They are truly decentralized, meaning it will never be restricted by technological limitations.”
What Tangem based their business idea was that, although using a crypto wallet is getting easier and easier, it’s still not simple enough for newcomers and there are still too many news about security threats. On the other hand, everybody understands how physical cash works and how to keep it safe. That’s why Tangem came up with the idea of tangible crypto.
Each 0.01 and 0.05 banknote is self-contained. It means that even if the chip of a banknote were compromised (according to Pantyukhin, the chip in Tangem banknotes has nine levels of physical protection), it would not pose a threat to the other banknotes in circulation. Therefore a hacking attempt to steal 0.05 Bitcoin would be an uneconomical decision.
Interestingly, if you go to tangem.com the very first clickable option is “request samples”. It is not explained what they mean by that. If you click on it it says, “Let's see if we have one or two Tangem prototypes waiting just for you!” All you have to do is type in your e-mail address, your name and mailing address and answer the following question: “A word about your relation to Tangem or intention with the prototypes?” Based on the information that you enter, Tangem figures out if you “deserve” a sample. We had nothing to lose: today we submitted our info requesting a sample. We will see.
Why they picked Singapore for the pilot sale?
It doesn’t come as a surprise if you take into consideration that the Asian city-state serves as the financial and commercial hub of South East Asia, and from the point of view of financial regulations regarding the blockchain technology and crypto-currencies, Singapore is ahead of its peers. As it says in blokt.com’s article: “Its central bank, the Monetary Authority of Singapore, has developed blockchain-based software prototypes for decentralized interbank payments and settlements as leader of a consortium with financial institutions and technology companies.”
Talking about production costs, Pantyukhin says that each banknote currently costs $2 to produce. So, in the case of a BTC 0.05 smart banknote, the production cost is around 0.4% of the nominal value of the banknote. For a BTC 0.01 banknote it’s a 2% cost. But if real mass production starts, meaning billions of units, according to Pantyukhin, the production cost will not exceed that of present paper banknotes.
We will keep our eyes on Tangem’s ambitious plans.