Download Blockchain SC Technology WP FINAL March 2017 PDF

TitleBlockchain SC Technology WP FINAL March 2017
TagsCryptocurrency Bitcoin Public Key Cryptography Smart Card Debit Card
File Size1.2 MB
Total Pages34
Document Text Contents
Page 2

http://www.securetechalliance.org/

Page 17

Secure Technology Alliance ©2017 Page 17

A payment transaction is initiated using Mycelium (on a smartphone, tablet, or Web browser), and an
invoice number is generated. The user receives the invoice number. To initiate payment, the user keys
the invoice number in to the Mycelium card. When the card locates the referenced invoice in the back-
end system, it displays item details and the amount to be paid in fiat currency. Once authentication is
achieved using keys entered by the user, the payment transaction is completed on the card, and the
transaction is stored in flash memory on the card. Payment transactions are moved from the card to a
blockchain (ledger) as soon as the card comes in proximity to Mycelium hub (a channel that
communicates with the blockchain). Once the transaction is written to the ledger, it is removed from
the card’s flash memory.

3.3 Communications Front-End for NFC to Replace QR Codes

Definition Value Proposition Ecosystem Participants

Implementation

Considerations

and Challenges

Real-World Examples

Use of NFC as a mechanism for
accessing cryptocurrency

More reliable and secure
than QR codes

ATMs
Mobile wallets

Payment processors

Merchants
Handset/POS
manufacturers
Consumers, other users

Acceptance

Volatility

Plutus
Bitcoin Wallet

Dangerous Things

BitPlastic

Coinkite

Cryptopay

Most early implementations of cryptocurrency and bitcoin wallets rely on the use of QR codes to
communicate the receiver’s public key to the sender. While this implementation is simple, it is less
reliable than Near Field Communication (NFC). How readable a QR code is depends on factors such as
lighting, viewing angle, and clarity of the image. For this reason, some apps are starting to use NFC as
the communications front end for mobile wallet apps. Moving to NFC expands the potential for future
use cases to include wearables, where the use of QR codes is more problematic.

3.3.1 Implementation Considerations and Challenges

Implementation works similar to today’s contactless transactions, with the added complexity of having
to accept a new currency, potentially over a new payment network.

For person-to-person transactions, each person needs a mobile cryptocurrency wallet on a phone
supporting NFC. All participants have to provision their wallets by buying bitcoins or other currency.

For proximity payment to a merchant, a wallet like Plutus (Section 3.3.2.4) can be used. The transaction
goes over the traditional contactless payment network by first converting bitcoins into fiat currency.
The only requirement is for the merchant to accept contactless payments.

To pay a merchant with actual bitcoins requires that the merchant be set up to accept bitcoins.
Coinbase and BitPay act as the bitcoin acquirers for most of the mainstream bitcoin-accepting
merchants and payment service providers (PSPs).13 Alternatively, merchants can set up their own



13 Chris Dickey, “Current State of Bitcoin Acceptance,” First Annapolis Consulting Services, November 2014,
http://www.firstannapolis.com/articles/current-state-of-bitcoin-acceptance?status=success.

http://www.firstannapolis.com/articles/current-state-of-bitcoin-acceptance?status=success

Page 18

https://github.com/bitcoin/bips/blob/master/bip-0038.mediawiki
http://www.coindesk.com/meet-tiny-bitcoin-wallet-lives-skin/
https://plutus.it/case-study
https://github.com/ethereum/wiki/wiki/White-Paper

Page 34

https://www.securetechalliance.org/activities-councils-payments/

Similer Documents