The Royal Canadian Mint announced some time ago a new solution called MintChip, which appears to share some similarities to Bitcoin. How do those two projects differ, and how are they similar?
Note: My information about MintChip is a bit limited and may be incorrect. Corrections are appreciated.
Authority: Bitcoin has no central authority. MintChip is run by a government agency.
Security: Bitcoin is secured by cryptography. MintChip is secured by tamper-resistant hardware. (The Mint says they'll support other models, but I'm quite puzzled how they'll make that work with their framework.)
Anonymity: Bitcoin is pseudonymous. You perform transactions through an account and transactions are public. You can have more than one account. MintChip transactions are only known to the participants and the system operator.
Currency: Bitcoin is a commodity that acts much like a currency. The supply of Bitcoins is fundamentally limited by the mathematics of the system. MintChip is a way to trade fiat currency that can be devalued by inflation and whose supply is limited only by politics.
From the developer website of MintChip, we can see that:
From that information, one can speculate the following properties:
This leads me to guess, that the MintChip model of operation would be similar to the one of Open Transactions (although I'm not an expert in either). How I think MintChip would work:
Mintchip is designed to allow offline digital transactions. This is achieved by
Bitcoin is designed to allow peer-to-peer online transactions without a central authority. This is achieved by
They're similar in that they use public key cryptography to give a holder of currency exclusive authority to authenticate a transfer of their funds.
Besides the differences already listed, they also contrast in their government-backing. Mintchip, being government-backed, would likely see attempts to counterfeit Mintchip currency through extraction of the private key on the hardware prosecuted to the full extent of the law.
Mintchip is a payment system, and a wallet for multiple currency.
Bitcoin is a payment system, a currency, and a wallet for Bitcoin.
Mintchip greatest advantage over Bitcoin will come when Mintchip support payment in gold, redeemable for gold stored at the mint.
Bitcoin greatest advantage over Mintchip is being a borderless floating currency with a infinitely-divisible finite supply.
The two nicely complement each other.