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In the bitcoin developer webpage, in the wallet page, more specifically at Mini Private Key Format it is explained what is mini private key format and what is its purpose.

Mini private key format is a method for encoding a private key in under 30 characters, enabling keys to be embedded in a small physical space, such as physical bitcoin tokens, and more damage-resistant QR codes.

What is a physical bitcoin token?

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The closest thing to an actual physical Bitcoin token is an OpenDime or a SatsCard, both made by coinkite.com. Those allow transfer of Bitcoin from the digital space into the physical, and back. Of course, physical Bitcoin inherit the limits of the physical space. If you lose it, break it, or it's taken away, then it's gone. But transactions with it also leave zero on-chain footprints and have near perfect privacy. Transactions happen by physical exchange of these items, which is why they can be considered as something like a "physical Bitcoin coin". And like a coin, their transactions are not centrally traceable. However, while a common coin is a metal piece with a denomination imprinted on it, the Bitcoin equivalent is a circuit that contains a (hidden) private key and can receive Bitcoin to its corresponding Bitcoin address. It also holds some data that the recipient can use to verify its balance, if online. More info can be found at https://opendime.com

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  • In the sentence with "zero on-chain footprint", I think that you mean that handing it from one person to another transfers ownership of Bitcoin without leaving a trace on the blockchain, but if people don't know how these physical keyrings work that's not really clear without more context. Could you please edit your post to clarify that point?
    – Murch
    Oct 17, 2022 at 18:52
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what is a physical bitcoin token?

A hunk of metal or hard material, usually in the shape of a coin. Sometimes a novelty or collectible trinket of no value, sometimes printed with a Bitcoin private key concealed below a tamper evident sticker, sometimes with a number that can be used to access some amount of money from the company that sold the token.

physical coin in a human hand
Image: Vraisa, Creative Commons Share-alike 3

These are really nothing to do with the actual Bitcoin network. Just as an amusement arcade token is not the work of a government run mint. They are not really part of the monetary system as envisaged by Bitcoin's creators.

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