I can send US dollars electronically and they get recorded electronically at my bank. However I can also get a piece of paper to represent different amounts. For example, my bank will give me a 'hundred dollar bill' to represent 100 US dollars. This is the largest amount of US dollars that one US bill can represent. Billionaires would need a lot of them to carry around their US dollars. However, at least it is possible in theory. Does Bitcoin also support using physical paper 'bills' or is it strictly electronic?
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2 Answers
Bitcoin is only stored on the blockchain. Unlike a fiat currency, where the banknote holds inherent value (i.e., the banknote holds its own value - it does not rely on another system to say it has that value, and a $1 banknote will always maintain its value of $1).
Bitcoin is always on the blockchain. A wallet, or paper wallet, only holds the private keys that can spend certain outputs on the bitcoin blockchain. As long as the outputs corresponding to those keys are unspent, a wallet will hold value.
However, once those outputs are spent, a wallet would have no value (unless more transactions created new outputs controlled by that wallet).
Paper wallets allow you to put a private key on a piece of paper. However, if the money controlled by it is spent, the value written on the paper will not be true.
Additionally, Tangem sells banknotes that contain some BTC that cannot be easily spent, making it function more like an actual banknote.
answered May 12, 2018 at 8:15
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Tangem looks like an interesting idea, a digital equivalent of a paper wallet.– WilltechCommented May 12, 2018 at 8:36
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Yeah, I haven't had the chance to try one for myself, but I'm going to Singapore soon, so I'll probably stop by and see how it works Commented May 12, 2018 at 8:54
You can easily create a Paper Wallet and transfer any amount of Bitcoin that you like there. Note that for security and privacy the site should be downloaded to your computer and used offline. Also of note, some random generators are not truely random allowing at least theoretical attack. I have seen no reviews for the linked site, good or bad.
