
Show HN: Kong – Physical Cryptocurrency - ccamrobertson
https://kong.cash/
======
ccamrobertson
Hi folks, I’m one of the contributors at Kong —
[https://kong.cash/](https://kong.cash/). Kong is a physical cryptocurrency
that looks, feels and works like traditional cash. You can think of it as an
ultra-secure, time locked cryptocurrency wallet with a fixed face value — no
one can access the token except for the holder of the note after a period of
several years. It consists of a secure element and NFC chips mounted on a
flexible PCB with a full color print. There are several gold elements that
also serve as direct i2c interfaces to challenge the secure element’s
authenticity by signing information with its private key.

Kong is based on two primary observations; (1) it’s really difficult to use
and secure cryptocurrency for most people and (2) cryptocurrency has been
useful as a means of speculation, but poor for actually buying goods and
services. It’s our hypothesis that by making cryptocurrency more like cash it
may be possible that people ultimately use it as a means of exchange.

Our background is in secure embedded hardware (Lockitron, YC S09); over the
past year we did a deep dive to really consider how cryptocurrency key
material is handled today. We found that cryptocurrency has a unique challenge
and corresponding opportunity; unlike IoT products where the cost of a breach
might be difficult to quantify, breaking a hardware wallet can yield clear
rewards to the hacker.

We developed Kong around the notion that security should be isolated to the
smallest possible footprint — in the case of Kong, to an individual single
purpose secure element chip. Doing so removes additional layers of firmware
and software in order to limit the attack surface (it also broadly questions
how good are our existing secure chips today).

To date we’ve handed out close to 2,500 Kong notes; we’re now exploring more
ways to distribute physical crypto. Take a look at
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)
for an in-depth technical overview.

~~~
XMPPwocky
A user accepting these "verifies" them by assuming that two properties hold if
they connect over NFC or via pogo pins to the "gold elements", send a
challenge over this connection, and receive in response the challenge signed
with a public key associated with locked Kong tokens.

1\. the relevant private key is known to only a Kong note's secure element.
this is (hopefully) enforced by the secure element's, uh, security, and by the
issuer.

2\. the relevant private key _is_ known to _the secure element on the specific
physical Kong note the user has been given_.

2 is unenforced in your current design, from what I can see. A crafted note
can relay all communication to the secure element of another note (e.g. over
low-power RF from a single-use battery or small ultracapacitor).

better, a "dead" Kong note which performs no NFC communication can be given to
a merchant; then, a high-power NFC transceiver can be used to pretend to be
the note wirelessly (from a handful of meters away, but in a lot of situations
that's more than enough). Of course, this one only works if the verifier is
using NFC, but... This one is particularly nasty because it's relatively
straightforwards to "weaponise" \- imagine buying a "kit" off AliExpress which
contains fifty dead notes, a ProxMark, and an amplified antenna. Then, in any
situation where you're close enough to the person who'll be verifying your
notes... just give them a dead one and relay communications. Verification
passes, but what the merchant ends up putting in their cash drawer is
worthless.

~~~
londons_explore
Are there any solutions to the relay attack you describe?

Perhaps by having the secure element "lock" and "unlock" each time the note
changes hands, so that an attacker who uses a a relay will still have his note
locked in a way that makes it useless unless he gives it to the recipient to
unlock?

~~~
andreareina
Depending on how much jitter there is in the time it takes to countersign the
challenge, RTT might be one way.

------
krick
I don't get it. Is it some sort of concept art? What's the point?

Sure, it can be used as money (assuming what authors say is correct).
Virtually any physical items that are hard to fake can be used as money, as
long as people believe it's worth something. And if we are okay with
complicated and rather expensive manufacturing process (since Kong isn't
something you find in the forest), it really is a non-problem to create a new
"government-independent currency", print it and sell it. Nobody really gives a
fuck about that, because money is worthless unless you can spend it. And as
long as Costco doesn't accept Kong (or any other made-up currency), it would
be hard for you to spend it on anything other than unique hand-crafted chairs
or cocaine. And it would be hard for them to start accepting Kong notes, while
being a government-compliant entity that pays taxes, as every physical bill
they get must be accounted for and put into a cashier machine.

And, by the way, since every Kong bill is unique, it isn't any more anonymous
than dollar bills: i.e. pretty much anonymous as long as they change hands
without touching real cashier machines or ATMs, which, as it happens, is not
so long, because people don't generally exchange unique hand-crafted chairs
for cocaine, they buy/sell it, then go to Costco to get some more conventional
goods or services.

~~~
paulgerhardt
Kong has the useful property of peer-to-peer validation. Most paper currencies
printed in your basement don't.

Tokens loaded onto Kong Cash instruments and exchanged ephemerally in person
between party A and party B are more anonymous than tokens sent directly from
party A to party B electronically which will be recorded for everyone to see
forever.

It's programmable money. It's cooler than non-programmable money. We're
putting it out there as a toy.

~~~
bduerst
This is either some of the best satire in the world or I still don't get it.
Probably the latter.

~~~
Terretta
Don’t discount the former. Or performance art. Or a test for next season’s
plot from Pied Piper or Hooli.

Are we not entertained?

~~~
majortennis
there's no next season the finale was monday

------
elil17
I see so many people here frustrated with the fact that the creators are
giving nonsense answers. It's important to remember that this is a money-
making scam. Asking them how their technology provides any value to users is
like asking a Nigerian prince about the philosophy behind constitutional
monarchies.

~~~
jotakami
Usually I would agree with you but this is an intriguing concept. They
explicitly state in the white paper that this is an experiment, so treat it as
such. All I’m hearing is a lot of “contempt prior to investigation”.

~~~
the_pwner224
I agree that it is an intriguing concept. But at the same time they seem to be
ready to sell Kong for $$$. And they don't explain why there are three tiers
of rarity to the cash - shouldn't 500 KONG == 500 KONG all the time every
time? Seems like a mechanic to raise more money, just like 'rare' cosmetic
items in video games.

~~~
ccamrobertson
The "tiers" are just bundle names. We could have been super dry but decided to
make it more like collectable cards packs; our expectation is that most people
will buy Kong since it looks cool (that's totally fine with us). Our margin on
Kong is typical of other startup hardware projects; not great. We're not
raking in cash from a digital token sale.

We've made a physical product, we'll sell it to cover the costs of doing so.

~~~
qwtel
I agree that they do look cool. They remind me of euro notes but turned up a
notch or two.

But I'm wondering what made you decide to go with the generic greek bust
heads? Missed opportunity to depict some cryptography and computer pioneers
imo.

~~~
paulgerhardt
Some of the design elements are skeuomorphic throwbacks to traditional
currencies.

One design pattern among currencies is "person on front, place on back" \- we
didn't want Kong to be too geographically local so we picked the planets
(Mercury, Venus, Mars, Luna, etc) for the places and the associated Roman
pantheon. Romans used currency while Greeks famously didn't. (Lydians aside.)

------
zelly
IMO this breaks the entire security model of cryptocurrency. If these bills
are intended to be spent hand-to-hand in meatspace without cryptographic
validation on a computer, then it is no longer a cryptocurrency. It is another
paper currency like the U.S. Treasury's.

The innovation of Bitcoin was money as a purely digital artifact that cannot
be double spent. As a merchant accepting Kong bucks, I have no idea how many
duplicates of a particular Kong note there could be out there. I could find
myself in a race between many other people to move the Ether out of that
private key. To rely on embedded chips and watermarks to prevent
counterfeiting and double-spending seems like a huge step backward, like
you're trying to make a better $100 Benjamin instead of a better
cryptocurrency.

I get the idea of quick, zero-fee transactions. But there needs to be some
finality or pseudo-finality. The Lightning Network uses a similar model as
yours, but it has collateral. Analogously, in the way Lightning solved this
problem, the merchant has 5 actual Ether on file for a customer that the
customer sacrifices if they ever double spend a Kong buck at the store.

~~~
paulgerhardt
The bills are intended to be spent hand-to-hand in meatspace with
cryptographic validation. See section 2.1 [1]

The innovation of Bitcoin was decentralized electronic peer-to-peer cash. Kong
does not remove any of those elements and makes the overhead of the peer-to-
peer bit easier.

Physical cash is still the dominant form of payment. The advancement here is
figuring out how to issue physical cash without needing a central entity.

I like Bitcoin but it is anti-privacy by specification. For small transactions
I prefer cash. I would like the best of both.

[1]
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)

~~~
monocasa
What does Kong bring to the table that a gold coin does not?

~~~
ottolin
Honestly I dont think it does anything that a gold coin cant do in practical
level.

However, a gold coin will remain valid if dropped into water or fire.

------
CptFribble
If I can't take your space money down to the diner and buy a plate of bacon
and eggs with it, then as far as I'm concerned it's not real.

There's a chicken-and-egg problem that I think goes missed or unmentioned by
all these crypto startups trying to piecemeal a "solution" to the centralized
banking problem: in the monetary system, individuals have absolutely no power,
because we're at the bottom of the hierarchy of spending.

Joe Schmoe's dollar has value because he can buy a soda at the diner with it.
The diner takes the dollar because they can use it to pay their staff and buy
more supplies. The supplier takes the dollar because they can pay their staff
and and buy raw materials. And in between every layer, the banks store the
excess operating capital and profits.

Decentralized currency can only work if it can occupy every layer at once,
across the world. Anything less is just straight out worse than regular money
from a usability standpoint, and that's before you mention that now we're all
responsible for our own money security.

Yes, people out there have been wronged by the current system, but the average
modern human's relationship with money can be essentially summed up as
follows:

1\. Perform labor

2\. Receive paycheck

3\. Deposit in bank

4\. Purchase food, shelter, and netflix

So what is this kind of pseudo-money-computer-chip-paper for? No matter the
fancy technology thats woven into its fibers, if I pay the Kong people for 10
Kongs, how do I, Joe Schmoe, turn 10 Kongs into a pizza? How do I, Jane Pizza-
Maker, find a supplier that will sell me tomatoes and flour for 10 Kongs? How
do I, Rachel Dough-Maker, find a wheat farm that will accept Kongs?

All of this has to happen simultaneously, because business owners are busy and
don't have the time or the energy to incrementally work space money into their
cash flow.

Yeah sure, centralized banking has issues. But a bottom-up approach is doomed
to failure because we don't live in barter-based villages anymore. Every
transaction is part of a hierarchy of money-transfers that extend from the
local diner through dozens of entities across the planet and back again. Are
you making enough Kongs for all of them?

~~~
paulgerhardt
By that definition, any foreign currency isn't real.

I might suggest an alternate definition: Money is a transferable record of
debt valid for a period of time and amongst a network of peers.

Generally we think of money as local to a country and its government. However,
one could imagine a 'minimum viable money' that could work in a space as small
as a table and with only a handful of people - and for the purposes of a game
like Monopoly, while the game is ongoing the money in the game serves a real
purpose. From there things get pretty blurry as any World of Warcraft or Eve
player will tell you.

~~~
jen729w
> By that definition, any foreign currency isn't real.

And that's why you generally can't pay for your eggs & bacon at the diner in
Wisconsin using British pounds.

The difference here is that you can trivially go to your bank and exchange
those pounds for US dollars. Good luck getting them to exchange your Kong.

------
Barrin92
I genuine can't tell if this is satire or not. This is like one of these web-
framework to desktop and back again pieces of software

Why should anyone buy a crypto currency you can barely use anywhere in
physical form if I can just use regular cash?

~~~
biolurker1
You are missing the point of crypto in general. It is a trust less fixed
inflation and issuance decentralized non government controlled global currency

~~~
Barrin92
it is none of these things. The value of cryptocurrency swings wildly, the
primary way to interact with it is through exchanges which are ordinary
trusted institutions, and they are far from globally useable.

What you are missing is that I need to pay my bills in practice, not in
theory. I measure the value of cryptocurrency against what it delivers in
practice, not on the white paper of the people who are going to benefit from
its adoption.

~~~
biolurker1
I have paid numerous things in bitcoin and you can even pay some bills. People
do exchange it directly just not in your circles. I'm not saying that adoption
is massive yet but you need to differentiate the idea with the current status.
Value is in price discovery mode and will be for the foreseeable future but
the volatility is going down. Lastly you can argue without down voting
different opinions.

------
aazaa
I really like the concept of physical electronic cash, but in practice nobody
has figured out how to make it work.

There are many attacks to consider. The most obvious is to obtain the private
key. If you did so, you could give the note to someone else in an environment
lacking network access. This would enable double-spending - the main problem
Bitcoin solves.

The attack can range in complexity from breaking into the secure element to
physically separating the element from the note. The latter approach was used
way back to pull private keys from Casascius coins by dissolving the adhesive
on the security sticker.

I suspect not all of these kinds of attacks have been considered by the
creators.

If it becomes necessary to verify Kong with a network connection, the main
value proposition disappears. That can be done already without a physical
note.

~~~
paulgerhardt
We have considered both of those attacks and address them in section 2.2 and
3.2 of the white paper respectively[1]. The short version is the key
extraction attacks on this specific hardened chip are more expensive than the
value they escrow, and in the event a key was extracted it creates a race
condition at the period of claim not during the lifetime of its use - still
providing some utility. What Kong does that Casascius didn't is provide
guarantees that the minter never saw the private key.

[1]
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)

~~~
melcor
> in the event a key was extracted it creates a race condition at the period
> of claim not during the lifetime of its use - still providing some utility.

So say the key was extracted, you would not be aware until the "maturity" or
whatever time you can claim the real value?

How would one then know and trust that the note I'm holding on to won't be
claimed by someone else at the period of claim? As far as I see it my best
option would be to try and offload any Kong in my possession as soon as
possible for real goods or other currency.

------
luminiferous
Question: since bills can be either loaded or unloaded (either because they
haven't been put in circulation yet, or because they're counterfeit), doesn't
that mean that e.g. a vendor taking my Kong who has no trust in me would have
to individually check each bill via NFC or i2c to make sure that the contract
backing the bill is valid (and the correct amount, etc.)? And that I would
have to do the same for all the bills I get back as change? As a completely
trustless transaction, this seems like it could be entirely too slow for most
applications, without some kind of device to quickly verify multiple bills.

~~~
ccamrobertson
Ideally you should check every Kong note. In reality behavior would probably
be similar how bills are verified now; businesses regularly check $100 and $50
notes under backlights and with special pens but don't worry about lower
denominations.

A dedicated "Kong scanner" could do this very quickly.

------
Animats
From the "white paper":

 _" An additional 7,340,032 Kong was issued to the Kong project for
discretionary Kong noteprinting and distribution. The upper bound for Kong
token created after five years (the point at which only the recurring lockdrop
rewards remain) is roughly 72,700,000 Kong."_

So, the promoters of this skimmed off 10% before launch. Or, more like 20% of
the first year's production.

Now, if this was set up so that it's denominated in something they don't
control, like Etherium or Bitcoin or dollars or euros or yuan, it would be
more interesting.

~~~
ccamrobertson
That's not quite fair; at launch 20% of Ethereum went to the foundation. A
massive amount of Bitcoin it still held in the wallets of its creator(s).

If Kong develops a market of its own (???) then having some token for the
project to fund the very real costs of making more Kong is helpful.

------
Jaxkr
Have you considered how this will fare in the current regulatory environment?
European countries banned Libra because they didn't want it to compete with
the Euro and the U.S. showed hostility to pre-crypto complementary currencies.

Have you considered licensing the tech to governments to make counterfeit-
proof bills?

~~~
biolurker1
You mean they would treat it as illegal goods and confiscate it at border? How
would they ban this

~~~
saxonww
However they want?

Some people might not remember the Liberty Dollar[0] from 10-20 years ago. The
depository was raided after a few years, the company issuing the currency was
shut down, and the owner/proprietor was convicted of illegally minting coins.
Kong couldn't be shut down the exact same way - these aren't coins - but I'd
be shocked if a similar thing didn't happen were Kong to become as popular as
ALD (which, come on, it won't).

[0]:
[https://en.wikipedia.org/wiki/Liberty_dollar_(private_curren...](https://en.wikipedia.org/wiki/Liberty_dollar_\(private_currency\))

~~~
sah2ed
Exactly. I’m surprised that this point about the legal ramifications isn’t
higher up in the thread.

Things get complicated real fast once you move from peddling virtual to
physical currencies. I fail to see how the US wont use the same laws to shut
them down the way they did to the liberty dollar.

~~~
__m
Put Trump’s face on it, call it Trump instead of King Kong, get rid off the
laws. Profit.

------
neiman
I understand many people here, and in the world, don't like cash anymore. But
there are many others, like me, that still think that physical money gives
them a better feeling of their spending. So in my eyes Kong is a really nice
take on the cash technology, not to mention it's beautifully executed.

~~~
cortesoft
So why not just use regular cash?

~~~
newguy1234
Because "regular cash" requires trust and that trust has been routinely
violated by various governments of the world so I would rather have trustless
currency instead.

I trust math, science and verified algorithms rather than people or
governments.

~~~
cortesoft
No amount of math, science, and verified algorithms are going to make someone
else value your digital currency... you are still having to trust other people
to maintain a somewhat stable value of the asset.

Since this is always going to be true, I am probably going to go with the best
bets based on track record... I will use the currencies that have held pretty
consistent value over the last 100 years.

------
akersten
So once the time lock or whatever expires, I'm free to extract the value from
my Kong and then go double-spend the physical bills in a corner store? In the
hypothetical world where people use this, how are they expected to validate
every note they receive?

Is there an equivalent to a starch pen like a suspicious cashier might use on
a $100 bill today? Or is the process more painful? Does it require the
internet? Remembering that many cash transactions happen person-to-person, in
places with low or inconvenient connectivity.

~~~
paulgerhardt
The expiration mechanic is how Swiss Francs work and we believe a necessary
tradeoff for decentralized cash issuance to work.

Validation can be performed with any smartphone. Notes are issued in blocks so
technically if you downloaded the 2019 Kong Registry contract you would not
need connectivity to validate a note. Purpose built hardware can also be built
or existing android based POS systems updated to support kong-like validation.
Other anti-counterfeiting techniques have been explored but it the only thing
that really matters is securing the root of trust.

Technically with Swiss Francs, the notes have no value after their "expiration
date", with Kong the escrow contract unlocks and the token can be claimed off
the notes but the precedent made us comfortable enough with this tradeoff.

Alternative implementation 1) notes are not escrowed and funds can be claimed
off the bills immediately - this is effectively how paper wallets, java smart
card wallets, and trezors work. This is a gift card instrument not a cash
instrument.

Alternative implementation 2) funds are locked up into perpetuity - all tokens
are eventually lost to breakage.

Our back of the envelope expectancy was 10 years for these notes. We wanted
the majority to be reclaimable well before their anticipated breakage so we
set a claim date relatively soon in the future.

~~~
gamblor956
More importantly: you keep people trapped in your walled garden for several
years waiting until they can cash out.

------
toomim
> Kong is the first crypto-cash

No it's not.

\- [https://casascius.com/](https://casascius.com/)

\-
[https://en.bitcoin.it/wiki/Casascius_physical_bitcoins](https://en.bitcoin.it/wiki/Casascius_physical_bitcoins)

It looks like Kong _might_ be the first crypto-cash with an issuer that hasn't
seen its private keys. And that's cool, but it'd be good not to exaggerate
what this is.

~~~
toomim
Also, why not apply this to an existing coin, like Bitcoin, rather than
inventing _yet another_ freaking asset?

Oh yeah, because then the founders can't get rich in the ICO. Yuck.

~~~
paulgerhardt
There is no ICO. There is no token sale. Bitcoin script does not give us
enough operations to do the validation. Using the EVM was the next best
candidate. We're selling an extremely limited number of packs to validate the
concept and cover manufacturing costs. Section 4.1 of the paper goes into
details of why a purpose built token is more suitable than one designed for
other purposes[1].

[1]
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)

~~~
gamblor956
What you have described is literally an ICO...

------
the_gastropod
Poe's Law is a hell of a thing... Is this for real?

~~~
bduerst
I'm with you. The satire signals are so strong here.

------
ISL
After I buy a grilled cheese sandwich with Kong, how do I handle my taxes? It
makes every transaction have possible capital-gains tax implications.

The taxation difficulty is the single biggest reason why I stopped making
small transactions with Bitcoin. The paperwork, come April, was awful.

~~~
Twixes
It should be just like normal, non-blockchain backed currency, should it not?

~~~
nostromo
It’s more like selling stock to buy a sandwich.

If you bought the stock for $100, and now it’s worth $200, and you sell $10
worth to buy a sandwich, you have $5 of income to be reported.

~~~
Twixes
Would that be the case if you were to buy that sandwich with, say, euros
instead? They too could appreciate between purchases.

~~~
hanniabu
If you're in the US and pay with euros then yes it would technically be the
same.

~~~
iudqnolq
No. The issue is because cryptocurrencies aren't classified as currencies like
euros are by the IRS.

~~~
bananabreakfast
Still up for debate actually. IRS does consider them property but other
agencies consider it currency

~~~
iudqnolq
Future may be up for debate, current tax status isn't. And that's what matters
for what you have to pay right now.

------
EvanAnderson
I immediately thought of the currency "Kongbucks" from "Snow Crash". I was
hoping this was partially a tip-of-the-hat to Neal Stephenson.

~~~
paulgerhardt
Read section 4.3:
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)

------
russdpale
I fail to see how this solves a usability issue in developed nations. This
also reintroduces the portability problems that are present in current fiat.

~~~
ccamrobertson
Japan is a fairly cash heavy developed nation. Likewise, the majority
transactions under $25 in many countries are still conducted using cash. We
don't necessarily expect people to revert to using cash; rather, Kong is a
means of handling cryptocurrency that's vastly easier to understand as an
introduction to cryptocurrency.

The usability problems are also a feature -- if Kong is burned, stolen or
otherwise destroyed, the value is lost forever. Billions of people understand
that's how cash functions and they take measures to secure it.

------
account73466
In your paper, why you acknowledge people by their name but you don't disclose
your names?

------
Uptrenda
From the whitepaper: "Kong notes do not use a secure element that allows for
general programmability." Looks like they thought this through more than a
typical drive-by 'blockchain' project. With a limited secure circuit you'll be
able to call functions that generate ECDSA key pairs on the card but without
exposing an interface to retrieve the private key. Without this basic property
you would have to fully trust that the issuer had not mass-extracted private
keys (similar to how early privacy coins had a trusted setup phase.)

Looks like they're also trying to structure this as 'reward cost for key
extraction vs cost of mounting attacks' showing they have a plan in place for
attacks. I'd argue the notes still have a tx cost though because the only way
to know if a note has a valid private key is to challenge it with a unique,
large, random number - which takes time and effort. Users of the notes will
need an app for that and have to check every note against an on-chain 'smart
contract' before accepting them? NFC might make some of that easier but there
are still usability issues there.

~~~
paulgerhardt
The NFC challenge only takes a second and ATM like machines could probably go
much quicker than that. A broader goal with ARX is to bake bounties into
"licensing fees" (or accurately, manufacturing costs) for secure elements that
would validate keys couldn't actually be extracted.

Putting (very) public bounties at various reward tiers lets one establish
something like a demand curve but for security.

------
TekMol
If the private key is inside of the note and stays the same when it changes
hands, how do I know you did not make a copy of it when you created the note?

~~~
paulgerhardt
Another contributor here. This is one of the novel advancements made by Kong.

Specifically, Kong notes use a secure element which 1) self-generates a key
pair 2) can attest the key pair was self-generated and 3) does not leak the
private portion of that key pair. Section 2 of the paper (specifically 2.2)
goes into more detail[1].

[1]
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)

~~~
TekMol
So your answer is "trust us". Because how would I know if the claims of the
hardware manufacturer (you or your supplier) are true?

This of course holds true for all hardware. When someone creates or stores a
Bitcoin key on a laptop, they are at the mercy of the laptop manufacturer.

------
bransonf
Serious question: Who is going to accept Kong as a valid form of payment? What
incentive is there to accept Kong and what guarantees its value?

One of the biggest issues plaguing cryptocurrency as a transactional currency
is the volatility of decentralized assets.

What problem is Kong fixing? “We made a physical crypto asset” isn’t
connecting the dots for me.

------
brunt
I'm assuming this is unrelated to the Kong API Gateway
[https://konghq.com/kong/](https://konghq.com/kong/)

~~~
ccamrobertson
Yes, completely unrelated.

------
fatjokes
Why would drug cartels prefer this over existing cash?

I'm phrasing the question facetiously but the underlying intent is there: how
is there more anonymity, usability, etc.?

~~~
paulgerhardt
We're not interested in doing business with drug cartels.

What is a lovely property of Kong is the only digital breadcrumb is leaves is
when notes are loaded at creation and unloaded at de-circulation. Every person
to person transaction of the instrument leaves no digital record or footprint.
Usability is superior for new users - everyone understands how cash works.

~~~
seandougall
> Every person to person transaction of the instrument leaves no digital
> record or footprint

That's true of cash as well, but that doesn't mean it's totally untraceable,
as bills still have serial numbers. I think what GP is getting at is, Kong
notes must completely lack any sort of persistent unique identifier in order
to be an improvement over cash in anonymity. Can Kong make this claim?

------
onlyrealcuzzo
This seems like a step in the wrong direction. Given the option, most people
prefer not to use cash. Making me carry something around everywhere I go to be
able to use it -- I don't see myself being more inclined to use it.

Potentially more people will accept it. But I doubt it.

------
mNovak
So in theoretical use, is everyone expected to validate authenticity of each
note exchanged?

That seems painful for small transactions, but without it you lose absolutely
all the security benefits of crypto, right? (e.g. vulnerable to good old
fashioned counterfeiting)

~~~
undersuit
Just do it like we do it in the US, $50s and $100s get checked consistently
for counterfeits, $20s sometimes, $1s, $5s, and $10s never, and $2s are
automatically assumed to be fake.

~~~
vinniejames
Why are $2's assumed fake?

~~~
dragonwriter
They are so rarely encountered than many people don't think that they are a
denomination actually issued.

~~~
undersuit
Correct, they aren't issued by anyone but cool grandpas and uncles in my
experience.

~~~
gnaritas
You must not live in a state where pot is legal; in such places $2 bills
floating around everywhere, I use them all the time. The reason: cash
businesses use them heavily to reduce the amount of physical cash they need to
maintain and move around. Pot shops occupy a gray area legally and banks don't
like to deal with them so they often operate old school: cash businesses.

I have a few in my wallet most of the time, like to use them for tips when I
eat out.

------
pimlottc
Who is the audience for this product? The page is certainly not written for
the general public. Heck, I'm a developer and I don't really understand how
this works or why it's better than existing hard currency.

~~~
newguy1234
I think the audience is 3rd world countries that don't have reliable internet,
electricity and so on. They can use these paper notes instead of United States
dollars or their domestic currency which might be in hyperinflation.

------
rahuldottech
FYI: Your website is broken on the latest Firefox with uBlock Origin and
Privacy Badger.

The email 'request access' thing doesn't work

~~~
idigit
Odd - working for me on Firefox with those plugins. What error are you
getting?

------
nostromo
One of the best things about Bitcoin is that it’s _not_ physical.

If you want a physical currency that can’t be printed, use gold bullion.

~~~
ilaksh
Maybe silver? I mean even a tiny 1/10 oz gold coin is worth $140

~~~
asdf21
You also can't tell if gold is real or gold plated, etc.

~~~
newguy1234
You can but you have to use a scientific instrument called an xrf meter.

------
torgian
I’m very skeptical. While the idea is nice ( I love physical cash and use it
every day ) there isn’t much control over counterfeiting, etc. granted, this
is also true for Fiat, but there are more controls involved.

Make a currency exchanger that exchanges bits with a scan of your device,
instantaneously, and you’ll have my attention.

~~~
ccamrobertson
> there isn’t much control over counterfeiting, etc.

Correct, this is the primary challenge of creating sound cryptocurrency and
indeed why we go into length about the hardware we use in section 2 of the
paper.

> Make a currency exchanger that exchanges bits with a scan of your device,
> instantaneously, and you’ll have my attention.

Can you elaborate?

------
Akababa
The world is moving towards cashless/mobile payments (albeit with the U.S.
strangely behind), so why do you feel physical cryptocurrency is a step in the
right direction? Do you expect Kong to face greater challenges for adoption
(compared to other cryptocurrencies) since it needs a higher critical mass of
users?

~~~
withinboredom
You haven’t been to Germany lately? Most places only accept cash, your debit
card is plastic trash.

------
jasonlaramburu
Cool! What is the cost to produce each note today, and how do you anticipate
funding that longterm?

~~~
paulgerhardt
Just a bit more expensive than the higher end notes produced by
Switzerland/Australia and less expensive than limited edition postage stamps.

We looked at existing hardware wallets like trezor and ledger and realized we
could create something like this for 1/20th the price. Once we realized the
numbers we were playing with we ran with it. Conceptually, I prefer validating
something with a cryptographic signing operations rather than looking at some
watermarks.

Kong is a proof of concept but we could always print these for other
governments.

~~~
modeless
OK, but how much is that? I don't see the point in being vague about it.

~~~
weego
I'm sure it mentioned somewhere in the range of $3 per bill, but I can't find
it now.

It's utterly impossible to sustain, it's highly likely that the physical cost
could be higher than the face value

------
numlock86
These so called "currencies" that you can't actually use as a currency (read
as: pay or trade something for) are getting more and more. Has this become
some new form of trolling in the internet now?

------
skosch
Can you comment on the history of the name, printed as 港 on the bills? For
those unaware, the character means "harbour"; it's the _Kong_ in _Hong Kong_ –
is there any relationship to the HKD?

~~~
paulgerhardt
Context:
[https://news.ycombinator.com/item?id=21758004](https://news.ycombinator.com/item?id=21758004)

~~~
godot
I am not familiar with Snow Crash myself and I read the Wikipedia page [1] on
it and it makes sense what you're going for; but just want to say that for
someone who was born in HK, seeing the term 港幣 really can only mean HKD in my
head, and it's difficult for me to process that it means something else. Even
as you keep the name Kong, have you considered calling this something else in
Chinese aside from 港幣 specifically?

[1]
[https://en.wikipedia.org/wiki/Snow_Crash](https://en.wikipedia.org/wiki/Snow_Crash)

~~~
paulgerhardt
Would love to talk about this over email. Please drop me a line.

------
eat_veggies
Can a Kong manufacturer build custom secure element chips that leak key
material? It seems that a lot of Kong's security comes from the security of
the little HSM, and if you don't trust the manufacturer then a lot of it seems
to break down.

In addition, the paper cites the cost of decapping and side channel equipment
as part of what makes double spends impractical. Given that they're fixed
costs that undoubtedly many governments and labs already own, it still seems
like it could be worth it for some people to extract Kong keys.

~~~
ccamrobertson
> Can a Kong manufacturer build custom secure element chips that leak key
> material? It seems that a lot of Kong's security comes from the security of
> the little HSM, and if you don't trust the manufacturer then a lot of it
> seems to break down.

This is perhaps the most important question. In short, yes. We use an off the
shelf secure element; if it's shown to be broken/backdoored it will influence
a vast number of embedded and IoT applications.

> In addition, the paper cites the cost of decapping and side channel
> equipment as part of what makes double spends impractical. Given that
> they're fixed costs that undoubtedly many governments and labs already own,
> it still seems like it could be worth it for some people to extract Kong
> keys.

We cite fixed costs in hardware, but not in time. Certain extraction
techniques would still take hours of time per chip. The secure element we're
using has no published attacks thus far (which is not to of course imply that
it won't be, simply that it isn't trivial).

~~~
eat_veggies
> We use an off the shelf secure element; if it's shown to be
> broken/backdoored it will influence a vast number of embedded and IoT
> applications

The scenario I'm imagining is one in which someone manufactures a note that
looks and behaves exactly like a Kong but has known key material (i.e. a
"fake" secure element). You can't verify that the secure element is real
without expensive hardware.

And what is the vision for who can mint Kongs? If only the Kong developers
can, then it's no better than USD. If anyone can do it, how will you guarantee
consistent chips, construction, design, etc. between manufacturers?

~~~
ccamrobertson
> The scenario I'm imagining is one in which someone manufactures a note that
> looks and behaves exactly like a Kong but has known key material (i.e. a
> "fake" secure element). You can't verify that the secure element is real
> without expensive hardware.

Yes, that's counterfeiting in the case of Kong. The counterfeiter would need
to first extract that key material from a previously issued Kong note by
breaking the secure element.

> And what is the vision for who can mint Kongs? If only the Kong developers
> can, then it's no better than USD.

Only the Kong project for now; whether it's better or worse is definitely
subjective. There is a ceiling for the amount of Kong that can be issued.
Also, as something more akin to an art project than a fully functioning
economy, there is no place to spend Kong today. It's ambiguous, but the fact
that the Kong project is the only issuer of the physical notes doesn't
undermine the cryptocurrency rules upon which it's based.

> If anyone can do it, how will you guarantee consistent chips, construction,
> design, etc. between manufacturers?

Section 5.1 touches on this; in short there is no solution today, but this in
an immensely important challenge. Flipping this on its head -- if we don't
have these guarantees today, how can we trust any of the places we store key
material (smartphones, laptops, IoT). It's impossible to guarantee a perfect
chip, but it is feasible to create economic incentives that deter broken
chips. We'll probably write more on this topic in the future.

------
welder
So you can't backup Kong.cash? That's one main benefit of digital currency,
why go backwards towards physical cash? Instead you should go towards the
Wechat model of instant mobile payments.

~~~
paulgerhardt
We looked at various financial instruments and saw that cryptocurrency space
lacked a cash instrument. We realized with our background we could create one.

Cash is the dominant form of consumer payments (77% world wide!) and the move
to ban cash in various places disproportionately affects the underserved and
marginalized members of society - ostensibly the audience cryptocurrency is
trying to serve first. This is an effort to meet others with terms and
technology they are comfortable and familiar with.

------
etxm
I’ll tell you what, it looks really awesome. Kudos to the designers.

------
stanislavb
I'm curious, have you tried passing an airport border security with several of
these notes, and have you been asked what they are :)? Do you have to declare
them?

~~~
ccamrobertson
Yes, they look like a bunch of circuit boards under X-Ray, it's pretty cool.
We've travelled with "unloaded" Kong thus far (i.e. not backed by token). See
section 4.1 on minting in the paper.

Even so, we're unaware of any value to the Kong token independent from Kong
notes and we are not taking steps to list it on exchanges. If Kong was to
become a means of exchange somewhere then it might need to be declared as a
monetary instrument depending on the jurisdiction.

~~~
hadlock
How do they hold up in a saltwater environment? My feitan/yubikey U2F physical
tokens are developing rust/corrosion just being on my keychain and being
thrown in a drawer on my boat for a couple hours at a time. I2C leads +
saltwater environment seems like it may cause some problems.

~~~
ccamrobertson
I doubt this version would hold up well in a salt water environment. The chips
will ultimately have a conformal coating leaving only gold contacts which
should fare better.

We have considered more robust variants that would fully seal all the
components, but this is a v2 problem.

I should add that even a corroded chip should ultimately still be accessible;
you might have to pull it off of the bill and decap it.

~~~
sgarman
Do v1 people just not get to redeem their value in x years since they become
unreadable?

~~~
ccamrobertson
The secure element chip is pretty robust on its own. Even if most of the bill
is destroyed, it will be possible to communicate with the chip in most cases.

------
GordonS
So, I'm Scottish, and _still_ often have problems in London (and indeed
abroad!) when I hand over a Scottish bank note. Scotland and England are of
course both part of the UK, and while, yes, _technically_ Scottish bank notes
are not legal tender, they have been defacto legal tender since forever.

How do you plan to tackle this mentality, where there is such hostility to
anything in the _slightest_ bit unusual?

~~~
paulgerhardt
Embrace it?

Less cheekily, I think Kong like instruments when properly adapted could
capture the best parts of local currencies (like the Bristol Pound), the messy
parts of multi-governmental currencies (like the Scottish Pound), and the nice
bits of computer validation.

In your example specifically, the Royal Bank of Scotland can still mint
Scottish Pounds but back them on chain by UK pounds.

I'm of course hand-waiving the problems here - we've made a programmable
monetary instrument. One can program things well or badly to support this kind
of interoperability.

~~~
GordonS
Ach, while I might agree with some of your sentiment, I can't help but feel
it's unrealistic; yet I accept that attitude is part of the problem.

------
drudu
I hate crypto currency and I love this. It's a way to project all the insanely
bad parts of crypto (if you hold it you own it) into the physical world. If
general btc/eth transactions are a very very complex version of SWIFT this is
the same for paper money. I can buy coke with my bitcoins but I can't do a
cool in person coke buy with bitcoins(and/or ETH). Kong solves my problem.

~~~
zelly
> I can't do a cool in person coke buy with bitcoins

Why not? Each of you can have Bitcoin wallets on your phones. I'm sure coke
heads can figure out something to talk about for 10 minutes waiting for 1
confirmation.

~~~
drudu
The operative word was "cool".

------
rkagerer
Could you elaborate a little on how this is different or better than past
projects like BitBills?

Also what do you mean by "after a period of several years"?

~~~
paulgerhardt
For lack of an epistemological framework, we can call Kong a 4th generation
wallet. If you'll bear with me:

Paper Wallet were 1st gen - one couldn't guarantee the person giving you a
paper wallet didn't have two copies or kept a copy of the private key for
themselves. Probably ok for personal use assuming you trust your printer
firmware.

Hardware Wallets were 2nd gen - seed phrases made recovering from device loss
nice but again, seed phrases were designed to be exported and cant be used as
cash. They are very useful for other applications.

Java smart cards were 3rd gen - meant to be used as pre-paid gift cards but
again these were designed for banks who wanted to handle the key material in
software and have dangerous APIs for doing such[1].

Kong - uses a specific kind of secure element which allows for key generation
but not extraction. On chain contracts convert the R1 keys used by the chip to
K1 used by most cryptocurrencies today.

The paper goes in depth on this in section 2.3 [2]

[1]
[https://docs.oracle.com/javacard/3.0.5/api/javacard/security...](https://docs.oracle.com/javacard/3.0.5/api/javacard/security/DSAPrivateKey.html)

[2]
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)

~~~
userbinator
_Kong - uses a specific kind of secure element which allows for key generation
but not extraction_

In other words, just like almost every other smartcard (including EMV).

~~~
paulgerhardt
See section 2.2 in the whitepaper [1]. There is not an industry specific term
that succinctly captures these requirements. Secure element isn't ideal but
it's not an HSM or TPM. PUF's are a feature not a chip category. If it's
programmable, we don't want to touch it. That goes for most smart cards / java
cards. EMV cards specifically have 'get private key' API's which would not
work for this application.

[1]
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)

------
cryptocoder
Adding ‘secure’ to the name of some chip (“‘secure’ element”) does not
automatically make it secure through magical or other means.

~~~
ccamrobertson
Correct. It's an industry term for a class of chips.

------
tossAfterUsing
Kong seems worthless to me. ETH has demonstrated it's not a reliable store of
value, if the DAO hack can just be reversed.

Instead of garbage paper tokens, here's a thing that already exists:

... can be used just like cash

... isn't limited to a particular denomination

... value can be added at any time

... fits in your butt

[https://opendime.com/](https://opendime.com/)

~~~
ududhdhd
That thing obviously cannot be used just like cash. Jesus how fucking dumb are
you people

~~~
thanatos_dem
I downvoted you for this despite agreeing with you.

Since you have a brand new username, I’m going to give you the benefit of the
doubt and assume that you’re just new here and not intentionally trolling, and
explain why.

This community values neutral statements of fact, not vulgarities or arguments
of passion. As such, while your opinion may have merit, your presentation of
it is unlikely to get you far here.

Hope that helps you thrive in this community going forward.

\- than

------
sandGorgon
Monero has the concept of private view key and spend key. The view key only
lets you check balance without loss of privacy.

View keys can be printed as a mnemonic seed (a set of meaningless English
words).

Would printing of view keys mnemonic not be equivalent to this? With the added
advantage that printing is not centralized?

~~~
ccamrobertson
I don't know enough about Monero's construction; wouldn't this be trivial to
counterfeit? Can you use this key to ultimately transfer the funds?

~~~
sandGorgon
no - the view key does not let you do any transactions. It only lets you
verify the balances. It also does so in a privacy-preserving manner.

this is full text of a View Key

 _A keypair specific to Monero. The public part of it makes up the 2nd half of
monero address, and is used by the sender to generate a one-time stealth
address to where the funds are actually sent. The owner of the wallet uses the
private view key to scan the blockchain and find the funds sent to his
address. At the protocol level, the sender performs an encryption with the
recipient 's public view key, and the recipient attempts to decrypt all the
outputs on the blockchain to find the one belonging to him (where decryption
was successful). For audit purposes, it could be shared with the auditor,
along with the signed key images to prove the balance of a wallet. Sharing
only the view key would enable the auditor only to see received transactions,
but he wouldn't be able to tell if any funds were spent, so he couldn't know
the actual balance._

In the trivial case that each kong is a wallet - a view key would actually
show the balance.

------
foobar_
Unless this is going to transfer ethercoins, this is a SCAM. They are trying
to build a bank on top of smartcoins. The functionality seems like that of a
promissory note. As they keep the kong coins in their kong bang ... they will
try to make money using the volatility or something.

~~~
paulgerhardt
The functionality is basically exactly like a promissory note. A big
difference is every note stores its face value token in its own smart
contract. The only thing which can claim the funds stored in that contract is
the key self-generated on the secure element. You can manually validate that
key was self-generated (and not say programmed on there by the manufacturer).
The paper [1] details all this. You can go and make your own using the code
we've released on etherscan and github[2].

It is completely unlike other things that have come before because it only
stores keys on the secure element and only stores code in the EVM.

We're putting this out there as proof of concept. We're selling a limited
number as validation of the idea and because we believe in shipping product in
a space notorious for shipping vaporware. There is no ICO. It is technology
demonstration first and foremost.

[1]
[https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...](https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5KsGuWBXAX)

[2] [https://github.com/kong-org/defi_hackathon](https://github.com/kong-
org/defi_hackathon)

------
Aeolun
I honestly don’t care about the whole crypto part of this. I just see someone
selling funky banknotes and I’m going to hold onto them in the vain hope that
I’ll someday run into someone that’s done the same thing.

------
wesleyfsmith
If someone could pull this idea off--or a similar idea around physical cash it
could be a huge boon in countries like Venezuela that are primarily cash based
still but the local currency is very weak.

~~~
notahacker
Or they could use dollar bills, which unlike Kong, are redeemable for goods
and services because hundreds of millions of people want them to pay bills,
debts and taxes.

------
drudu
All the downsides of cryptocurrency and paper money rolled into a banknote
that can be break. Imagine if a large bill could become worthless since a
little chip inside got hit by a stray cosmic ray.

------
oarabbus_
My personal sentiment is one of the most powerful use-cases for crypto is
transmitting money to people across the globe within (minutes/hours). It seems
this physical crypto lacks that feature.

------
Shengbo
I like the idea of fancy cyberpunk cash but I feel like in the real world I'd
be getting the worst of both worlds if I tried to use cash thats also a
cryptocurrency.

------
fiatjaf
This is just a fancy [https://opendime.com/](https://opendime.com/) with its
own shitcoin instead of Bitcoin.

------
sansnomme
Governments do not like this. See: Liberty Dollar

------
spir
Have you guys considered decoupling your physical cash technology from the
underlying token?

Physical DAI or ETH would be most excellent.

~~~
ccamrobertson
Yes; DAI is a bit of an odd one since it's largely just a more expensive
dollar bill, but there definitely some cases where this could be interesting.
ETH would easily work too.

------
hypewatch
“Physical Cryptocurrency” sounds a lot like a “physical social network” to me.
Isn’t this effectively cash?

------
dtemkin
Not sure if this is a common problem but their contact link just dumps you to
the gmail 'about' page.

~~~
idigit
It's a "mailto" link, so it just opens up your default email app.

------
WikipediasBad
This is a fantastic project and great idea! One thing, I believe there are 2
hurdles to adoption: Kong - the unit of account/currency and Kong - the paper
money. Don't you think you're trying to do 2 things at once? Why not try this
unique technology with Dai or Tether which has a lot of traction? In fact, I
would LOVE to have Dai bills.

~~~
paulgerhardt
We've discussed this. It was a bit lower risk to validate the hardware works
with a new token than the additional complexity of Dai. A lot of other
challenges there too but we're a small team.

~~~
WikipediasBad
Sounds fair. I really like the technology though and think you guys have the
most unique take on paper crypto so if the actual token itself becomes a
barrier to adoption due to volatility/stability (which is a leading reason why
stablecoins are all the rage right now - as I'm sure you guys are aware), you
guys can license out the tech or produce bills for Tether, Dai, USDC, and
other high traction stablecoins. Our small stablecoin team (releasing product
Q1) would be interested ourselves if we were to ever get into the 9 figure
market cap range.

------
seibelj
A really cool experiment that made me think. Thanks for making this, very
cool!

------
dmitrygr
This seems like a _VERY_ cool technical solution in a desperate and fruitless
search of a problem.

> _They consist of a flexible circuit board, specialized secure element chips
> and an independent NFC interface capable of powering the secure element.
> Each secure element stores an internally-generated ECDSA key pair that is
> associated with a unique smart contract on the Ethereum blockchain_

Who wants bills that cost $3 ea, and are not likely to survive a wash?

> _flexible circuit board_

FPC != "meant to be constantly flexed". Most are not designed for a certain
(not small) bend radius and to be bent no more than a dozen times. They are
more meant to be curved once into a particular shape than to be constantly
bent.

> _I2C, raspberry pi connector_

That will do great with dry pockets and ESD

> _raspberry pi connector_

tiny holes, so your notes can catch on your keys and any other thin sharp
object in your pocket

~~~
ebg13
> _Who wants bills that ... are not likely to survive a wash?_

Americans are already used to this.

~~~
dmitrygr
I have washed $20 bills in my washing machine (by accident) a number of times
with no ill effect

------
lazzlazzlazz
Is Kong stabilized/a stablecoin or is it a commodity-style asset?

~~~
ccamrobertson
No, there is nothing backing the Kong token. See section 4 in the paper for
more of a discussion on the token issuance.

We considered various stablecoin constructions, but most of them effectively
pin to fiat which (1) seems to defeat the original intent of cryptocurrencies
(i.e. think back to 2009) as not subject to the whims of central banks and (2)
seems to just duplicate fiat currencies in a more expensive format.

Likewise we are doubtful that most folks holding BTC/ETH/etc. would actually
be willing to spend it on something, vs. just continue to hodl in a cooler
format.

~~~
lazzlazzlazz
You mentioned two stablecoin methods, but not the interesting and somewhat
successful MakerDAO approach. What do you think about that?

------
jcoffland
What's to stop someone from passing many duplicate notes?

------
lockit
How does this work? Is the first 2,500 part of your own ICO?

~~~
ccamrobertson
There is no ICO.

We're selling packs of Kong in a limited fashion to cover the costs of
manufacturing the hardware. We have a limited number of units available so
we're slowly opening up sales to our mailing list.

Take a look at sections 4.2 and 4.3 of the paper for information on our
lockdrop; this is the only other way to get Kong token. Lockdrops are a novel
means of distributing token based on opportunity cost rather than selling the
token.

~~~
luminiferous
Just to clarify, that means that I would need to 1.) purchase some packs of
Kong, which are unloaded, and then 2.) participate in a lockdrop to gain the
tokens with which to load the Kong? Seems fine and dandy wrt the acquisition
of bills, but how will adoption by vendors happen?

------
jangid
Counterfeiting will be difficult. That's for sure.

------
advisedwang
Does this mean someone needs to verify every banknote handed over to them? If
not, what's to stop me giving people unloaded notes and them assuming they
have face-value?

~~~
paulgerhardt
The imagined usability is like cash. Low denominations notes are glanced at to
sure they're intact, high denomination notes are scrutinized more closely. The
difference is one can validate these notes with a cryptographic operation
rather than a highlighter.

~~~
jiofih
Online validation dissolves you’re anonymity value proposition instantly.

Bank notes are recognized as a financial instrument by the government, and
have the accompanying legal repercussions to counterfeiting. I expect no such
strictness being applied to a private digital token, what exactly de-
incentivized someone from going crazy counterfeiting notes? Especially
considering their transactions would be anonymous too?

~~~
ccamrobertson
You could cache a list of existing notes directly from an Ethereum node for
offline verification; this cached information would work for verification
until the claim date in the smart contract.

Correct, there is no secret service that will remove counterfeit Kong which is
why you should verify it yourself or only accept it from parties you trust and
have attested to previously verifying it. Habits around verification would
likely be governed by the prevalence of counterfeits in a local money supply.
If I hear about a bunch of 1 Kong notes failing to verify as counterfeit, then
I'll likely verify every 1 Kong note before acceptance.

------
Twixes
I don't believe this will ever gain traction without a government to back you
but I've got to say, the design of these notes is amazing.

------
kristianc
So physical Kong notes collateralized by ... digital Kong tokens? Don’t see
how that could possibly go wrong. It’s Kong tokens all the way down.

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mc3
Kong? I'll stick to Dong, thanks.

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dav43
I should start a currency too

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wiggler00m
Who is behind this project?

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sabujp
these are basically like debit cards with fixed cash on them

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jitl
Still too confusimg.

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smashah
Vaporcash

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arcticbull
You can actually obtain something like this by going to your bank and asking
for a roll of quarters.

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myrloc
Why limit the bill faces to Western philosophers? Seems like a more
international approach is appropriate for both end-user adoption and the
crypto space in general. Edit: or are they all Greek gods?

