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Increased security

The Bitcoin Cheques will improved anonymity, privacy and security

Increased anonymity

It has been said that Bitcoin gives the user anonymity, but that is not so true. If you know my Bitcoin wallet address you can easily look up my balance at block chain. You can even figure out my transaction. I don’t like everybody to be able to do that. It is possible to hide my transactions by spreading it on many addresses, but I think that is not a perfect solution as it adds a lot of unnecessary transactions and possible additional costs.

By using a Bitcoin Cheque, the Bitcoins will be transferred from the Bitcoin Bank’s wallet rather from my personal wallet. In fact, the bank need only one big wallet to hold all its deposits and can keep track of the individual user’s amount in accounting sheets. All users funding, withdraws and payments can be done using this wallet. This way it will be impossible to read from the block-chain which transactions belongs who.

Increased privacy

When making a purchase using this system, the web shop does not need to know my identity. Only the Bitcoin Bank may need to know my identity. The Bitcoin Cheque don’t need to hold my name in order for the receiver to collect the money.

The Bitcoin Cheque could include a user id number of me, so if I want to make a seconds purchase the merchant know I’m a returning customer. But this should be a configurable options, so if I don’t like it, I can be a completely new anonymous customer each time. The user id number should also be different when trading to other merchants, so they cannot know I am the same person. The user ids used at the different merchants will be kept track of by my bank.

Such a system will provide much better privacy compared to credit-cards. Using today’s credit cards all over the Internet, my name and credit card number are spread to a lots of servers around the world. I have absolute no guarantees this information cannot be misused or stolen.

Safe storage of Bitcoins

Since all my Bitcoins can be stored in a bank, and not in my personal wallet located in my computer, this will reduce the danger from somebody hacking my computer and stealing my wallet. Having Bitcoins collected in banks will also reduce the risk of Bitcoins getting lost due to loss of private keys or other human errors. Most people have limited technical skills and securing a computer can for these be a real challenge. For most people it will be a better solution to store their Bitcoins safely in a bank.

Off course, when storing your bitcoins in a bank, you need to trust the bank will not steal it. But in most country this is seldom a problem, as a country’s laws and regulations takes care of that.