Site icon A Crypto Miner's Journey

It’s Time for OpenDime™!

TotalBuzzKit

I am filing this OpenDime review under the ‘Bitcoin Wallet Reviews’ even though it is not a wallet but something entirely different.

The easiest way to ELI5 OpenDime is to describe it as a piggy bank — you put as much money inside as you want but the only way to get that money is to destroy the container. The more concise and elegant description is that OpenDime makes Bitcoin a bearer instrument1A bearer instrument, or bearer bond, is a type of fixed-income security in which no ownership information is recorded and the security is issued in physical form to the purchaser. The holder is presumed to be the owner, and whoever is in possession of the physical bond is entitled to the coupon payments. Definition from Investopedia.com.

This post is also not quite so much a review — the OpenDime is very easy to use and if you know how to copy files to a USB stick you are fine — but rather an attempt to make readers understand why is it important to know about OpenDime and become thoroughly familiar with its features. There are some things that may bite the user on the ass if they’re not careful.

If you have any interest in transacting with Bitcoin, the chances are you will come across an OpenDime within the next 2-5 years. You will be asked to accept payment with OpenDime, or make a payment using an OpenDime. The way OpenDime works with Bitcoin is explained in the paragraphs that follow; also there are some caveats you must be aware of.  If you have anything but passing interest in using Bitcoin, you simply must know what OpenDime is, how to use it and how to avoid basic pitfalls.

OpenDime v3 compared with EU coins
The OpenDime is tiny

The OpenDime offers solutions to two of Bitcoin’s greatest problems: transaction anonymity and lack of access (or high cost of access) to the ledger. It also offers a hedge against multiple future eventualities when Bitcoin usage might be frowned upon, silently discouraged or even officially forbidden even in the ‘civilized’ world. All of these are taken care of due to one fundamental property of Bitcoin: whoever controls the private key, owns the Bitcoin sent to a matching address.

Unlike modern Bitcoin wallets, which can generate new addresses for every transaction, an OpenDime can only generate a single private key and therefore have a single Bitcoin address throughout its lifetime. Experienced users will know that address reuse significantly decreases privacy; however this can be less of an issue for OpenDime, because you can transact with it without ever spending the coins it carries. Still, most users will probably send a certain amount of bitcoins to different OpenDime sticks and transact like that. It makes sense to have a stack of OpenDimes holding 0.5BTC, 0.2BTC, 0.1BTC, etc.

A 3-pack of the current version 3 of the OpenDime costs $40 plus shipping. A 3-pack of the recently announced and still unavailable version 4 costs around $45, plus shipping. For simplicity, let us assume the cost of a simple OpenDime is $15. Is that cheap or expensive? Of course this is up to each user to decide, but I think the price is more than reasonable. In the end of 2017, transaction fees reached almost $40; by that measure alone, the OpenDime is 3× underpriced, with the extra advantages it offers over on-chain transaction tacked in for free.

OK… let’s see what these extra advantages are, shall we?

OpenDime Use Cases

Improve Privacy: First and foremost, the OpenDime reinforces the value proposal of Bitcoin (censorship free money) by adding the ability to transact truly anonymously in person or over distance, without leaving a digital footprint — just like plain old cash. In a future where the governments may frown upon Bitcoin use or even actively try to discourage it, the ability to transact off the record will become even more important.

Save Fees: an OpenDime can change hands many times without having to pay mining fees.

Save Time: each OpenDime transaction is almost instant. No need to wait for X confirmations. Plug the stick, confirm sealed status, check value, and boom! you’re done. Battery-powered Arduino-based OD verifiers like this one already exist:

Your mobile wallet (Samourai) will recognize it, too. You have many options!

Use as Collateral: talk details with your local loan shark (just kidding).

Give away to children to use as real piggy bank and teach them important life lessons: You will instill the notion to be responsible with their own money; you will demonstrate the value of anonymity, and you will be able to show them the value of low time preference — that last concept is impossible to do with fiat due to constant inflation!

How to Use OpenDime

The OpenDime has two leds — one green, one red. The way they light or blink shows different states of the device:

  • A blank, non-initialized OpenDime will have the green LED permanently lit and the LED led blinking occasionally
  • An initalized OpenDime will have the green LED blink and the red LED off (public address visible, funds not spendable, you may accept the device as payment)
  • An unsealed OpenDime will flash both the green and red LEDs sequentially (private key revealed, funds spendable, you should not accept the device as payment; move funds to a different wallet ASAP)

Every OpenDime leaves the factory in a blank state. Before you can use it, you have to generate the private key; and to do that, you need to plug the device to a computer and put 256kb of data on it. You can drag & drop any file(s) you want — they will not be stored on the device. For maximum entropy, use private photos you have made yourself and shared with nobody — a dick pic or a shot of your naked GF will do just fine, you filthy pervert. Once you have provided enough random data, the device generates a private key, shows the matching address and goes catatonic (i.e. stays in read-only mode until unsealed).

In order to reveal the private key, you have to punch a hole through a special opening of the device. This will break some circuits within the PCB and knock off a 10k resistor on the other side. This will cause an irreversible internal change in the state of the device; the private key will appear in WIP format inside a .txt file, and the built-in web page will change to show it as well. Do not throw away unsealed devices though — you never know when you or somebody else will send some bitcoins to the address of the unsealed OpenDime.

What (Not) To Do with the Money On It

Be careful how you fund the device. As explained above, the OpenDime is less vulnerable to deanonymization even if it receives multiple transactions. The idea is that these funds will not move further as people will transact with the OpenDime off-line. However you should still exercise extreme caution. Preferably, use a coin mixer before loading coins onto the device.

One of the dumbest things you could do is buy bitcoins on a KYC/AML exchange like Coinbase or Kraken and withdraw them directly to your OpenDime. Please, please do not do that. In five years, when the feds find that stick in some dead drug lord’s house, you will have to explain really hard that you have nothing to do with it and don’t know the guy.

The above is doubly valid in reverse: you should never remit the funds from an unsealed OpenDime directly to an exchange that knows your name and address, and keeps a copy of your ID. Assume that somewhere along the path, some government agent found the device at a crime scene, viewed it, recorded the serial no., copied the Bitcoin address and wrote a script to warn her when the coins move from that address.

Ideally, you should never have to sell the bitcoins on an OpenDime; just keep using it to pay for something else. If not possible, then exchange it for cash only. Be as paranoid as you can be, and then some. You may be a pillar of your community and a shining paragon of law abidance but there are some dirty people probably using OpenDimes for nasty stuff right now. The government will not make any difference between you and them.

Different Ways To Lose Your Bitcoin with OpenDime

The design of the OpenDime is a product of its function: a replacement for cash. This means that some aspects of it can potentially cause you to lose bitcoins. Here’s a list of things you should be aware:

You can’t protect your funds from theft or confiscation. The OpenDime doesn’t allow you to encode the seed with a BIP39 passphrase, because that obliterates its main use case — freely exchangeable cash. You don’t password-protect your $100 bills — and neither can OpenDime do it with your bitcoins.

It is not possible to back up the device. This is understandable considering the nature of the product, but is worth repeating anyway, because some people will invariably compare the OpenDime to a Bitcoin wallet which has these things.

Loss of device means loss of funds, period. People can steal your OpenDime. They can take it away from you by force.

Long-term storage viability is unknown. Although the life of the OpenDime components is estimated to be between 25 and 100 years, we obviously can’t know for sure. You may lose the funds to radiation, ESD, or just accidental bit rot.

The OpenDime is not physically durable. The device itself can be easily crushed or broken. It is not waterproof or rust proof, unless you keep it packed in a sealed container (which I think is a reasonable thing to do). But even then, it is not fire resistant, and survival in a house fire even if locked inside a safe is questionable. It is not like there is a seed phrase that you can etch with bits and hammer on a steel or titanium plate.

You can’t tell different OpenDimes apart! Unless you figure out how to mark them permanently, you should be extremely careful when you handle sticks that hold different BTC denominations. Perhaps the best idea is to store the same amount of bitcoins on each stick you have, but then again somebody else can pay you with an OpenDime that holds a different amount. So you just have to be careful and check/re-check every stick before transacting.

In Conclusion

The more observant among you have noticed that I’ve spent probably about 3 times as many words talking about various deficiencies of the OpenDime than I did harping its advantages. Does this mean I don’t like the device? Goodness, no! It is an awesome contribution to the Bitcoin ecosystem and a very useful tool to have at your disposal — for the right job!

The reason I talked so much about negatives is because at this point most people — myself included — are relatively comfortable with the safety of our funds, and we might be getting a bit reckless. It is important to understand the inherent limitations of an OpenDime; limitations necessitated by its purpose, not imposed upon it due to design compromise.

Predicting the Future

Imagine a future where Bitcoin is the single currency in the whole world. Powerful collectives run by ruthless Bitcoin millionaires vie for power; competitors put the blockchain under constant attacks. In such a future, old transactions — buried under hundreds of thousands of confirmations — will have much higher value than ‘fresh’ coins whose ownership can easily change during a 1000-block reorg funded by a vicious gangster. The OpenDime credstick is the answer for that unhappy future… and for many others, much more viable eventualities.

Keeping a small amount of Bitcoin on one or several credit sticks is a cheap way to make sure you’ll be able to spend no matter what. Be ready and get yourself some OpenDimes!

Exit mobile version