Buy crypto anonymously on the Incognito pDEX   

Gold - Incognito Debit Card

#31

I have fiddled with the Idea of creating crypto cash and using NFC, but it doesn’t seem easy. Security would be really hard. Your essentially just providing a paper wallet to someone and that wallet could be technically redeemed by anyone who manages to get the code. You need to make sure it’s tamper proof.

As for a crypto debit card system (no fiat involved) attached to your wallet, you don’t really need to store any value on it. Just a pointer to your wallet address so they can send a payment request. The app takes care of the actual transaction. No KYC needed if there is no transfer to USD.

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#32

I have read all the replies to this thread and I’m very interested to see what the team comes up with. I think it would be amazing to have a card that lets me spend my crypto anonymously and would be amazing for adoption.

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#33

I just had an idea. If/when we get a debit card however it may be, it would be a great addition to offer a percentage of “cryptoback” (similar to cashback) on purchases using the card. And you could offer higher percentages for holding more PRV like have tiers of benefits for holding PRV. Just had this idea and had to share it :sunglasses:

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#34

Thanks, @Brakley! Just for clarification, this debit card program isn’t something we are creating. It’s more of something we are thinking about joining, the Crypto.com white label card project. I believe Crypto.com would control the terms of the card and any types of rewards we would receive. Also, the card would require KYC, so it wouldn’t be anonymous.

@Revolve has some good ideas on creating something truly a bit more private, but that’s probably a longer-term project.

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#35

If it requires KYC and doesn’t offer anonymity then I wouldn’t even bother. This would totally negate the purpose of the platform and would only endanger incognito users. I would just develop incognito’s own card from the ground up.

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#36

I talked to @andrey about this, and he doesn’t see an issue with the KYC. Several users agree.

To be clear, the KYC wouldn’t apply to your Incognito account. Only the card would require KYC, and only if you opt in to use it.

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#37

Hello, could a prepaid card be viable? You know one you can purchase over the counter or online with cash or money order. And it already be loaded with some PRV. Could you also set it up the your incognito wallet could be used to reload it? I am not tech savvy just throwing that idea out to see if it could be viable.

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#38

I am curious if our offshoot Debt card would have to follow the same staking/rewards scheme? If it does, I will be unable to participate. The point at which the rewards begin to add up is at the 3% level. 3% back and bonuses of Spotify and Netflix covered (paid in MCO back) however you have to stake $2,775.00 at the current rate of MCO @ $5.55. then add whatever funds you intended to use. This is a dollar amount that currently is out of reach for such small rewards. Also, if I had the almost 3K I would be further ahead staking it in the Liquidity pool. Just a curiosity question and my potential concern.

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#39

Hi, I like your post and we share many concerns. My number one concern is the tax implication and consequences of what is considered a “taxable event” whenever cryptos are bought and sold. Any websites which require KYC are expected to provide (or have the potential to provide) these “transactions” to the IRS and this can create serious headache when tax time comes. As far as I know, and I can be wrong, some transactions using debit cards from Crypto.com may be subjected to being “taxable” and that’s why I have not been loading my card up and using it even though I have it. This also stopped me in my tracking to invest more of my money in cryptos in KYC places since I don’t really want to deal with the tax consequences.

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#40

If your worried about taxable events, I believe taking out a crypto backed loan is not considered a taxable event. Your able to pay back the loan with your crypto collateral as well. I believe some companies allow you to use this loan as a credit line.

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#41

Thanks for your response. Honestly, I am not at all familiar with how a crypto-backed loan works, and I don’t need a loan at this point but instead looking for an alternative investing universe besides the stock market. Perhaps you can educate me on that topic if you care to do it. My problem now is to figure out how to buy (invest) in cryptos (any types) with fiat money and use it (convert it back to fiat) in the future if and when they appreciate in value without triggering any tax events. Do you know any way how that can be done? Thanks in advance.

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#42

In the USA everything is a taxable event, also crypto-to-crypto, I’m from EU and here the situation is more permissive, especially in some countries where cryptocurrencies are still not well categorized. In this case the taxable event is only crypto to FIAT conversion and you are right, when spending with the card there is a taxable event.
If you request a crypto loan you can use the cash without paying taxes, but this is a loan so you have to return the capital paying the interests. For example some companies like Celsius don’t allow to pay the loan with the collateral itself, because this will be an exchange operation and it’s not their business. You can pay the loan but not with the collateral, so the exchange operation will be a taxable event for you (if the loan company doesn’t accept the payment with a currency that is different from the one you borrowed).
Also interests from staking, mining, etc are often taxable since they are an income…
It’s up to you to declare or not the things, obviously if you use a privacy coin or a privacy network like Incognito no one can track your operations and balances (and the crypto-crypto taxable events), but when you exit in the FIAT world you have only 2 options:

  • Exchange and pay taxes
  • FIAT Loan with crypto collateral

If you go to/from FIAT, you’ll have always “issues” like KYC/AML and taxes.
You could also exchange crypto P2P locally, but the premiums often are comparable to the taxes… If you don’t want to move to a different country, or do illegal things, there aren’t other options I think… Probably FIAT Loans with crypto collateral are the best option if you can expect gains from your trading operations.

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#43

Wow… I think you did a great job answering my question, even though I still do not understand it 100% because I am still a newbie in the crypto world. However, thank you very much. I will ask again when the time comes to do any of the things that you mentioned… :grinning:

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#44

Nexo.io - Allows you to get a crypto backed loan and pay with your collateral if you want. They don’t have a credit card available yet, but they have been promising one for a long time. I believe their APR 5.9%, I think they also recently introduced 10% interest on stablecoins.

In the U.S. crypto isn’t considered a currency, it’s considered property which brings it into a legal grey area. However currently they are trying to regulate it.
This means that you can get a loan backed by crypto for about half the value you collateralize. I believe stablecoins give you a higher percent then just half. On a lending platform like Nexo, your able to pay back the loan with your collateral, or with other crypto in your account. This is not considered a taxable event, because it is still a loan, but you do need KYC. You also don’t need any credit checks since the loan has it’s value collatoralized. I believe this works the same way with stocks. You don’t get taxed on the loan you get from putting up your stock for collateral (this is what rich business owners do) and technically you can pay back the loan by giving up the collateral.

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#45

Thank you for your insight. As always, much appreciated!!

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#46

@Gold look at this https://shop.tangem.com/

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#47

@andrey well blow me down! Unless I am mistaken, this does allow exactly what we want as far as security and management goes! So now we need the nitty gritty inner working details! Fantastic find!

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#48

I agree. Great find, @andrey! This makes the two-card idea–the cashless, and the cacheless–seem like more of a reality.

I’ll research the integration and see what we need to do.

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#49

A couple clauses in Tangem’s terms of use:

3.5 Producer does not keep records of Cardholder’s personal data, the amount of Blockchain Asset stored on the Card, the Private Key, or the history of Card usage.

Sounds like no KYC, as no fiat is involved. This fits perfectly into Incognito’s overall mission.

d) The Cardholder shall treat the Card in the same manner as physical money (cash) and keep it safe. If the Card is lost, stolen or destroyed, control over the corresponding Blockchain Asset will be permanently lost.

Card users must be very careful to ensure the safety of their cards. Losing it would be just like losing a wallet full of money.

Nevertheless, the cards are pretty hardy. They are supposedly waterproof and usable even encased in ice. Bet the cards melt easily enough though. :stuck_out_tongue_winking_eye:

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#50

I think the main thing to investigate is if the card uC can be compatible with the way Incognito is signing the transactions. I’m not a developer, but I remember the issues with XMR and Ledger, when they created the Ledger App (memory issues for examples)… Since the signing procedure is done inside the card, the uC of the card must have the needed integrated crypto primitives (AES, RSA…) and a sufficient amount of memory to sign the transaction successfully in a human time (seconds). The firmware of these cards can not be modified, so if a custom signing algo is needed, a new firmware must be developed, audited and certified in partnership with Tangem team. This could be potentially too expensive at this stage.
The specification of the Tangem card chip are:

  • Embedded EAL6+ SecurCore microchip from Samsung
  • Uses 3DES, AES, RSA, & ECC cryptography
  • Arm SecureCore SC000 Processor

The cited Samsung chip could be probably the S3D350A, that is the only one with integrated NFC at the moment… If a customized firmware is needed, these are the specifications about chip RAM and ROM

The first thing to do could be experiment with their development kit, they provide a general purpose card where you can choose the right signature algorithm: https://shop.tangem.com/products/tangem-developer-kit

At the moment, Tangem supports all major cryptocurrencies (BTC, ETH, XRP, BCH, LTC, BNB, EOS, XLM, TRX, ADA, XTZ, DUC, RBTC, MTX, XEM, DASH, NEO, ONT), smart-contract and trustline assets. This also includes non-fungible tokens.

If the signing procedure of Incognito is compatible with the above mentioned cryptocurrency, the cards can be used and is sufficient only the wallet integration using their SDK. If this is not the case, only Tangem can develop a new firmware with the required functionalities, the Firmware sources are not available to the community

Firmware

Smart-card technology dictates a “security through obscurity” approach. Disclosure of the source code within secure elements would render hardware wallets vulnerable. In order to prove that Tangem firmware has no backdoors or bugs that would lead to loss of funds, Tangem has employed a renowned independent security auditor, Kudelski Security. The results of the audit are here:

https://research.kudelskisecurity.com/2018/08/06/audit-of-tangems-smartcard-wallet-code/amp/

Independence

Tangem firmware works on a native microcontroller level and does not rely on non-transparent platforms, such as third-party implementations of JavaCard VM. There are also no mechanisms to remotely control or update the firmware after the card is manufactured.

Hope this helps to understand the next steps to do, if the team/community wants to leverage this solution. The Tangem card idea within the Incognito ecosystem is really great in my opinion, I like the idea of an hardware wallet that can be exchanged like banknotes. This could enable a new P2P way to exchange anonymous crypto assets.

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