A prototype cryptocurrency point-of-sales (POS) terminal called Bitcoin Box can process transactions without the need for an Internet connection. Instead it relies on Near Field Communications (NFC) and Bluetooth to enable payments.

The device has been developed by Hive developer Jan Vornberger, who said the customer simply needs to touch their smartphone on the device and it completes the transaction via Bluetooth.

Bitcoin Box relies on off-the-shelf components to create a payment flow and was inspired by Apple Pay, he added.

Although Vornberger is relatively new to bitcoin hardware, he honed his skills working on a number of bitcoin software projects, including Hive Wallet, Instawallet and Bridgewalker. He is currently working on the Hive Android client.

Wallet-to-server transactions

Vornberger describes the Bitcoin Box as the first tailored bitcoin POS solution that combines NFC and Bluetooth to enable offline payments. The basic concept is similar to Andy Schroder’s Bitcoin Fluid Dispenser.

Vornberger explained the benefits of offline bitcoin transactions:

“So far, most bitcoin POS solutions rely on simply having the customer broadcast the bitcoin transaction over the bitcoin network. This can be unreliable, as sometimes the shop system does not see the transaction immediately, resulting in delays.”

However, using the BIP70 bitcoin payment protocol, the customer’s wallet can directly transmit the transaction to the merchant’s server.

BIP70 is currently supported by leading bitcoin payment processors BitPay and Coinbase, but Vornberger points out that those companies’ implementations still require the customer to have an Internet connection.

“In many store locations, customer connectivity can be spotty. The Bitcoin Box therefore goes beyond BIP70 and allows the transmission of the bitcoin transaction not only over the Internet, but also via Bluetooth. This results in a very reliable payment process,” said Vornberger.

Bitcoin Box is compatible with all existing wallets and seamlessly upgrades to the improved BIP70 mechanism when available, he added.

No exotic hardware required

The Bitcoin Box is based on a Raspberry Pi board with a few extra off-the-shelf components and should be priced at $299 once it becomes available.

Vornberger indicated that the device is designed for low volume production, as the bitcoin merchant market is simply not big enough for custom hardware.

“There are very few hardware POS solutions for bitcoin. Coinkite‘s system is the only one that is commercially available at this point, as far as I know, but does not currently support NFC and is a good deal more expensive. XBTerminal had a hardware prototype at one point, but I don’t know what the status of that project is.”

Vornberger explained that he would like to see his web-free method spread to other POS platforms. The first step, he said, would be to standardise the more cutting-edge features, like offline payments, in collaboration with the bitcoin developer community.

“Some proposals exist, but one goal of the Bitcoin Box is also to shake out problems and arrive at a solid solution, which can then hopefully flow back to other POS solutions,” said Vornberger.

Industry best practices

Vornberger noted that most bitcoin POS solutions are software-only, usually developed for Android devices.

He outlined a number of pros and cons associated with this approach:

“This is smart, as Android phones are cheap and ubiquitous, but also tends to drift towards a lowest common denominator situation, which often means [utilising] QR codes of a bitcoin address and listening for unreliable broadcasts on the bitcoin network. NFC especially is a weak point, as those devices either do not have it or the antenna is in some inconvenient place for a checkout situation.”

NFC antennas on Android devices are usually located at the back of the device, or in the battery cover on certain smartphones. Apple’s iPhone 6 features its antenna at the top of the device, making it more practical for payments.

While this may seem like a small drawback, Vorbnerger argues that the “devil is in the detail” when it comes to user experience.

This is why he felt the best approach was to create a reference design which implements all the best practices and industry standards, which can then be put together and showcased as a demonstration of how fast, reliable and convenient bitcoin payments can be.

BitPay, with its good infrastructure and supports for multiple standards, is Vornberger’s payment processor of choice, he said, adding that he is still open to alternatives.

The plan is to focus on one payment processor for the launch, then consider adding support for additional processors at a later date.

The first store-ready products should ship within three to six months, Vornberger said, although that schedule might yet need to be extended.

So far, Vornberger has bootstrapped development of the Bitcoin Box with his own money, but he is currently looking for investment partners to bring the working proof-of-concept prototype to a production-ready state.

See the Bitcoin Box in action in Vornberger’s video below: