How is Taler related to Bitcoin or Blockchains?
Taler does not require any Blockchain technology, and is also not based on proof-of-work or any other distributed consensus mechanism. Instead, Taler is based on blind signatures. However, it is theoretically possible to combine Taler with peer-to-peer crypto-currencies like Bitcoin.
It would be possible, however, to withdraw coins denominated in Bitcoin into a Taler wallet (with an appropriate exchange), which would give some benefits over plain Bitcoin, such as instant confirmation times.
Where is the balance in my wallet stored?
Your wallet stores digital coins and thus ultimately your computer holds your balance. The exchange keeps funds matching all unspent coins in a settlement account.
What if my wallet is lost?
Since the digital coins of value in your wallet are anonymized, the exchange can not assist you in recovering a lost or stolen wallet. Just like with a physical wallet for cash, you are responsible for keeping it safe.
The risk of losing a wallet can be mitigated by making backups or keeping the balance reasonably low.
What if my computer is hacked?
In case of a compromise of one of your devices, an attacker can spend coins from your wallet. Checking your balance might reveal to you whether your device has eventually been compromised. If a coin has been spent, this coin cannot be spent a second time. The Exchange examines every coin whether it has been spent and thus makes double spending impossible.
Can I send money to my friends with Taler?
Taler supports push and pull payments between wallets (also known as peer-to-peer payments). While the payment appears to be directly between wallets, technically the operation is intermediated by the payment service provider which will typically be legally required to identify the recipient of the funds before allowing the transaction to complete.
How does Taler handle payments in different currencies?
Taler wallets can store digital coins corresponding to multiple different currencies such as the Euro, US Dollars or Bitcoins.
Taler currently does not offer conversion between currencies.
How does Taler protect my privacy?
Your wallet stores digital coins that are blindly signed by an exchange. The use of a blind signature protects your privacy as it prevents the exchange from knowing which coin it signed for which customer.
How much does it cost?
The Taler protocol allows any exchange to set its own fee structure, allowing operators to set fees for withdrawing, depositing, refreshing or refunding coins. Operators can also charge fees for closing reserves and for (aggregated) wire transfers to merchants. Merchants may choose to cover some of the fees customers incur. Actual transaction costs are estimated around 0.001 cent/transaction (at high transaction rates, amortized over billions of transactions, excluding migration costs). Note that this is an early estimate, details may depend on hosting and backup requirements from the regulator and could thus easily be 10x higher.
Does Taler work with international payments?
Taler's wallet supports multiple currencies, but the system currently does not support conversion between currencies. However, in principle an entity that accepts deposits in one currency and allows withdrawals in another currency could be created. Still, the regulatory hurdles in this case tend to be particularly complex. The focus for Taler is on day-to-day payments, so we have no plans to support currency conversion in the near future.
How does Taler relate to the (European) Electronic Money Directive?
We believe the European Electronic Money Directive provides part of the regulatory framework a Taler exchange with coins denominated in Euros would have to follow.
What bank would guarantee the conversion between Taler coins and bank money in regular bank accounts?
The exchange would be operated by a bank or in cooperation with a bank, and that bank would hold the funds in escrow respectively on an internal settlement account. Note that this bank could be a regular bank or a central bank for a central bank digital currency. Irrespective of this, the bank would fall under the relevant financial services regulations, which is one reason why consumers can rely on the conversion of Taler coins into normal bank money.
To whom would consumers complain to in case of non-conversion or non-compliance?
From a technical point of view, any exchange is audited by one or more independent auditors. Merchants and consumer wallets will report certain issues automatically to the auditors, but auditors may also provide a method for manual submission of issues. The auditors are expected to make their reports available to the respective regulatory authorities, or even the general public.
From a legal point of view, users can always turn to their national authority responsible for settling disputes concerning the management of exchange services. For exchange services conducting business in Germany, this would be the general authority in charge of disputes (Universalschlichtungsstelle des Bundes). In addition to this, the European Online Dispute Resolution (see ODR) as a platform provided by the European Commission can be called for the settlement of disputes concerning exchange services headquartered in member states of the European Union.
Are there any projects already using Taler?
We are aware of several businesses running exploratory projects or having developed working prototypes. We are also in discussions with several regular banks as well as several central banks about the project. That said, there are currently no products in the market yet, and we believe this would be premature given the state of the project (see also our bugtracker for a list of open issues).
Does Taler support recurring payments?
Today, our wallet implementation does not support recurring payments. Recurring payments, where some fixed amount is paid on a regular basis are in theory possible with Taler, but they come with a few caveats. Specifically, recurring payments can only work if the Taler wallet is running and online around the desired time. Furthermore, given their repetitive nature they are linkable, and could thus be used to deanonymize the user making the recurring payment, for example by forcing the user offline at the time of the payment and observing that it does then not happen on time. Finally, the Taler wallet does not work with credit and thus the user would have to make sure to carry a sufficient balance for the recurring payment to be made. Still, they can be useful, and a future version of the Taler wallet will likely support them. But this is not a feature that we are targeting for Taler 1.0. at this time.