This is the Punch Camera by designer Matty Martin, which was featured at the Intel University Design Expo. And I want it. Instead of using ink, it actually punches images on blank paper. And that's just the beginning of it.
After converting the image into a half-tone, the puncturing mechanism moves dot by dot. When all dots are precisely aligned reproduce the image, the camera screen tells you it's ready. Insert the paper in the slot, punch firmly as instructed, and get this:
Not only that, but apparently you can show the photo to a webcam, and it will automatically take you to a gallery with more—normal—images associated with the paper one.