It is hard to understand why a system where it is impossible to track payments (Chaumian anonymity) is cheaper than one where it is possible to do so, but we choose not to. If avoiding tracking payments is cheaper than tracking them, why wouldn't participants just not bother to track them even when they theoretically could? Granted, there are situations where taking away someone's options can make him better off. The classic example would be the Prisoner's Dilemma, which I will assume people here are familiar with. Given the choice to cooperate or defect, standard analysis predicts that both players will defect. Remove that option, and they will be forced to cooperate, leading to a better ("lower cost") outcome for both. The structure of the game forced them to take advantage of an option which has the net result of costing them more. The question is whether this kind of reasoning would apply financial transactions. Is it really true that taking away the option of tracking transactions is going to save money overall? Sure, not keeping records is a priori going to be cheaper than keeping them, but the question is how much the loss of those records is going to hurt you. Presumably records are kept to protect against various risks. Without that protection, you need other means to control the risk. But if those means exist and they are cheaper than record-keeping, then again even without anonymity it should be cheaper to use those methods in place of the records. I think we would need to see a more detailed explanation of exactly why it is that people can't save money today by avoiding keeping records, when they could do so if it were impossible to keep records. (One possible explanation is that it would be a regulatory effect. People are forced by the government to keep records, to their detriment, that they would prefer not to keep. With anonymous bearer certificates it would not be possible to keep the records so people might hope to escape the regulations. However the problem with this reasoning is that the same forces which require the record-keeping would be likely to ban the use of instruments which prevent keeping records.) Hal