I have always been skeptical of this observer-chip approach, because it wasn't clear that it was feasible to make a tamper-resistant chip economically, and because the specialized hardware that would be required would prevent the system from being used on widely-available PCs.
Well, the government pretends they can do a tamper-proof chip, complete with wiretap keys installed by the wizards behind the curtain, for $36. That's $26 for the chip in qty 10,000, plus a subsidized $10 for tapping service and key installation. I thought Mykotronx's press releases had sounded more like they wanted $36 themselves, and I don't know the price for VLSI Inc's tamper-proof technology, but it may not be far off. As far as interfaces go, PCMCIA are nice, but there's not much data to transfer in most digicash exchanges, so a dumb cheap serial interface may be more realistic, since everything supports it. Bill Stewart