From: "Perry E. Metzger" <perry@snark.imsi.com> Jim Miller says:
Michael V. Caprio Jr. asks:
So what is the natural currency to trade in on the Internet?
... The natural currency today is the U.S. Dollar, as transfered via digicash. Perry It seems that ciphercash schemes, aka banks, might have cash deposits to invest. The interest on these investments might help cover the transaction costs. The value of the ciphercash might ought to be able to rise and fall (slightly, perhaps dramatically occassionally) with the performance of these investments. How about a floating cipherdollar? Holders of cipherdollars would share in the proceeds of the investment, minus real transaction costs and overhead, plus transaction fees if any. How much they were worth would depend on how long they were kept, the fee structure, etc. In other words, I'm saying that it might be easier to let the value float slightly (with a current, published conversion rate into the currency of your choice) than to peg it exactly at any particular value. If it turns out that a lot of people buy the things and keep them for a long time, it would be nice for them to increase in value (compared to our friend the US $) as a hedge against inflation. Of course, I'm merely suggesting competent money management here by the bank, not that anyone (except cypherzealots, of course) would deliberately invest this way. Sort of like interest on your checking account. A similar (more radical) scheme would equate one cipherbuck == one share of stock in the cyberbank, redeemable at whatever the stock is currently selling for (approximately). I might like safeguards of some sort, if feasible, to prevent the bank officers from absconding with the loot... -- dat@ebt.com (David Taffs)