On Wed, 17 Jan 1996, Alexander 'Sasha' Chislenko wrote:
If you sell a new version of CryptoDoom for digicash, and would like to buy a car that is only sold for paper money, and I have a car to sell and want to buy your CryptoDoom, *somewhere* in the market there will appear an exchange agent that would help us complete the transaction. In the case of parallel digital currencies this exchange market would be very liquid because of the high speed, low cost, and security/privacy of the transactions.
This model isn't as practical as it seems. For one thing, it is a classic case of barter: exchange for things that you want but don't have. This becomes extremely difficult with specialization. Letsay I make only CryptoDoom, its the only thing that I have the skills to make. The things that I want but can't produce each day are numerous: food, transport, housing, ad infinitum. One-to-one barter is only usefull if both agents (in a 2 agent economy) need only 2 goods and specialize. This is the root of money: a means of exchange between heterogenous products. Allthough a parallel digital internetwork would allow occasional barters to increase there viability, it does not mean that barter will replace money. But there's some ambiguity here: What is implied by "The case of parallel digital currencies this exchange market would...."? Does this recomend exchange markets (barter) or fiat (currency)? ------------------------------------------------------------------------------- Patiwat Panurach Whatever you can do, or dream you can, begin it. eMAIL: pati@ipied.tu.ac.th Boldness has genius, power and magic in it. m/18 junior Fac of Economics -Johann W.Von Goethe -------------------------------------------------------------------------------