Mike Ingle:
If someone swipes your digi-coins, they can spend them hundreds of times
For both the online and the mostly-offline system, only one one or a small number of fraudulent coins can be spent without online detection. Furthermore, digicash is much easier to lock up than cash; encrypt it with your secret key, following the normal procedure of keeping the secret key on a closely held floppy or smart card.
A few such heists could make people back away from digicash.
Why haven't people backed away from credit cards despite $10's of billions in fraud? Digital cash, implemented reasonably well, is probably going to lose orders of magnitude less to fraud per transaction than credit cards. The transaction costs may be much less than the 3-7% cut taken by credit card companies. One practical task will be thorough debugging before implemented on large scale, as there are plenty of people with (a) an ideological prejudice against cash that or (b) uncomfortable with their lack of understanding of the protocols, who will jump on the opportunity to flame it. (cf. current discussion on imp-interest with Detweiler & Co., for example). Nick Szabo szabo@netcom.com