Money has value because we agree it has value. As long as noone is willing to give me a meal, a nights lodging, or 30 minutes CPU time for some number of tacky tokens, they will be just that;
The simple model: I offer to accept U.S. dollars and hand out tokens at a one-for-one rate. I also promise to redeem them at the same rate. Unfortunately, nobody would trust me, and they'd be smart not to. I'm not an established financial institution. Not only might I abscond with the money, I don't have the financial reserves to cover redemptions and still make money on a no-fees system. And I don't know the laws involved, so you might lose out when I get hauled off to jail. Poll: assuming you had a use for FedNote-backed 100%-reserve digicash, what service fee would you be willing to pay, and how much money would you be willing to leave in the hands of some random individual? Eli ebrandt@hmc.edu