At 04:39 PM 1/17/96 -0600, jim@bilbo.suite.com (Jim Miller) wrote:
The existing underground economy uses the same money as the aboveground economy (i.e. paper money, for the most part). Could a significant underground digital economy develop if the aboveground digital economy used only identified e-money?
Let's consider a general case: we have a number of market segments, and a number of currencies. The currencies may float between the markets and translate into one another. If the currencies are independent from the markets, the flow of funds may cross the currency boundary, then a market boundary (or vice versa). If not, these crossings maybe synchronized - to enter the next market segment, you have to exchange the currency. All you need to have all the "economies" running is some gates between the currencies somewhere in the system. There are lots of alternative currencies in any society, including balances of personal favors between people; usually they do not have currency conversion problems, even if explicitly regulated. 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. I have some personal experience with similar issues, in my attempts to move money in and out of Russia. In these transactions cash rarely crosses the border. If an American A1 wants to send some dollars to a Russian R1 who needs roubles, and a Russian R2 wants to send some roubles to American A2 who needs dollars, then A1 pays dollars to A2, and R2 pays roubles to R1. Since both inter-market and inter-currency transactions should be balanced, such schemes would always be possible. ----------------------------------------------------------------------- Alexander Chislenko <sasha1@netcom.com> Public Home page: http://www.lucifer.com/~sasha/home.html World Future Society[B]: http://www.lucifer.com/~sasha/refs/wfsgbc.html -----------------------------------------------------------------------