Quite a time to go on vacation and have the power supply to my laptop first show wires then break! A great series of rants about the backing of ecash, and I missed most of it (at least in real time). I'll add a few of my thoughts and see if it all goes any further. Ecash is a means of transferring value, currently USD at Mark Twain, betweeen parties. Ecash, however denominated, is not a currency in itself. Any "currency" or other "value units", be it USD, DEM, gold, silver, coupons, etc can be transferred by the ecash system. The Mint licensee must agree and then issue the units. This is, after all, software. The value unit or currency has value because people agree it has value. CyberBucks were (and still are) somewhat convertable to tangible goods - they are for sure convertable to intrinsic goods as demonstrated by the CyberBucks trial. USD and DEM have value only because we all accept them as payment - as fiat currencies there is no formal backing. Gold has value because ... One of the keys in any system is that users feel comfortable about the future value of the units or currency, be the units a national currency, a commodity, or a coupon. There are two components to this: 1) The user must believe that they will receive the units back from someone at a later date - this is plain old fashion credit risk. For example if I am running an ecash system with gold then you have to believe that I will give you gold upon request - same for USD and this is why banks for the time being should be the primary issuer to avoid a general credit risk. If users are unsure or unable to determine if the Mint operator will return the nominal value of the units then there is not enough confidence to run a system. Consider pre-FDIC days in US banking. 2) The user must believe that the units will have a value in the future. We can agree that FOT Units are each worth US$1.0 million today, but how will their value be determined tomorrow? Non-national currency, however attractive from a theoretical standpoint is weak under this guideline. I am a strong believer that ecash will support many national currencies, commodity based implementations such as gold and silver, as well as coupons and commercial equivalents. Use of ecash for payments will depend only on the creative uses presented by someone willing to sell at a profit a product that attracts customers. There is likely some point where a non-national currency will become attractive first to the internet community, then to the public at large. If done with low credit risk it can survive. You should consider that two of the key elements to determine value are precisely known in ecash and not in circulating money - money supply and velocity. One now has only to consider other factors like purchasing power to obtain a base value. Ecash puts banks back into the business of being banks - acting as a storehouse of value, and as a means to transfer this value, all for a fee. The early bank models were exclusively along these lines, with the various lending and investing functions added later. All for now, a start anyway. FOT Disclaimer - Personal not corporate thoughts. Frank O. Trotter, III - fotiii@crl.com www.marktwain.com - Fax: +1 314 569-4906 --------------------------------------------