At 8:17 PM 8/28/94 +0200, nobody@ds1.wu-wien.ac.at wrote:

Digital cash never made it off the ground because credit card companies are now held to stricter laws about disclosing account information, and banks provide competitive debit cards and live under the same disclosure laws (i.e. credit/debit cards good enough for 99.99999% of the people). Furthermore, merchants are restricted from culling purchase records to build dossiers on spending habits (or face legal action), so manufacturers now rely on voluntarily supplied info, usually by enticing customers with various benefits of "registering", such as rebates, discounts, sweepstakes entries, etc. Nobody cares that digial cash preserves anonimity, because bank and stores aren't interested, and customers want the extra benefits that stores offer to add their name to their database.

Any argument which uses anonymity as the first cause for implementing a digital cash system deserves to lose. Like sophisticated engraving, intaglio printing, and a zealous anti-counterfeiting effort, strong crypto and zealous anti-double spending efforts are the technologies which enable trust in a digital cash certificate for it's own sake. The trust of that certificate is what lowers costs a transaction using it to the point where vendors don't need security deposits to back up their credit card float, and where direct connection to a trusted third-party aren't necessary for that or a debit card transaction. It also obviates the need of identifying who you get it from. It's money that's the issue here. Same as it ever was. Privacy, and maybe even crypto-anarchy or anarcho-capitalism, is the icing on the cake.

For this reason, offshore banks don't fare too well since the digital cash they issue generally isn't spendible. It is convenient however, if you need to transfer money from one account to another. But you have to go to a "money broker" who will exchange your digital cash for spendible cash, and pay a transaction fee.

A digital cash issuer (an underwriter) doesn't have to be domiciled in an imaginary foriegn country in order to survive. It can sit in New York, or Boston (I hope...), or (horrors) Washington DC. I expect that maybe someday banks may eventually hold portfolios of outstanding digital cash, and it's easy to see an eventual secondary (derivative) markets for bundles of digital cash, in the same way mortgages are handled. It's also easy to see how it will be easier to leave it the underwriters to handle the stuff in the beginning, and for a bank to get commissions for referring customers to a specific underwriter. In this model, the "money broker" is actually the issuer and the bank simply is an agent, like in traveller's checks. Cheers, Bob Hettinga ----------------- Robert Hettinga (rah@shipwright.com) "There is no difference between someone Shipwright Development Corporation who eats too little and sees Heaven and 44 Farquhar Street someone who drinks too much and sees Boston, MA 02331 USA snakes." -- Bertrand Russell (617) 323-7923