We can therefore see that someone has to make that "worth" mean something, so for this we need an "issuer" sometimes known as Ivan. It's beyond the scope of a crypto list to discuss this in depth, but typically Ivan would deposit $1 for every issued electronic dollar in some bank account somewhere.

You're right, for a crypto currency to be credible in the long term, it needs to be convertible into Real Money(tm), i.e., something you can use to pay your taxes. (That's the actual working definition of money, by the way.) But that really has nothing to do with the crypto part. You can have crypto out the wazoo, and it's worth nothing unless there's an issuer in meatspace who will accept your crypto coins, cancel them, and hand you the agreed amount of money. Or think about the ETF model I suggested a few years ago, which provides a close approximation to convertibility without requiring that the issuer be able to redeem every individual coin on demand. Regards, John Levine, johnl@iecc.com, First Unitarian Society of Ithaca NY Between 200 and 500 members, depending on who's counting PS: For anyone who wants a crypto currency backed by gold, that's functionally equivalent to a gold ETF, of which there are several, such as ticker symbols IAU, GLD, GTU, SGOL, and AGOL. They do what they do perfectly adequately, but they are in no sense currency. Bubble sceptics can trade put options on them. Too bad there's no options on bitcoins. _______________________________________________ cryptography mailing list cryptography@randombit.net http://lists.randombit.net/mailman/listinfo/cryptography ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE