From: Wolfgang Roeckelein <wolfgang@wi.WHU-Koblenz.de>

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-> Digital cash should not be "anonymous" -- paper currency isn't. Serial

There seems to be a misconception here what is meant with anonymous. Paper cash is anonymous: I can't derive the person I got the note from from the note itself. So if I meet a guy in the street, he gives me a pack of cigarettes and I give him cash, this transaction is anonymous.

It isn't difficult to make paper cash less anonymous, though, by tracking serial numbers. This is occasionally done in "law enforcement" situations - recording the notes used to pay ransom or bribes. It wouldn't be difficult to add serial-number recording equipment/mechanisms to automatic bank-teller machines, to record what serial numbers would be given out to whom. (This can be done either by adding scanners to the ATMs themselves, or by scanning the money before putting it into the ATM, and having the ATM record that transaction #43 dispensed the 105th-110th bills in the stack. Scanning can either be done by OCRs, or by replacing the human-readable numbers with bar-codes, as some of the paranoids periodically suggest the US Treasury is about to do as part of some heinous plan. However, the original posters' assertion that digital cash should not be anonymous is not a technical statement, it's a value judgement, and in my opinion it's a bad one. There are a lot of genuine social needs that anonymity can support, and a lot of bad things that can be done with traceable money. Aside from that, traceability costs money. Original gold and silver money didn't need to be traceable, though coiner's and assayer's marks were useful, and it is easier to keep track of your pile of gold bars if they're numbered. But paper money has serial numbers largely to prevent easy copying; gold is a lot harder to counterfeit, unless you've got a king who insists that coins with his face on them should be worth N times as much as anonymous coins. Bill