Regarding "What backs up digital currency/cash", a hypothetical situation just to see what you guys think. Can this happen ? I honestly have my doubts, mostly I see logistical problems (finding a mechanism, etc, if you recall my mini-rant just a few days ago). Anyway, these are some of the things I honestly feel would have to happen for a true Internetwork currency to take off, if that's even possible. Situation 1- You're a company, "Bug Boy Video" (my apologies to the real Bug Boy Video if it exists). This national video chain decides to get involved on the net and sees that there is a token standard- they figure they can get people to visit their website by offering a "web hunt". Anybody who can solve any of the puzzles gets a token worth, say, a free video, a 19.99$US value- just redeem the token. Token Backing-- 19.99$US video from Bug Boy Situation 2- You're a bank, "1st Netherworld". You use the same token system to make digital coins worth a penny each and issue them to your customers in exchange for 0.01$US - only to account holders of course. Now you have the "real money" to invest while the users of the system store and transfer these tokens around the net to each other (in reality I guess you use a net-cheque ?) Token Backing-- 0.01$US with 1st Netherworld Situation 3- You're a mining operation, "Money Pit". Your product is gold and silver refined to be 99.99% pure (24K in gold). You decide to issue some tokens on the net worth an ounce of gold and another kind of token worth an oz of silver. Some would call you a total nut corp, but they don't call you Money Pit for nothin. Token Backing-- 1 oz silver (approximately 7$US?) with Money Pit. 1 oz gold (approximately 490$US?) with Money Pit. Situation 4- Some group of hackers, "BizHack", decide to issue a private currency among themselves for the purposes of trading vulnerability information, services, etc. They come up with a standard, "an hour of work", and someone runs the bank. Anyone with currency can use it to buy goods and services from anyone who will accept the money. Token Backing-- 1 hour of service from a BizHacker. Situation 5- A bunch of kids on the net play this game, "Tragic: The Addiction", and they use rec.games.trading-cards.marketplace.tragic.sales to do their trading. Somebody gets the keen idea to set up a "holding company" that people can send their cards to and get a "token" out that represents the Tragic: card. They trade these tokens on the net until someone wants to redeem his/her "Black Lilly" token in for the real card that it represents. Some sort of redemption charge applies, of course. Token Backing-- Tragic: cards with holding company. Situation 6- You're a beer manufacturer, "Smart Foam", and decide to skip all the market middlemen and sell stock directly on the Internet. You set up your super-keen promo page and users buy stock directly from you. Now you hear about this other company that is doing electronic transfers of stocks on the internet in the token system, each stock represented by a single token. People trade them at will. You suggest to your buyers that they might want to look at the system as a way of trading your stock and offer to send the buyers stock directly to the exchange so it can be withdrawn by the buyer as tokens. As a beer brewery, we don't want to get in trouble with the SEC for offering the trading place for our own stock, we'll let somebody else have the liability. Token Backing-- One share of "Smart Foam" stock. Situation 7- (doubtful) You're running an exchange where people can send stock certificates to a third party bank and you'll mint them a token that represents that piece of stock so that it can be traded freely on the Internet. Your clients use your non-anonymous system so that trades can be tracked and reported, you make a few bucks at registration time, but don't charge for transfers (to cut out the brokers). You deal with the SEC directly to make sure all the exchange rules are being followed to the letter, and make the service as user friendly as possible- you are a place that people come to trade, a market square as it were. Token Backing-- A share of common stock in a particular company. Situation 8- (the "big mental leap") You set up a market square for tokens. In this online place the users can offer tokens for sale to the general public (other users) and the service acts as an "escrow" so that both parties have to make their transfers through the service. You track "prices" of the tokens, maybe users are on average trading 1 BizHacker token for 2 Bug Boys. Some sort of "trend" starts to emerge at your market. This BIG LIGHT comes on inside your head and you decide to issue your OWN token, this token is based on the MARKET VALUE of all the tokens that are traded at your exchange. You call them "market credits" and you "sell" them on your own market. Token Backing-- One market credit equals 1.5 BizHackers equals .5 Bug Boys equals 4 silver Money Pits equals etc, etc, etc ... the value changes constantly. Market tokens have now taken on a new characteristic, that they are going to be accepted much more widely because they can be used to purchase many more goods and services, they are accepted in the market which you have provided. Situation 9- Other people see how cool your market is going and decide to set up some of their own. These markets have their own clients, tokens backed by everything from stock, state currency, services, pizza coupons, car wash tokens, and Darla's special backrub tokens (worth 2 gold Money Pits each!) The bright idea pops up in somebodies head to link a few of these markets together and .... the rest is future. Followup- There are a lot of "trust" assumptions in this, but in the end the market always sorts things out. That's not to say a few people won't be holding valueless tokens on occasion or that people won't figure out ways to hurt the system, but thus is real life. Internet economy won't come from the top down, it'll come from little bits of trust that build up between people who do business together-- it'll come from that little group of consultants issuing their own "value tokens" backed by their personal service .. when they get together and issue a common currency which ALL of them will accept, that currency becomes more widely accepted in this new marketplace. It's in the best interest of everyone involved to retain the utmost professionalism when distributing tokens because they represent your good name and the name of those who join in. THIS is how trust develops, you can't dream trust up, trust just happens. An exchange fails if people stop trusting it, so they are by nature self- governing entities. Global currencies and Internet economies aside- even if "the big leap" above couldn't happen, I'd sure like to see some companies issuing tokens like they were gift certificates or coupons, those have good trade value if the name is well known (mostly for lack of something better to trade with I'm afraid). No mechanism can replace trust, trust just is. You trust the guy that fixes your porch because he's the guy you trust to fix your porch. You trust your consultants, your lawyers (maybe not them), and your accountant because they are the people you rely on, you just do. Anyway, just my 0.02$US/MTB -- Jeff. -----BEGIN ECASH PAYMENT----- oLmQgwABR6GgiqCukIFPkIECkIECkIEEkIEBkYQxW3hfkIQxbe1fkIFPkoFAlJQS snGvr60Cm0Ao6L2429ljPcC9l5SU1HRHyTS1iQ8W058T4A1+OICJq3GQgRCSji4w MiB0byB0aGUgbmV0koCUgJCBApGEAAAAAJCBAKGguKCrkIIBoZPgKKjPPXvwAl1Y kQBWxjFKp9zcfoRNDgsodlUqc5Vybk86UXpmsr2C853o6iZ5NPZ+DiZ0gEhooatU TZPoY016/rmyGspTixn9xievBxMW1FR34tARr6NgzyXyVU4AbxF0k+Ar2uqxO15E B6pDqYImuoZzUpMnkGo/vjm7k4nod576vB9F5DUSBMPLIeNm7kg6GuVDW0oPOou3 nbpkJ5AM5lItSJLMgsxel7LON6bjitnFHCLYdseV725AjkN49p7VE3SQgQKhoaE= -----END ECASH PAYMENT----- -- http://www.blackmagic.com/people/jeff Simply Be. SKYDIVE!