the cost of untracability?

E. ALLEN SMITH EALLENSMITH at ocelot.Rutgers.EDU
Fri Apr 12 23:51:16 PDT 1996


From:	IN%"weidai at eskimo.com"  "Wei Dai"  7-APR-1996 10:52:52.30

>I think you're right.  There is no need for the issuer to pay explicit
>interest.  The easiest way to eliminate signorage would be to steadily
>increase the value of each denomination of ecash.  It would be kind of
>like a mutual fund that doesn't pay dividends.  In fact, if the ecash is
>backed by a portfolio of investment securities and its value floats with
>the value of the portfolio, then it would be almost exactly like a mutual
>fund.

	Another method would be for ecash to have a label on it as to when the
issuer would redeem it. Until then, if you want cash from it, find someone else
to trade to. This has the interest advantage for the purchaser, and the
advantage to the issuer that they won't have to worry about when someone will
redeem it. They'll know that they'll need to have a particular amount on a
particular date, and their earnings/losses up until that point can vary all
over the place without being worried about whether they can make their
payments. Ideal for a startup business.
	-Allen






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