Simplest possible ecash mint

[jamesd at echeque.com]

On 24 Dec 2001, at 9:40, Nomen Nescio wrote:
> How simple can an ecash mint be?
> 
> For the simplest case there should be no accounts.  All the mint does is
> exchange coins for other coins.  There are no customer lists, no records
> of transactions (except as needed for double-spending detection).

In order to give value to ecoins, it is necessarily to make them 
convertible with some other currency, normally an account based 
currency. It is difficult to do this without supporting accounts.

One could of course have a pile of gold, and physically and in 
person exchange coins for physical gold, but it is considerably 
more convenient to exchange coins for account based money, 
such as e-gold.  It is difficult to make such transactions entirely 
atomic, because of the possibility that something might go wrong, 
requiring durable state.  We then need a database key for that 
state.  Such a database key looks rather like an account

> By itself, this trivial mint can support a transaction system, and in
> principle a whole economy.  For Alice to pay Bob, she gives him coins.
> Bob exchanges them at the mint for new coins, thereby checking that they
> are good.  End of transaction.  Bob can spend his new coins elsewhere,
> unlinkable to the exchange.

This only works if the transaction is complete and final, for example 
downloading pornography, or for people who meet physically, and 
exchange physical assets for ecash.  If the transaction is for 
account assets outside the system, then the transaction must 
have state that looks very like an account, if only a transient 
account.

> The mint does not even have to be involved in transfers between ecash
> and other forms of payment.  This is one of the things the e-gold people
> got right.  They outsourced in- and out-transactions.  You go to any of
> dozens of coin dealers, currency services, shady operators of all stripes,
> to get money into or out of your e-gold account.  The same thing would
> work here.  Third parties would offer to buy or sell ecash for dollars,
> grams of gold, hi grade cocaine, etc.

The value of e-gold is ultimately maintained by physical transfers 
with a pile of gold inside a vault outside US jurisdiction.  It takes a 
great deal of time and cost to actually transfer stuff to and from that 
vault, hence the numerous intermediaries.  The intermediaries 
therefore find it convenient to maintain accounts with e-gold.

While accounts are not needed for many transactions, and should 
be avoided where possible, they are convenient for many 
transactions, and essential for some.