digital cash/legal tender

Legal tender is a quality given by government to certain forms of
money such that a creditor who refuses to accept that money in payment
of a debt loses certain rights (e.g. to collect further interest.
In our system, federal reserve notes are legal tender,your personal
check is not.

  It is acceptability, not government edict wich makes something
money. (Note the development of NOW accounts, e.g.).

  Credit cards are not money.  When you use a credit card, you are
promising to pay in the future.  The merchant sells this promise to
the credit card issuer.

  In order for electronic money to be true cash, it must be able to
circulate from Alice to Bob to Carl to Dave without the need to
contact the issuing bank.  Otherwise, it is merely an electronic
check, perhaps anonymous.  If Bob must deposit or validate the
money first in order to make sure Alice doesn't double spend it,
then it is no different from Alice having $200 in her checking
account and writing a $150 check to Bob and a $150 check to Carl.
The first one who gets it to her bank collects, the other one has
it bounced back.

F_GRIFFITH@ccsvax.sfasu.edu says:
>   In order for electronic money to be true cash, it must be able to
> circulate from Alice to Bob to Carl to Dave without the need to
> contact the issuing bank.  Otherwise, it is merely an electronic
> check, perhaps anonymous.

No digicash system can possibly operate under this constraint. Mere
numbers, unlike gold, can be duplicated. Without some sort of central
verification involved the techniques cannot work. I suppose "true"
digitcal cash by your definition is impossible.

Perry

Perry E. Metzger () writes:
> F_GRIFFITH@ccsvax.sfasu.edu says:
> >   In order for electronic money to be true cash, it must be able to
> > circulate from Alice to Bob to Carl to Dave without the need to
> > contact the issuing bank.  Otherwise, it is merely an electronic
> > check, perhaps anonymous.
> 
> No digicash system can possibly operate under this constraint. Mere
> numbers, unlike gold, can be duplicated. Without some sort of central
> verification involved the techniques cannot work. I suppose "true"
> digitcal cash by your definition is impossible.

   Doesn't Chaum's "observer" based system allow digi-coins to work?
(e.g. by carrying around copy protection which prevents you from 'cp'ing
cash instead of 'mv'ing it, or prevention of double spending?)

   Observer's may not be cypherpunk-correct technology but they might work
with legal (govt) backing. Counterfeiters who "copy" cash by breaking the
tamper-proof observers would be hunted down through traditional investigatory
means. The economy/banks might take a hit the way credit card companies
get hit by con-artists, but overall they would remain stable.

   Does anyone have a reference on Chaum's observers besides the SciAm
article (which I read a long time ago and have now forgotten)?

-Ray


-- Ray Cromwell        |    Engineering is the implementation of science;    --
-- EE/Math Student     |       politics is the implementation of faith.      --
-- rjc@gnu.ai.mit.edu  |                         - Zetetic Commentaries      --

Ray says:
> > No digicash system can possibly operate under this constraint. Mere
> > numbers, unlike gold, can be duplicated. Without some sort of central
> > verification involved the techniques cannot work. I suppose "true"
> > digitcal cash by your definition is impossible.
> 
>    Doesn't Chaum's "observer" based system allow digi-coins to work?
> (e.g. by carrying around copy protection which prevents you from 'cp'ing
> cash instead of 'mv'ing it, or prevention of double spending?)

Such a system would depend on people trying to break the system being
unsophisticated. I do not believe you can rely on trick hardware to
provide "copy protection" for digital coins.

Perry