Re: ecash thoughts

At 05:53 PM 7/3/96 -0400, Simon Spero wrote:

>2) If ecash is used to create a new currency- i.e. the value of a unit of 
>the ecash is not tied to any single existing currency, what should the 
>value of one currency unit  be set at? (let's call it a Turing)

Low, maybe a tenth of an American cent.  But probabilistic payment should be 
used to allow the minimum average payment to go way below this, perhaps to 
an unlimited extent.  The reason is simple:  The cost of providing net 
transactions, and electronic transactions in general, can be expected to 
drop exponentially, just like the cost of telecommunications and CPU power 
do.  Any arbitrary limit to how low they can go will act somewhat akin to 
the minimum wage:  It will deter development of any product or service whose 
perceived value is less than this arbitrary minimum.

Jim Bell
jimbell@pacifier.com

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On Wed, 3 Jul 1996, jim bell wrote:

> At 05:53 PM 7/3/96 -0400, Simon Spero wrote:
> 
> >2) If ecash is used to create a new currency- i.e. the value of a unit of 
> >the ecash is not tied to any single existing currency, what should the 
> >value of one currency unit  be set at? (let's call it a Turing)
> 
> Low, maybe a tenth of an American cent.  But probabilistic payment should be 
> used to allow the minimum average payment to go way below this, perhaps to 
> an unlimited extent.  The reason is simple:  The cost of providing net 
> transactions, and electronic transactions in general, can be expected to 
> drop exponentially, just like the cost of telecommunications and CPU power 
> do.  Any arbitrary limit to how low they can go will act somewhat akin to 
> the minimum wage:  It will deter development of any product or service whose 
> perceived value is less than this arbitrary minimum.

If the value of a Turing is one tenth of an American cent, then it would
actually just be a pseudocurrency backed by U.S. dollars.  The inflation of
ecash would be the same as the inflation of U.S. money.  However, I do agree
that the value of one unit should be low.

You use Moore's Law to state that the cost of electronic transactions drops
exponentially.  However, this is only true if the electronic transactions
use the same amount of bandwidth.  As chip processing speed and transmission
bandwidth double, the cost of building the equipment also doubles.

- -- Mark

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