From: mark@coombs.anu.edu.au (Mark)
Date: Wed, 25 Nov 92 16:23:55 PST
To: cypherpunks@toad.com
Subject: Re: Electronic Banking
Message-ID: <9211260023.AA11537@coombs.anu.edu.au>
MIME-Version: 1.0
Content-Type: text/plain


>(A minor note: I ended up doing the Xeroxing for free, which hasn't
>yet been declared illegal...though I presume you'll all carefully note
>this on your tax returns, as such "barter exchanges" are reportable
>income. In theory, which shows how hopeless tax collection is
>becoming, all of our "mutual consulting" on this list, and on the Net
>in general, is _taxable income_--just as if we were plumbers and carpenters
>getting together to work on each other's houses. A crazy system.)

So *thats* why nnacct is there :)... Does the tax office get an email from 
each news admin every fiscal year? :) So they can charge us for services 
rendered by the net?

With regard to digital cash, I have yet to read (or have forgotten the
definition) the implementation. What I preceive it as is a form of IOU's
that if someone does something for you then you send them an applicable
amount of credits. To simplify it a bank could issue credits and people
could trade in them, sending them back and forth, each digitally encrypted
and based on the amount of credits in each persons bank account. I assume 
each transaction would be validated through a bank to ensure the credit is
unique and the right value?

E.g:

  Customer gets suppliers account number from the supplier encrypted with
  the banks public key.  They send it and the amount of cash to transfer to
  the bank all encrypted with the public key of the bank. 

  The bank decrypts, gets the amount and decrypts the destination account.
  It then sends a message to the supplier saying that amount has been
  deposited in their account and the transaction between the customer and
  supplier can be completed. Otherwise it tells the supplier (and customer)
  there is a problem with insufficient funds or incorrect data.

  The cash may be held in ether until both parties confirm the transaction
  has been completed. If the commodity is electronic data the supplier may
  send to the bank a transaction private key encrypted with the customers
  public key so that the customer cant cheat the supplier as he has to ask
  the bank for the information to access his/her data which has been encrypted
  with the other half of the transaction keypair. That way the bank knows the
  transaction has been completed and it finishes the transfer of funds and
  sends the transaction private key to the customer.

  Each commodity, especially if it was physical might be serialized so there
  could be proof that the customer purchased that item with that SN. If the
  merchant was a crook the audit trail would catch him... the customer wouldnt
  be able to cheat as the merchant wouldnt have to release the goods (as is
  the situation now in Real Life (tm)) until the funds were paid.

  Issues of Big Brother spying on your transactions apply here but I guess
  one could always use a psuedonym for the electronic commodities and a
  postal box paid for with digital anonymous cash for the physical stuff..
  (assuming it was mail order... you wont have to give a name for store
   buying, just a bank public key and your encrypted account number.)

  Someone might even want to set up a physical forwarding company which 
  merely acts as a buffer for people to increase their privacy. Paid for 
  anonymously and digitally. I havent heard of any companies specialising in
  this type of service to date.

This make any sense? Has it been said before?
Mark
mark@coombs.anu.edu.au