From: tcmay@netcom.com (Timothy C. May)
Date: Mon, 18 Oct 93 21:52:22 PDT
To: cypherpunks@toad.com
Subject: Re: backing?
In-Reply-To: <9310190423.AA07858@uc1.ucsu.edu>
Message-ID: <9310190450.AA03867@netcom5.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


Stuart Card writes:

> I propose a simple basis for digicash: gold.
> REAL gold in a depositary, for which the digicash is
> basically a warehouse receipt.  Try this:
> 
> Alice purchases 10 ounces of gold and puts it in Bob the Banker's
> account at a depositary institution (like the big one in Zurich
> that holds much of the world's physical gold).  When she makes
> the deposit, she annotates the transaction with an encrypted
> message to Bob saying "This deposit from <long random number>."
> Alice then logs into Bob's public access system with a pseudonymous
> account (automatically generated by Bob's hacked login software).
> Alice sends another message to Bob saying "Hey, that deposit you
> got from <long randome number> was from me: pseudonym."
> Bob issues digicash to <pseudonym> (not knowing this is Alice),
> and Alice happily spends the money under a DIFFERENT pseudonym.
> 
> OK, fire away, my head is down :-)

Some points:

* When Alice deposits the gold, the many television cameras in the
Zurich bank take many pictures of her. When she later dials in and
uses the pseudonym "Clara," the bank can associate Clara with the
images (and other True Names data). Little is gained. None of the
"blinding" which is so elegant in Chaum's work (and recently described
by Hal Finney).

* The role of *gold* is tangential and secondary. Any stable currency
would suffice, and in fact gold bullion would be no more desirable
than yen or Deutschmarks.

* Also, how does this solve the problems of digital money (double
spending, transferrability, etc.) we've been talking about? After all,
there are still banks which allow "numbered" accounts (in
Lichtenstein, I hear), so this level of anonymity stil exists. And
where banking laws don't allow such numbered accounts, they likely
won't allow "gold bullion anonymous accounts."

* However, I have heard--as Stuart Card may have also--that "warehouse
receipts" could form the basis of a new type of bank. I don't know
anything beyond this, so maybe this idea could be developed.

--Tim May


-- 
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^756839 | Public Key: PGP and MailSafe available.
Note: I put time and money into writing this posting. I hope you enjoy it.