1994-02-19 - RE: MONEY: cryptocash is transaction money

Header Data

From: “Pat Farrell” <pfarrell@netcom.com>
To: cypherpunks@toad.com
Message Hash: fc984c12fe717eb37076b3a6cab91b2f2ed58837986bed11612d8aa26ef9009b
Message ID: <42900.pfarrell@netcom.com>
Reply To: N/A
UTC Datetime: 1994-02-19 16:56:34 UTC
Raw Date: Sat, 19 Feb 94 08:56:34 PST

Raw message

From: "Pat Farrell" <pfarrell@netcom.com>
Date: Sat, 19 Feb 94 08:56:34 PST
To: cypherpunks@toad.com
Subject: RE: MONEY: cryptocash is transaction money
Message-ID: <42900.pfarrell@netcom.com>
MIME-Version: 1.0
Content-Type: text/plain

In message Thu, 17 Feb 94 12:41:00 -0800, hughes@ah.com (Eric Hughes)  writes:

> I've been getting questions about digital money lately which indicate
> a basic misunderstanding of its most important feature.  Crypto cash
> is a way of moving money, not a way of holding money.
> Crypto cash is like a check or a note rather than like the dollar,
> franc, or mark.  Crypto cash is a way of increasing one person's
> balance and decreasing someone else's balance.
> Since it's not a currency, it's not sensible to talk about its
> exchange rates.  Digital money can be denominated in any currency you
> like, so long as you have a bank or other financial institution to
> handle it for you.
> This is only an obvious distinction if you already know it.  "Money"
> is such an overloaded word that it's easy to get confused.
> If this isn't clear, _please_ let me clarify.  If you don't get this,
> none of the rest of the digital money discourse will be
> understandable.

I've been following the digital money issues here for quite some time,
and I do not understand this distinction at all. Sandy said essentially the
same thing in different words, and that too was beyond me.

Except for tangible money (i.e. 99.99% pure gold coins) I don't see that
any money is anything other than a mutially agreed upon way of moving
"barter tokens" between folks. Sometime the government (or Fed) can define
the true value of the barter tokens, and othertimes their attempts fail.
When the attempt fail, the usual course is to have a "devaluation" that
reflects market realities.

I don't see how digital money is fundamentally different than
private bank notes that were common in the US in the last century. They are
good if they are accepted, and useless if not.

If this is really a critical distinction, since I don't see it, I'd
appreciate a more concrete explaination.


Pat Farrell      Grad Student                 pfarrell@gmu.edu
Department of Computer Science    George Mason University, Fairfax, VA
Public key availble via finger          #include <standard.disclaimer>