1994-05-04 - Re: Why Digital Cash is Not Being Used

Header Data

From: “Michael V. Caprio Jr.” <mikecap@WPI.EDU>
To: perry@imsi.com
Message Hash: 632f60e23fc4891758757541b8e5842772f142bd810190c292242f8476f09bba
Message ID: <199405041620.MAA04197@coyote.WPI.EDU>
Reply To: <9405041051.AA01062@snark.imsi.com>
UTC Datetime: 1994-05-04 16:23:30 UTC
Raw Date: Wed, 4 May 94 09:23:30 PDT

Raw message

From: "Michael V. Caprio Jr." <mikecap@WPI.EDU>
Date: Wed, 4 May 94 09:23:30 PDT
To: perry@imsi.com
Subject: Re: Why Digital Cash is Not Being Used
In-Reply-To: <9405041051.AA01062@snark.imsi.com>
Message-ID: <199405041620.MAA04197@coyote.WPI.EDU>
MIME-Version: 1.0
Content-Type: text/plain

Perry writes:
> Information is useless as a currency, for five reasons.
> 1) It is not fungible.
> 2) In order to demonstrate that you have it you generally speaking
>    have to have already given it away.
> 3) It can decay in value, unpredictably. My inside information that
>    Joe Blow is a communist spy is valuable today and might become
>    worthless tomorrow.
> 4) It cannot be effectively loaned or borrowed.
> 5) It has highly unpredictable value. Two pieces of information might
>    be worth the same number of pieces of gold from me, but you may
>    find one of them worthless and the other very worthwhile.

Hmm.  It seems to me that a bunch of these characteristics you've described
seem very similar to a stock market situation.  I would use the analogy of
information as shares...  It also seems that number two is a typical zero
knowledge situation - plus the fact that if I tell you I have a piece of
code that does x - you want the code, and knowing what it does has no real
value to you, if you just want it for its functionality.

BTW, what is fungible?  I've seen this term used several times, but have no
idea what it means.

> Dollars are a natural currency for use in internet trade. So are gold,
> D-Marks, Yen, etc. There is nothing wrong with these things.

> I'll agree that I don't like government sponsored currencies, but
> since everything is denominated in them right now I'd say that they
> are perfectly fine.

I think this is a key point - there has to be a common sponsoring agency,
a "data bank" or something that holds all the keys, and has all the info.
Making a currency isn't really the hard part here - someone could just 
encrypt a textfile that says "This is a five point cyphermark".  All that's
important is the key authentication at the bank, who will be the party who
trades it around ultimately - it's getting people to agree on it, and give it
value that's the issue...

Zen, philosopher-at-large