From: "Istvan Oszaraz von Keszi" <vkisosza@acs.ucalgary.ca>
Date: Tue, 17 May 94 12:30:41 PDT
To: hughes@ah.com (Eric Hughes)
Subject: Re: Makeing MagicMoney worth something.
In-Reply-To: <9405171709.AA04301@ah.com>
Message-ID: <9405171933.AA71221@acs5.acs.ucalgary.ca>
MIME-Version: 1.0
Content-Type: text/plain



First I'd like to announce that I'm back on the list.
Guess all the xcitement is over, huh?

--

Eric Hughes wrote:

> 
>    And suppose that I promised, on the net via a signed
>    message, to trade MM coins for dolars.  [...]
> 
>      I don't belive I would be running a bank: I would maintain no
>    deposits for anyone other than myself.  
> 
> Nope.  You're a bank in this case.  A bank is someone who accepts
> demand deposits, that is, money they give to you which you give them
> back when they want it.  It matters not how the value is stored.  The
> large banks store their value in bank accounts at the Federal Reserve.

I'll interject here.  You are not a bank, if you structure
yourself correctly.  What you are, is someone who is issuing
redeemable notes.  Or alternatively you are a trustee.  If I gave
money to my escrow agent, to be paid to me when I want it, she
would not be a bank.  And if you'll pardon me if someone has
missed this, (I have been absent for a bit), but the key element
in all of these matters is jurisdiction.  Who regulates all 
of this?

The answer of course is no one.  The idea of adding value to
money is very good.  But the methodology which should be utilized
is to have value added in one jurisdiction while redemption is in
another.  The actual storage of value could be in a third.  This
is the underlying mechanics.  BUT, THE LOCATION OF THE BANK is
nowhere, since it is in cyberspace (gads, I HATE that word).
Unfortunately, too many people are focusing on the net as a way
of communicating between locations rather than as an organism
unto itself.  

Let me give a quick example.  How difficult would it be to use a
system of anonymous remailers, as a large scale machine.  Each
mailer uses it's latency to communicate it's bit.  True each, bit
is on a physical machine as an electronic impulse, but that bit
is meaning less.  It is indistinguishable from any other.  This
would mean that the bank, would be everywhere simultaneously,
without being anywhere at all.  It shouldn't be too difficult to
ensure that no bit is critical, and that each bit is expendable

Comments anyone.  

--

Istvan