From: wcs@anchor.ho.att.com (bill.stewart@pleasantonca.ncr.com +1-510-484-6204)
Date: Tue, 3 May 94 09:37:31 PDT
To: cypherpunks@toad.com
Subject: Re:  Virtual Cash
Message-ID: <9405031636.AA19943@anchor.ho.att.com>
MIME-Version: 1.0
Content-Type: text/plain


> >[...] but noone (as far as I've seen)
> >has come up with an "economic model" within which they could use them.
> 
> Denominate digital money in dollars in a demand deposit account in a
> US bank.
> Why reinvent the wheel, or, in this case, the unit of value?

The two common models are either to denominate private currency in some 
convertable currency, like dollars or rubles (useful for providers
of financial services trying to add digicash to their services),
or for a service provider to denominate digicash in some unit of their
service, e.g. subway trips, road tolls, phone calls, email shuffles.
The latter approach is easier to bootstrap (the service provider
can just do it, there's no problem with learning banking laws, etc.),
but it's less convertible unless lots of people want the service,
so it tends to be localized use.