From: "Michael V. Caprio Jr." <mikecap@WPI.EDU>
Date: Tue, 3 May 94 14:11:12 PDT
To: tcmay@netcom.com (Timothy C. May)
Subject: Re: Why Digital Cash is Not Being Used
In-Reply-To: <199405031848.LAA13081@netcom.netcom.com>
Message-ID: <199405032110.RAA23590@hikita.WPI.EDU>
MIME-Version: 1.0
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[tim writes:]
> I. Why is Magic Money/Tack Tokens, in particular, not being more widely used?

> - Nothing of significance on the List to buy, hence no incentive to learn
> how MM works. (Just because someone announces that their new article is
> available for 10 Tacky Tokens doesn't a demand make!)

> - Semantic gap. I confess to not having the foggiest ideas of how to go
> about acquiring Tacky Tokens, how to send them to other people, how to
> redeem them (and for what), etc. Having nothing to buy (no need), and
> plenty of things to occupy my time, I've had no interest in looking at MM.

> - as others have noted recently (and this is a well-known issue),
> alternative currencies must offer some advantage over existing currencies,
> or at least be roughly on a par with them.


So what is the natural currency to trade in on the Internet?  What is the
medium that is most widely spread across the myriad nodes and networks that
crisscross the globe?  What would someone like to be able to buy, that is easy
to acquire, and offers an advantage over real money?

The answer is quite simple:  information.  We need to find a way to trade in,
and subsequently value, information.  At first blush, this seems an impossible
task, and one that is highly subjective and prone to failure on an individual
level... but in a large enough group of people, there has to be a consensus on
the average value of a 'ware' of information.

Say I have a piece of code that you do not have, that you would like to get
from me - maybe it's something that I've written, or isn't publicly acessible
everywhere on the net.  I tell you that my code is worth 50 wares of digital
money; I have my own signature on the code that signifies that it's mine.
We agree, and exchange currency - Bob gives me 50 wares (with his signature
stripped from them), and I give him my code, with my signature removed.

So what's to stop Bob from replicating it and giving it to all his friends?
Well, bascially, that would devalue the 'ware cost' of the code.  If everyone
has it, it's hardly scarce, and therefore, not economically viable.

Any thoughts?  This is a pretty hefty topic, and I don't have the time to go
into it more just yet... I hope I've given some food for thought.


Zen, philosopher-at-large