From: tcmay@netcom.com (Timothy C. May)
Date: Wed, 4 May 94 12:44:47 PDT
To: Cypherpunks@toad.com
Subject: DigiCash can use whatever currencies are valued
Message-ID: <199405041945.MAA08668@netcom.netcom.com>
MIME-Version: 1.0
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As Perry and Eric and others have noted, schemes for digital cash are
primarily a transaction mechanism, and not a new currency unto themselves.

Transfers, accounts, payments, all the usual stuff.

However, the strong crypto used allows more flexibility in bypassing normal
currency rules and can allow users to mutually agree on whatever currency
they wish. (This is in large part already possible, for some folks, in the
international markets, the Eurodollar markets, etc. It's one of the things
that keeps countries in line. Duncan Frissell and others have elaborated on
this market mechanism.)

Just as in Havana, the U.S. dollar is the de facto hard currency unit, so
too could future digicash transactions be based on the Latvian luble, the
Qatarese marq, or the Cyberian cyphertaler. Or on a market basket of such
currencies. Or on uranium futures. Whatever the parties to a transaction
agree on.

(Obviously the usual Cypherpunkish issues of market forces, trust,
reputation, escrow, etc., enter in here. How the dollar comes to have a
"value" that is worth, say, 5 pounds of bananas to some merchant, while the
officially supported Cuban peso is worth, say, half a banana peel, is a
complicated and "emergent" thing. It's complicated, but was understandable
to Saddam's ancestors in the markets of Babylon thousands of years ago.
Enough said.)

The prospects for breaking open these financial markets even further is
breathtaking. Of course, it won't be easy. More than some casual
programming will be needed. I don't expect folks on this list to pull this
off all by themselves. Some may.

--Tim May

..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets,
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^859433 | Public Key: PGP and MailSafe available.
"National borders are just speed bumps on the information superhighway."