From: dat@spock.ebt.com (David Taffs)
Date: Tue, 3 May 94 18:24:31 PDT
To: perry@imsi.com
Subject: Re: Why Digital Cash is Not Being Used
In-Reply-To: <9405032243.AA00401@snark.imsi.com>
Message-ID: <9405040122.AA05674@helpmann.ebt.com>
MIME-Version: 1.0
Content-Type: text/plain



   From: "Perry E. Metzger" <perry@snark.imsi.com>

   Jim Miller says:
   > 
   > Michael V. Caprio Jr. asks:
   > 
   > > So what is the natural currency to trade in on the Internet?
   > 

   ...

   The natural currency today is the U.S. Dollar, as transfered via
   digicash.

   Perry

It seems that ciphercash schemes, aka banks, might have cash deposits
to invest. The interest on these investments might help cover the
transaction costs. The value of the ciphercash might ought to be able
to rise and fall (slightly, perhaps dramatically occassionally) with
the performance of these investments.

How about a floating cipherdollar? Holders of cipherdollars would
share in the proceeds of the investment, minus real transaction costs
and overhead, plus transaction fees if any.  How much they were worth
would depend on how long they were kept, the fee structure, etc.

In other words, I'm saying that it might be easier to let the value
float slightly (with a current, published conversion rate into the
currency of your choice) than to peg it exactly at any particular
value. If it turns out that a lot of people buy the things and keep
them for a long time, it would be nice for them to increase in value
(compared to our friend the US $) as a hedge against inflation.

Of course, I'm merely suggesting competent money management here by
the bank, not that anyone (except cypherzealots, of course) would
deliberately invest this way. Sort of like interest on your checking
account.

A similar (more radical) scheme would equate one cipherbuck == one
share of stock in the cyberbank, redeemable at whatever the stock
is currently selling for (approximately).

I might like safeguards of some sort, if feasible, to prevent the
bank officers from absconding with the loot...

-- 
dat@ebt.com (David Taffs)