From: hughes@ah.com (Eric Hughes)
Date: Thu, 5 May 94 07:13:28 PDT
To: cypherpunks@toad.com
Subject: Re:The Value of Money
In-Reply-To: <199405051258.IAA18871@zork.tiac.net>
Message-ID: <9405051411.AA04117@ah.com>
MIME-Version: 1.0
Content-Type: text/plain


>However, the
>next real step in that direction is to develop "securities" like money
>market instruments, which are denominated in an existing currency, but are
>"traded" not by institutions, but by people and/or business on the
>internet, in order to meet very real needs, like selling software,
>information, entertainment, etc.

Your Fidelity Mutual Fund account is denominated in dollars, held in
stocks, and clears through the ACH system.  Sounds pretty close to me.
Right now Fidelity nominally sells your stock when you withdraw and
buys more when you deposit (in practice they net their customers
against each other, I'm sure).  Suppose you write a 'check' (it's not
_really_ a check, just very close to one) on your Fidelity account and
someone else deposits it to their Fidelity account.  Fidelity can do
an "on-us" clearing of the check and it never leaves Fidelity's hands.
Only some accounting records have changed reflecting a change in the
distribution in funds.

Make this kind of transfer fully electronic and you have the
beginnings of a fully private currency.

Eric