From: rah@shipwright.com (Robert Hettinga)
Date: Wed, 22 Jun 94 16:59:39 PDT
To: cypherpunks@toad.com
Subject: Re: e$: Geodesic Securities Markets
Message-ID: <199406222359.TAA04482@zork.tiac.net>
MIME-Version: 1.0
Content-Type: text/plain


Sandy Sandfort says

Me>>
|>> Oddly enough, an e$ certification scheme reverses that paradigm. The book
|>> entries disapear, the certificates proliferate, and the clearinghouse
|>> becomes a referee, "blessing" the trade.
>
>I don't think so.  The book entries still exist.  The book is the only
>place securities ever really exist.  E$ certificates--and even physical
>certificates--are nothing more than receipts evidencing ownership as
>defined by the book entry.  Remember, securities are "intangible" assets
>by definition.  (Ditto for dollars, yen, pounds and francs, by the way.)
>

Well, yes. You're right. In a sense.

However, in this scenario, it is possible for the clearing house to operate
more like a, since "referee" didn't work before, how about "notary", with
an official cc: to the security's issuer. The issuer could keep books, if
it was important (as Perry said a while back, the Feds would have to have a
"confirm", so someone would keep records of the transaction).  Of course,
the parties to the trade could keep their books, too.

On the other hand, if, like those famous asian anonymous equity markets we
heard about (from Eric?) there's no recording requirement (assume a
frictionless waterbed <g>), very interesting things can happen.  All the
new owners of the security care about is the ability to sell it later, or
collect interest from the payer of any interest, etc. All the sellers want
is cash.  My contention is that the sellers can get cash in a market by
presenting the e$-based certificate. Cashing out interest "coupons" from
the issuer happens in the same fashion.

Perry had a point a while back.  This is cryptography based, but not
cryptography, and most c-punks are probably skipping this thread. I'm
*really* interested in this stuff, and will talk to all comers about it,
off-line.  A couple of people have already sent me e-mail to start the ball
rolling...

Thanks,

Bob Hettinga

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