From: fnerd@smds.com (FutureNerd Steve Witham)
Date: Fri, 22 Jul 94 12:57:35 PDT
To: cypherpunks@toad.com
Subject: Re: Small transaction amounts
Message-ID: <9407221954.AA14906@smds.com>
MIME-Version: 1.0
Content-Type: text/plain


Eric speaks of the two kinds of electronic money systems--
closed ones where crypto doesn't have to be done because the system
guarantees security, and open ones where crypto has to be used.

> The closure, however, of these systems means that they don't scale.
> That's bad, fatal, in fact.  That doesn't mean that closed systems
> will disappear, merely that the largest systems must be open.
> 
> What is desirable economically is that the boundary between closed
> clearance systems and open clearance systems be porous enough that the
> market can find an optimal distribution between the two varieties.

Right...I think.  What has to scale is the "semantics of money."
Within a small area ("box"), security is guaranteed by how the enclosing
system works, and over a larger area it's done by crypto (*).  But
for the programs, the difference is transparent, except for a cost
that resembles communications cost.

(*) There's also an issue of, "Can that box over there guarantee me
that I can run programs securely within it?"  There are ways to
do this with tamperproof boxes and such.  Or looser ways to do it
with reputations.

-fnerd
- - - - - - - - - - - - - - -
nutritional information per serving:
   less than one (1) bit
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