From: Hal <hfinney@shell.portal.com>
Date: Sun, 21 Aug 94 14:24:36 PDT
To: cypherpunks@toad.com
Subject: Re: In Search of Genuine DigiCash
In-Reply-To: <199408211918.PAA21612@zork.tiac.net>
Message-ID: <199408212124.OAA21988@jobe.shell.portal.com>
MIME-Version: 1.0
Content-Type: text/plain


rah@shipwright.com (Robert Hettinga) writes:

>We could equivocate back and forth about who the lender is in this case.
>It's the behavior of the financial instrument I'm talking about. At some
>point, the principal goes away and has to be called from wherever it is (a
>bank account, the money market, etc.) to meet a cashed-out piece of
>digicash. In the meantime it earns interest. Thus it has principal, and
>interest, and it is called.  It's a callable bond.

Well, I still don't follow this analogy.  By this reasoning virtually every
commodity that someone is willing to buy and sell is a callable bond.  The
local gold dealer may sell me gold coins for cash, take the cash, put it in
the bank and collect interest, then buy my coins back from me later.  Is the
gold a bond?  Am I "calling in my bond" when I sell the gold to him?  I don't
get it.

Re interest-bearing cash:
>I think the complexity is probably not worth it. Suppose you get a piece of
>digital cash that's been out there a while, say 10 years (it's not likely,
>ever, but I'm using it to make a point).  1 dollar at say 10% compounded
>for ten years is 2.59. It's like winning the lottery, for no reason except
>the person you last transacted business with paid you old cash for what you
>sold him. It's not fair. That's what I meant by not fair.

Let's see, I'm selling spindles for $2.59 and you come up with a piece of
ecash you bought ten years ago for $1.00, which is now worth $2.59, and I
sell my spindle to you for it.  I deposit the cash in the bank and it's worth
$2.59.  Now who isn't this fair to?  How is it different from you putting
$1.00 into your interest-bearing checking account ten years ago and writing
me a check for $2.59 today, the amount your $1.00 grew to?

Sorry, I guess I'm missing a lot of your points.

Hal