From: tcmay@netcom.com (Timothy C. May)
Date: Sun, 28 Aug 94 12:53:12 PDT
To: "Rick H. Wesson" <wessorh@ar.com>
Subject: Is Off-Line Digital Cash Dead?
Message-ID: <199408281952.MAA07916@netcom14.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain



Rick Wesson wrote:

>It seems that off-line cash is dead or so the latest posts assure me,
>is there a way to incorporate some of the anonymity with off-line cash
>into on-line cash?
>

Off-line cash is not dead. I just expressed several reasons why on-line
cash has market advantages (immediate clearing, no repudiation, and thus
greater value in a Gresham's Law sense) and some disadvantages (connection
to clearinghouse).

Which systems will win out, and how, is unclear. As in most
economic/ecologic matters, expect multiple solutions.

But I do think the arguments strongly favor "immediate" clearing, which
means either on-line clearing (Alice confirms that money has moved, albeit
distantly) or pure cash (conventional). Off-line clearing that relies on
trusted observer protocols, and that may allow later repudiation ("that
wasn't me--give me my money back"), seems at a disadvantage. (If off-line
cash has a cost in terms of not clearing immediately, and even allowing
ways to break anonymity--perhaps via repudiation, in some proposals--then
it will be 'devalued" relative to "hard currencies" that clear immediately,
untraceably, and irrevocably.)

That you, Rick, are having coding problems is no great surprise. Despite
what some folks are saying here, this is still a research issue. Lots of
stuff yet to explore.

(Yes, I may be proved wrong when these enthusiasts open their doors at
First Digital, but such is life. Having invested in companies before, and
knowing something about what to look for in terms of cash flow, burn rates,
expectations of actually starting to sell (as opposed to burning money
doing research), I wouldn't put a *dime* into a startup to do digital cash
*at this time*. This is not to say enthusiasts and researchers should not
pursue this. After all, what better way to be prepared to get jobs or start
companies in this area when the time *is* ripe? But don't expect many
investors to fund a blue sky research startup.)

I expect I'll have more to say on these various points. My Netcom account,
as about 50 of you Netcommies certainly also know, is delaying mail by up
to a day. (They have 30,000+ account names in the file that has to be
opened, searched, appended to, etc., each and every time a piece of mail
arrives....things fell apart suddenly and now they are revamping the
account strucure, which may take several more weeks to fix.)

So expect some delays and/or completely missing responses from me.

--Tim May

..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
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W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^859433 | Public Key: PGP and MailSafe available.
"National borders are just speed bumps on the information superhighway."