From: anonymous-remailer@shell.portal.com
Date: Wed, 7 Dec 94 06:47:34 PST
To: cypherpunks@toad.com
Subject: BACKING E$
Message-ID: <199412071447.GAA06381@jobe.shell.portal.com>
MIME-Version: 1.0
Content-Type: text/plain


Sun, 4 Dec 1994, Jim McCoy wrote:

MC|IAs far as a real system goes, you will never see on running on a machine
  |in the US in the near future; in addition to the regulatory BS involved in
  |making magic money useful you would run into all kinds of wonderful
  |gambling laws and regulation.

Which is why the digital money with the most chance of succeeding will
be cyber-marks, -francs or -pounds, not cyber-dollars.   Work with the
currency of a country with fewer regulatory agencies.   The chances of
being allowed to stay in business increase directly as the number of
government witchhunters decrease.

Personal note here: in the past, I have been involved in several anti-
govt ventures, always with a view to altering the status quo in favor
of freedom fighters and kindred spirits.  Some are still going strong,
others have been victims of harrassment and even in some cases raids..

Of the unsucccesful ventures  -  the ones that were closed down by Big
Brother Sam  -  the true reason has always been that we were too smart
and getting away with whatever we were doing at the time.  So instead,
govt found some bogus charge to shut us down with. (In one of the cases
they bombed us with orchestrated tax audits, one after another. Later,
we were hit with Willful Failure to File something new they called an
Environmental Impact Report; this was in a case of knocking down a
storage shed!  If you think this is "BS", get the last case: On TV,
we had an associate promise a free bonus gift to the first 100 callers
to a promotion.  Upon shipping, we decided to give away the free bonus
to *all* callers, a few thousand all told.  This amounted to felonies
of fraud, mail fraud and enough to put our associate away for up to 10.

Of the succesful ventures, all have had one thing in common: they have
been headquartered abroad.  Our people there have had both Scotland Yard
and Dutch police look over the operations, always on the request of the
Americans.  We have even had an Inland Revenue investigation, requested
by the IRS.  In all cases, the govt went away empty handed and as good
friends  -  agents even apologized for the inconvenience.  Their word to
their U.S. colleagues: "We will not shut down someone who is not doing
anything illegal.  We may not agree with their political aims, but this
in itself is insufficient basis for prosecution."

ObCrypto: Anarcho-capitalists take note here,

1. In the U.S., the totality of federal regulations now comes to 202
volumes numbering 131,803 pages.  "They" can *always* find something in
there to shut you down with.  Their aim is to seize what you have and
put you out of business because you are not giving in to their demands.

2. Abroad, regulations are oftentimes of the common sense variety. If you
are a crook, you can and will be shut down.  But if  - like me - you are
honest, hardworking and just happen to not agree with U.S. policies of
oppression, then you will be free to run your affairs as you see fit.

3. If the operator of a succesful digital cash currency achieves for his
money more than play-money status, he will be intimidated into providing
traceability.  Sorry: there is no way he can insulate himself even with
prior legal briefs and a team of top lawyers.  I have been through it
personally.  We even had a bank in the seventies.  If the bureaucrats
target you, they *will* get you.  Sure, you can fight.  You won't win.

Conclusion:

I only see 'untouchable' digital cash of having integrity and a decent
rate of survival if based abroad.
Personal experience tells me that it should be pegged to the pound
sterling.

A futuristic twist with more widespread appeal to non-Europeans would be
to peg it to the ECU although marketing could be tough this side of the
common currency (year 2000?).  If pegged to the ecu, HQ should still
be in London.  Have James Capel or some such handle the escrow account
to guarantee real-money backing and -conversion.  Individual accounts
can be located anywhere and should stay out of mainland U.K.

Sorry for the length of this post.  Early choices now could mean the
difference between future success and the alternative: headaches + the
eventual inevitable caving in.


"Capt'n Bob"


Am still looking for a pseudonymous address.  Suggestions welcome.