From: jrochkin@cs.oberlin.edu (Jonathan Rochkind)
Date: Fri, 20 Jan 95 16:32:04 PST
To: cypherpunks@toad.com
Subject: Re: Why emoney?  Why not a web of debt?
Message-ID: <ab46056806021004ab8a@[132.162.201.201]>
MIME-Version: 1.0
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At 6:54 PM 01/20/95, anonymous-remailer@shell.portal.com wrote:
>  But electronic computers are good at checking out these kinds of
>chains automatically.  Suppose there were a web of debt-trust.  Each
>person would indicate the other people who's iou's they will accept
>(and the amount they would be willing to take).  Thus I might take (up
>to $10 of) Jo's, who might take Carol's who might take Terry's, etc.
>
>  To buy something from me online, you will need to produce an IOU
>from Jo, Carol or Terry.  I would hand it to Jo for verification.  Jo
>would accept it or reject it (perhaps after talking to some other
>folks online).  If it were a CarolIOU, or a TerryIOU I would insist Jo
>trade it for a JoIOU.  All the details could be hidden behind a nice
>little GUI.

Certainly, that's what money is after all. Pretty much.  But how are you
going to transfer these IOUs electronically in a way that is relatively
fraud-proof?  Digital money.  Ecash.  When we say "ecash", we're talking
about what Chaum was writing about in whatever paper, what Schneier
describes protocols for in AC.
Maybe the ecash is redeemable in US dollars, or maybe it's redeemable for
10 units of service from Jon Smith, but an ecash protocol is what you are
going to use to transfer and issue those digital certificates of value,
whatever the value represents.

And of course, if you want to use these certificates of value anonymously,
which is what is required to pay for an anon remailer, there are some
slightly more stringent requirements. The right kind of ecash protocol can
still handle it.  But Carol probably shouldn't be paying for a remailer in
CarolBucks (or CarolIOUs, whatever), at least not unless Carol is such a
big spender that CarolBucks are in wide circulation and used by lots of
people other then Carol.  Which I guess is possible in your system.

A pseudo-anarchist non-state-supported debt system would work fine, but you
still need a mechanism to transfer your certificates of value, whether they
stand for ten U.S. dollars, or 10 hours that Jon Smith will work mowing
your lawn.  And another way to look at it is that you are just proposing an
ecash system where every person issues their own ecash, instead of just a
few central banks doing it.  There are advantages and disadvantages to that
sort of thing, and it might be something interesting to think about, but
you ultimately aren't going to be able to do it over a computer network
without ecash.  Ecash is the way you represent value certificates in
digital form, pretty much.