From: Alan Penny <penny@tyrell.net>
Date: Wed, 23 Aug 95 21:15:32 PDT
To: cypherpunks@toad.com
Subject: Re: e$: The Book-Entry/Certificate Distinction
Message-ID: <199508240410.AA14034@tyrell.net>
MIME-Version: 1.0
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The other night I heard that some of the rules for selling stock have
been changed to allow companies to sell stock directly to investors.
I have been thinking that this may have the potential to support an
interesting system.

Imagine "Portfolio Accounts" with a debit-card like access method.
Instead of paying for an item at a store with money or credit you use
your Portfolio-Account card and buy the item with shares/micro-shares
of stock. Stock brokers may offer this type of service in response the
competition of companies bypassing them. Stock brokers could setup
services that mediate between transactions calculating trades and values
"on-the-fly" (anonymity could be tricky to build into this system).

If the company you worked for paid you with stock instead of money this
would complete the loop.

Portfolio Accounts could be "cashed out" but if they have all of the
attributes of money and don't suffer from inflation why not keep your
stock invested.

This also has the interesting feature of avoiding all taxes. Until you
"cash out" your account you would not have to pay taxes, if you never
need cash out your account, you never need to pay taxes. I suspect that
our friendly governments would try to "correct" this "problem" in the
long run if they can.

Steven Weller writes:

[snip]
> 
> In such a system, where does credit come in? If I have a certificate that
> is worth X, then does the recipient know that it's from my "credit card"?
> How do I obtain credit, and in what form does it exist?
>

Could credit be supported by distributed futures market system?

> 
> Furthermore, how do we assess the value of real physical things in a system
> like this?

If you had a stock transaction mediated economy the "currency" in this
system would be backed buy the goods and services produced by companies
issuing stock.

You could view stock in this system as private currencies, and there
would be thousands of competing currencies.

I have been thinking that this might be a viable path to denationalized
currencies.

Stock certificates could be based on crytographic verification protocols.
If all the stock in this system were 'bearer-based' (i.e., you posess it you
own it) you could also support cash-like anonymity as well.

>
> 
> --
> Steven Weller  <Windsor Consulting Group>         +1 502 454 0054 (voice)
> OS-9 Consultancy and Software                       +1 502 451 5935 (fax)
> Finger for public key    00 02 3C 2F 83 76 D3 77  2A 95 E8 90 94 9A 9D 74
> http://iglou.com/windsorgrp   stevenw@iglou.com or realtime@well.sf.ca.us
> 
>

Cordially,

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[                   Alan Penny, penny@tyrell.net                          ]