From: "Patiwat Panurach  (akira rising)" <pati@ipied.tu.ac.th>
Date: Thu, 18 Jan 1996 19:37:58 +0800
To: "Alexander 'Sasha' Chislenko" <sasha1@netcom.com>
Subject: Re: underground digital economy
In-Reply-To: <2.2.32.19960118010840.00e13e78@netcom.com>
Message-ID: <Pine.SUN.3.91.960118181949.11798A-100000@ipied>
MIME-Version: 1.0
Content-Type: text/plain


On Wed, 17 Jan 1996, Alexander 'Sasha' Chislenko wrote:

>   If you sell a new version of CryptoDoom for digicash, and would like to
> buy a car that is only sold for paper money, and I have a car to sell and
> want to buy your CryptoDoom, *somewhere* in the market there will appear
> an exchange agent that would help us complete the transaction. In the
> case of parallel digital currencies this exchange market would be very
> liquid because of the high speed, low cost, and security/privacy of the
> transactions.

This model isn't as practical as it seems.  For one thing, it is a classic
case of barter: exchange for things that you want but don't have.  This
becomes extremely difficult with specialization.  Letsay I make only
CryptoDoom, its the only thing that I have the skills to make.  The things
that I want but can't produce each day are numerous: food, transport,
housing, ad infinitum.  One-to-one barter is only usefull if both agents
(in a 2 agent economy) need only 2 goods and specialize.

This is the root of money: a means of exchange between heterogenous
products.  Allthough a parallel digital internetwork would allow
occasional barters to increase there viability, it does not mean that
barter will replace money.  But there's some ambiguity here: What is
implied by "The case of parallel digital currencies this exchange market
would...."?  Does this recomend exchange markets (barter) or fiat
(currency)? 

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Patiwat Panurach      	     Whatever you can do, or dream you can, begin it.
eMAIL: pati@ipied.tu.ac.th      Boldness has genius, power and magic in it.
m/18 junior Fac of Economics		-Johann W.Von Goethe
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