From: pcw@access.digex.net (Peter Wayner)
Date: Wed, 28 Feb 1996 17:11:43 +0800
To: cypherpunks@toad.com
Subject: What's this "Digital Cash" stuff...
Message-ID: <v02140b05ad5940d763c8@[199.125.128.5]>
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Of course, I'm guilty of confusing the topic because I talked
about credit and debit cards in a book with the title "Digital
Cash." Sorry about that.

But I think the whole debate is really pretty confusing. Real
"cash", i.e. Federal Reserve Notes, are pretty traceable.
They've got serial numbers on them. If it was practical to
require everyone to keep a log book of serial numbers, someone
could really track the flow of currency throughout the economy.
Note that serial numbers aren't that important for paper
currency because the physical difficulty of finding a good
printing press is supposed to prevent counterfeitting. Digital
"cash" requires the serial numbers to prevent copying. (Everyone
should read today's NYT article on the counterfeits.) So I would
argue that Fed. Reserve notes aren't "cash" either. It's only a
matter of time before FinCen starts requiring everyone to report
every serial number.

But while I think Tim's point is well taken and essentially
correct, we should remember that "cash" is term that also often
means immediately negotiable. For instance, many people who need
to trade large amounts will trade T-bills. These pieces of paper
pay interest! In other circumstances, bringing a cashier's check
is what people mean when they talk about "paying in cash." A
real estate buyer who actually showed up at a closing with
$300,000 in $100 bills would be pretty unpopular, even if he
said he was going to pay in "cash".

So, I guess it's all just a question of semantics. But that's
life on the Information Super highway where it may just be
illegal to run the "finger" protocol.

-Peter