From: Steve Schear <azur@netcom.com>
Date: Sun, 10 Aug 1997 12:15:07 +0800
To: Vincent Cate <cypherpunks@toad.com
Subject: Re: uncensorable net based payment system?
In-Reply-To: <Pine.LNX.3.95.970731094524.8479A-100000@online.offshore.com.ai>
Message-ID: <v03102801b012ec9a5f93@[10.0.2.15]>
MIME-Version: 1.0
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At 10:14 AM -0400 7/31/97, Vincent Cate wrote:
>Adam Back <aba@dcs.ex.ac.uk> said:
>But you are right that it is an asset continually dropping in value, so
>it is an odd thing to back a currency with.  Would only want to keep
>enough money in it to do what you currently wanted to do, not as a long
>term investment.
>
>I could imaging just gradually increasing it so that $0.25 for 1 megabyte
>today became $0.25 for 1.1 megabytes in 3 months, or something like that.

Not very different from how one might handle a gold-denominated and backed
ecash coin.  Real gold must be stored in a repository which charges a
storage and handling fee.  This can integrated with the coin value by
applying a negative interest rate to the coin based on the epoch in which
the coin is issued.  So coins are redeemed at a lower than initial value
(assuming no change in the gold value figured in whatever unit it is being
exchanged).

--Steve