Re: Mostly offline digicash

[szabo@netcom.com (Nick Szabo)]

Mike Ingle:
> If someone swipes
> your digi-coins, they can spend them hundreds of times

For both the online and the mostly-offline system, only one
one or a small number of fraudulent coins can be spent without 
online detection.  Furthermore, digicash is much easier to lock 
up than cash; encrypt it with your secret key, following the normal 
procedure of keeping the secret key on a closely held floppy or 
smart card. 

> A few such heists could make
> people back away from digicash.

Why haven't people backed away from credit cards despite
$10's of billions in fraud?  Digital cash, implemented
reasonably well, is probably going to lose orders of
magnitude less to fraud per transaction than credit
cards.  The transaction costs may be much less than
the 3-7% cut taken by credit card companies.  One practical
task will be thorough debugging before implemented on large
scale, as there are plenty of people with  (a) an ideological
prejudice against cash that or (b) uncomfortable with their
lack of understanding of the protocols, who will jump on the 
opportunity to flame it.  (cf. current discussion on imp-interest 
with Detweiler & Co., for example).

Nick Szabo				szabo@netcom.com