Digicash question

[bdolan <71431.2564@CompuServe.COM>]

TO:     >internet:  cypherpunks@toad.com

Forgive me for a newbie question.  Why wouldn't the following inelegant
idea work?

X gives $101 to First Digital Bank, which gives X a PGP-signed password
representing a claim on $100 (or maybe they would do this just for the
"float").  X gives the $100 password to Y, in exchange for a narco-terrorism
decoder ring.  Y, being a cautious soul, calls First DigiBank immediately 
and gives it the password.  DigiBank pockets $1 and issues Y a new signed 
password good for $99.  Note that DigiBank (1) doesn't need to know who Y 
is and (2) ensures that a given money-password is only spent once.  By the
same method, Y can pay Z and Z can deposit the credit in BillnHill's S&L for
settlement.  Or the money can keep floating around until DigiBank gets it 
all, which is what usually happens now ;-)

Of course, you have to trust the bank - but you have to now, also.

Don't abuse me too much.  Just point me to the right FAQ (...cowering...)

bdolan@well.sf.ca.us