digicash

[bdolan <71431.2564@CompuServe.COM>]

TO:    >internet:  cypherpunks@toad.com

Re. responses to my digicash proposal:

* The bank system (& feds) will know the original and ultimate
recipients.

True, but they can (& do sometimes) track this with the green pieces of
paper we use now.  With the system I propose, "they" cannot know anything
about all the (potentially many) transactions in between the original and 
ultimate recipients.

* Example about Alice getting digicash, paying Bob who pays Carol.  Alice
then "respends" the digicash password elsewhere before Carol can deposit
it.  

That's why each non-trusting recipient calls the bank to verify that
the password is still valid.  The non-trusting recipient then anonymously
receives a new password representing a claim on the money, preventing 
respending by a prior link in the chain.

Note that, if the payee *trusts* the payor, he can silently accept and pass 
on  ("spend") the claim password to another person - but he does so at his
own risk.

* Concerns that Escobar, Jr. could create a digi-bill, spend it, and the
feds might come claim the money from the ultimate recipient.

Escobar would want to use digi-bills already in circulation.  That way no one
could show they came from him.  Of course the government still could say that
the original recipient of the bill was a bad fellow and the ultimate recipient
(or intermediate posessor) should surrender the money.  

Having the original and ultimate accounts in banks somewhere other than the 
U.S. would help.  Having a non-fascist government would help, too.

* bank employee honesty problems

I don't see that this is more or less of a problem here than elsewhere.

bdolan        personal responses to bdolan@well.sf.ca.us, please