Digital Money

[m5@vail.tivoli.com (Mike McNally)]

Mike Duvos writes:
 > Since the issuing agency, usually a government, is
 > presumed to exercise prudent financial management to prevent the
 > currency's value from decreasing, and is likely to be around for a
 > long time, such cash can be hoarded with little risk.

You seem to have a much different notion of "risk" than I do...

 > Digital banknotes issued by a national government should be just as
 > good as physical banknotes printed by a national government.

Indeed, if national governments were in the business of issuing
digital "notes", then such instruments would be essentially equivalent
to cash.  However, I'm not sure if the mechanism of issuance can be
made the same as that of physical cash; is there a protocol that does
not require a two-way transaction to get the digicash?  (Physical cash
is one way; the money is printed and then essentially just handed out.
It doesn't matter who gets what bill.)

 > But given an issuing institution of unquestionable trust, there should
 > be no significant difference between digital cash and real cash, and
 > storing it for indefinite amounts of time on a floppy in your pocket
 > should be completely risk-free.

Is storing a $20 US bill in your pocket for indefinite amounts of time
really "risk free"?  How about 20 Chilean pesos?  20 rubles?

(No, digital cash is no better or worse.)

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