Re: bearer = anonymous = freedom to contract

[Robert Hettinga <rah@shipwright.com>]

At 4:36 PM -0500 on 2/16/99, Ben Laurie wrote:


> Perhaps I'm being dim,

You, of all people, are not dim, Ben. :-).

> but I can't see any difference between these
> boxes of yours and what Kawika calls a "bank".

Certainly, there's a financial difference, and so who owns those boxes is a
material consideration.

In certain jurisdictions, anyway. :-).

Seriously, the box, or more properly the owner of the box, is of course, a
financial intermediary. It owns assets on behalf of the certificate
holders, who, in the case of cash, can redeem those certificates for the
assets in question on demand. For this, the intermediary gets paid in fees
(hopefully front-loaded, like traveller's checks, or merchants wouldn't
accept them so readily) and interest on the reserve assets backing up the
certificates outstanding.

The reserve assets, of course, are held by a trustee. A bank. Someday the
trustt might not be an actual bank of deposit. But since this kind of thing
could be done by a business like State Street Bank, who does this all the
time for mutual fund companies like Fidelity (who we can't call a bank on
this side of the pond, see jurisdiction joke, above), or, more properly, a
bond underwriter like Morgan Stanley Dean Witter, who we still can't really
call a bank even though we all know who Mr. Morgan's father was.

Frankly, I think that underwriters will operate more like the owners of
those third-part ATM machines found in American convenience stores.
Remember that the original digicash mint was a 486.

However, a MicroMint machine, say, would have to be big, and fast, and
expensive, in order to generate all those hash collisions cheaply enough.
Cryptographers even know how much this machine costs, already.

Any clearer?

Cheers,
Robert Hettinga



-----------------
Robert A. Hettinga <mailto: rah@philodox.com>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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