Re: ECON/NET: Network Economic Scheme

Mark Grant (
Wed, 8 Jan 1997 12:20:33 +0000

On Sun, 5 Jan 1997, Adam Foust wrote:

> Is there anything to this idea? Has it been proposed and
> shot down already?

You basically seem to be talking about digital cash, which has been
available on the Net for several years. The only difference is that in
your system multiple issuers would issue the same cash with a variable
exchange rate to the local currency, whereas the systems out there issue
different forms of digital cash to represent each foreign currency. I
don't think many people would trust your system as any ISP could issue an
infinite amount of cash without charging for it and undermine the entire
economy. With multiple currencies they would only harm themselves.

We tried to set up something like this with the original test cash that
Digicash issued; there was only one issuer and we created a market such
that people could bid to buy and sell their 'cyberbucks' for any real
currency that they desired. With more people in the market it might have
worked, but only a few transactions were reported. Even so, I suspect that
this is the way to go, with multiple currencies and multiple currency
exchange markets.

If you want to play around with digital cash, then look in 'Applied
Cryptography' or hunt down the 'Magic Money' software on the Net (if
nowhere else it's on under /pub/crypto). The software is
patent-infringing in numerous countries, but it will show you how these
things work.


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