Where is My Digital Cash?

LinuxTek asks: "Using the IBM commercial as a starting point (the one with the guy from DS9 asking about flying cars), I ask you, where is my digital cash? I remember a couple of years ago all the hype about digital money and several companies that were supposed to make a revolution in micropayment and 'secure' online purchase (i.e. anonymous). I remember Digicash as being one of the most promising companies, and I even remember downloading their digital wallet test app. It seems they went out of business and sold their patents to eCash, but now I can't even acces the eCash site. Does anyone know if there are other projects like this (still alive), and/or Open Source alternatives? Digital money should be a reality by now."

Comments

E-gold, E-bullion are better alternatives

[freddie]

The idea of completly electronic money seems to me is every bit as flawed as the fiat we use in day to day transactions, in the sense that there are no direct limits on how much money is generated.

When there are entities generating money out of nothing like the Fed, and engaging in fractional reserve banking, like regular banks, it forces normal people to speculate in order to preserve the value of their savings. When gold was used as money, money preserve its value and there had been little net inflation over the thousands of years that gold and silver were used as money.

Therefore it's better to migrate to some more stable alternatives that are 100% backed by gold. These currencies exist and can be used to buy anything that can be paid with a credit card.

Such as:
ebullion
egold

Re:E-gold, E-bullion are better alternatives

[Twirlip of the Mists]

Niven wrote an essay once called, "Yet Another Modest Proposal." It's collected in one or another of his books; I believe it's in my copy of All the Myriad Ways. In it, he pitched the idea of putting US currency on the uranium standard. Coins would be made of actual radioactive uranium, in concentrations proportional to their value.

The benefits would be legion. Counterfeiting would become a crime of the past, because anybody with a Geiger counter could tell if your scratch was genuine. And what better way to keep the economy going than to encourage the circulation of money?

Lends a whole new meaning to the phrase, "burning a hole in your pocket."

Re:Oh really?

[Twirlip of the Mists]

What does this digital money do that my regular money doesn't?

Excellent question. Banks are considered safe because they're insured by the FDIC, and because they've got a really good track record. Not to mention that it's just empirically hard to rob a bank. Credit, usually being an extension of a bank, is also very secure. People have problems with their credit accounts all the time, but that's nothing new, and there are well-established procedures for working out those problems.

I have a couple of cards in my wallet, and with them I can buy just about any product or service in real life, over the phone, or on the Internet. For managing my actual physical money, I log on to my bank's web site. As far as I'm concerned, "digital cash" is here.

Re:Who wants it?

[duffbeer703]

I have paper cash in my wallet. It is lightweight, accepted everywhere and there are no fees or auditing associated with it.

Online commerce isn't a new thing... for many years people have been transacting business from afar. The transmission protocol was called postal mail and the payment method was a draft or money order.

Online commerce only differs in it's speed.


You don't pay fees for regular cash because the government runs it- you pay taxes in order to use regular cash

Money isn't run by the government. The Federal Reserve System, a consortium of banks, is the issuer of the US dollar. The dollar is in turn backed by the faith and credit of the United States government. (Most nations have a similar scheme, or base their currency on the value of the US dollar)

You can use private currency, but nobody is obligated to accept this as payment. This is why Nordstrom will not accept a Macy's gift certificate. On the US dollar, you'll see the words "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE". If someone refuses to accept US currency to settle a debt in the US, the courts would discharge the debt.

Anonymous digital cash involves complex schemes of purchasing gold or some other commodity and then getting other people to use the private currency. The problem with anonymous eCash is the extremely high transaction costs (you basically pay $1.00 for $0.80). You money is also subject to rapid shifts in value as commodity prices change. Also, no eCash scheme is safe from a court subpeona.

Re:Who wants it?

[duffbeer703]

I disagree. If this scheme would work, someone would have implemented it already.

The problem with micropayments is the "micro" part.

If information is available for $0.05, the chance are that it isn't very important or valuable. Nobody wants to deal with the hassles of paying for content on a piece by piece basis.

You can sell valuable information. Many people pay $30/month to read the Wall Street Journal online. Others pay $5,000 a year to IBM to get support information for software or hardware.

$0.05 donations are even more ludicrous. Who is going to go through the hassle of setting up an account to voluntarily give some random person $0.05? Answer: Not enough to make it worthwhile.

Things like the Kuro5hin or Public Radio pledge campaign do work. The person in the next cubicle at work gave them $50 because they simply love the discussion there.

If a web publisher doesn't have a big enough community to support a pledge drive, then he either needs to swallow the costs, merge with someone or cease to exist.

Ever since the printing press came on the scene, small publishers have had it tough. The internet is certainly makes it cheaper to reach an audience and publish content, it doesn't eliminate costs. So small publishers will continue to fold when they cannot accept additional publishing costs.

Electronic transactions

[vegetablespork]

are going to be used by governments and corporations to eliminate the anonymity and untaxability associated with cash, not to duplicate it. In the wet dream of taxing entities, the $20 you pay the babysitter for watching your child on Friday night out at the movies will have income taxes taken off the top. (If the teenager doesn't happen to make enough to owe, s/he can file for a refund.)

Governments would love to tax these small, currently impractical to keep "on the books" transactions. What they will call digital cash will in reality be an EFT system in which every transaction is rigorously tracked, and will eventually supplant currency, making it impossible to opt out, save for barter.

Re:Screw the digital money...

[scsirob]

How about one of these ?

Mondex: Digital Cash scheme in the UK

[CompVisGuy]

I used to work for a company who designed vending machines, and they were involved in the Mondex scheme.

This was a really exciting idea:

i) Cash was to be carried on smart cards the same size as credit cards. Cash could be moved from the user's bank account to the card, or between individuals, by a range of technologies.

ii) Users would have a wallet, which was a small electronic device, just larger than the card. This let the users view how much cash their card had on it, and also had a simple calculator (doubling as a method of authenticating the owner of the card) with currency conversion built in.

iii) Payments could be made at point of sale by handing the card over and entering a PIN to authorise the cash transaction.

iv) Payments could be made remotely via telephone (this was all pre-WWW) by using special home telephones that had card readers built in. Again, payment authorisation was by PIN.

v) The name and other details of the owner of a particular card were encoded on it, so that lost cards could be returned to banks for sending back to the owners. People who found cards could not use the cash stored on it, or see how much cash was stored on it, and would be given a small reward for returning lost cards.

The scheme was trialled in a reasonably large UK town. Supermarkets and other stores etc. were set up with the infrastructure, people were given cards, wallets and telephones, and instructed to go about their business as normal, but using the digital cash.

Unfortunately, the scheme did not work. People did not understand the central concept behind the idea: Cash is an abstract idea -- it isn't really the coins and bank notes that we pass around -- these are just tokens, and electronic tokens could be used instead. The people of the town thought these cards were just credit cards and didn't understand the fundamental difference.

It is a real shame, as the idea was quite elegant in my opinion, and would have made for a much more secure, interoperable, convenient, private and manageable currency system.

I guess it is the average person's poor education and lack of deep thought about everyday things that scuppers such ideas. As technologists we can think up some truly wonderful, grounbreaking ideas, but in the end we need to convince the regular public about these ideas. But often, the everyday public don't really want to have to think.