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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."
I have paper cash in my wallet. It is lightweight, accepted everywhere and there are no fees or auditing associated with it.
With eCash, I'll invariably be paying fees for using my money and whomever is running the system & the government will be able to track or audit my activity.
If you don't want to carry cash, call American Express and get a credit or charge card.
Conformity is the jailer of freedom and enemy of growth. -JFK
e-gold is still going strong. Just like in Cryptonomicon, only without quite so many stupendous badasses.
We could all just email IOU's to eachother...
Oh! Ooh!
Please send royalty payments via check or money order to...
Where is My Digital Cash?
It got stolen by hackers. Sorry.
I ask you, where is my digital cash?
REQUEST FOR URGENT BUSINESS RELATIONSHIP
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IN MY COUNTRY, I AM THE FORMER MINISTER OF DIGITAL CASH, A CHANGE IN GOVERNMENTS HAS LEFT US WITH 30 GIGABYTES (GB) OF eCASH. IF YOU ARE WILLING TO ASSIST US IN DOWNLOAD IT, I WILL GIVE YOU 10% (3 GB) OF eCASH.
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Opinions on the Twiddler2 hand-held keyboard?
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
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.
I write in my journal
Where were you and you when I had mod points two days ago? Folks, if you don't even know what digital money is, don't bother posting your ill-informed opinions!
:)
The problem to date, dear Ask Slashdotter, is that no digital money company has been able to get their heads out of their technology centered asses and talk to their customers. They would rather put together a presentation that talks about public key cryptography and e-wallets, than actually talk about the benefits to the consumer. PayPal is leading the way because they 1) didn't create a new currency and 2) worked with a paradigm that everyone understands: bank accounts.
What should happen now is that digital money companies should create a product that uses cryptography and all those groovy things and links into systems like PayPal. When digital money companies start talking about what the customer gets out of it, then we'll get somewhere.
On a similar note, what does the customer get out of a flying car?
How we know is more important than what we know.
What does this digital money do that my regular money doesn't?
If you're comparing digital cash to online credit card transactions, then the difference is that digital cash is anonymous and irrepudiable.
If you're comparing digital cash to cold cash, then the difference is that cold cash requires you to be in the same meatspace as the other transactee. Whereas digital cash can be spent online over the net, or offline face to face.
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. ... As far as I'm concerned, "digital cash" is here.
Can you use them to buy something that costs $0.05? How about something that costs $500,000?
Can you use them anonymously?
Credit cards are great if you're buying medium priced stuff from large businesses and you don't mind the world knowing about it. They suck for micropayments, for macropayments, for purchases from small businesses, and for purchases that are "outside the norm".
What I mean is, having some magic string of bits that stands alone, with no link to a central server etc., and can be swapped around, will never happen. Because whatever those strings of bits are, they can be duplicated digitally.
So I think it is better to talk about digital checks or digital credit cards or whatever. So you pass around some blob, but to validate that blog and assign it a new owner, you have to go to some central repository.
Then you have to ask, what would happen to the checking system or the credit card system if they had a bunch of tiny transactions, checks for 5 cents and credit card payments of 3 cents? Well, either the central repositories would complain (because their percentage cut was too small per transaction) or the users would complain (because paying 14 cents for a virtual check for 3 cents makes about as much sense as paying 14 cents for a paper check and then writing it for 3 cents) or businesses getting paid would complain (for either of those two reasons).
Thus, the only way micropayments could work is without a central repository, using pure stand-alone digital money. And since stand-alone digital money is impossible, micropayments won't ever work.
- adam
Can you use them to buy something that costs $0.05? How about something that costs $500,000?
;-)
Yes, definitely. Well, not half a million bucks. My credit line isn't that good. But if you dropped one of those zeros, I could truthfully answer yes. And I know a guy with one of those American Express black cards. He can literally buy anything he wants with it. He also owns an NBA team and a TV network, so that should tell you everything you need to know about his line of credit.
Can you use them anonymously?
You'll never be able to use any form of money anonymously except for stuff that has inherent physical value, like gold coins or diamonds or cash. I don't believe you'll ever be able to have anonymous digital money, popular science fiction notwithstanding.
As for your thing about small businesses, most of the businesses I interact with are sole proprietorships and limited partnerships: restaurants, markets, stuff like that. According to Quicken, I spend more money each month on restaurants than I do on anything else, excepting big-ticket fixed-cost items like the mortgage and the car note. Every one of those small businesses takes credit cards. Credit cards don't seem to suck for those small businesses at all. I think perhaps you're over-generalizing a bit.
I write in my journal
I want my flying car!!! I can pay cash.
THIS SPACE FOR RENT
Yes, definitely.
... cash
OK, I guess my number was too small. Add a zero. My point is (and I may be mistaken) that there's probably an arbitrary upper limit on the value of transactions that Visa, Mastercard, et al will accept.
stuff that has inherent physical value, like
come again?
I don't believe you'll ever be able to have anonymous digital money, popular
science fiction notwithstanding.
we are able to have anonymous digital money right now. the math is easy. the market is the hard part, which makes any digital cash scheme pretty worthless since cash is only as valuable as the network of people that use it. if some digital cash scheme did take off, we'd find that the politics become even harder to beat than the market. i'm quite sure it won't be long before digital cash is illegal (anonymous digital cash, that is).
so i agree that we won't have anonymous digital money any time soon (though it's not because it's impossible). i am quite sure we'll have it eventually, because it's just too good an idea to fail.
(as far as the small businesses go, i'm thinking smaller. there are so many juice stands where i can't use anything but cash. there are artisans and craftspeople who don't take credit cards. i can't buy firewood from my neighbor using a credit card. nor can i use one to settle a dedt for lunch with my coworker. and so
on.)
sorry, i'm saying that digital cash is both anonymous and irrepudiable, and that credit card transactions are neither.
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.
Call (206) 338-5780 COLLECT for information about a genuine BA, BS, MA, MS, MBA, or Ph.D.
Your digital cash will arrive in 2005, when an important David Chaum patent expires.
- adam
The problem with .5% of 5000 3 cent transactions is that they cost 5000 times as much to record and store as a single .5% of 3 cents transaction. The credit cards work because most transactions are not for 3 cents but instead for enough that they can take a reasonable per-transaction cut. If every transaction was 3 cents the credit cards would lose lots of money (ignoring interest payments, their other source of income).
- adam
there's probably an arbitrary upper limit on the value of transactions that Visa, Mastercard, et al will accept.
Unless you're using a card with which I'm not familiar, the upper limit is your credit limit. Many cards-- well, not many, but several-- have no upper limit at all. Not just anybody can get those cards. The ones from Visa and AmEx are by invitation only. But with those cards, like Mark's black AmEx, you can literally buy anything you can afford. Car, island, basketball team, 757, whatever. No limit at all. I think AmEx requires that one of your family members actually live at the AmEx offices at all times in order to get that card, though, or something. I'm having a hard time imagining how anybody would trust another person that much. But, evidently, it happens.
we are able to have anonymous digital money right now.
How? I'm not going to accept payment from you unless I know that it's genuine. (We'll leave out for the moment the idea that it might be genuine, but have no value on the open market. That's a different issue.) How can I know that it's genuine? Well, either it has to have inherent, independently verifiable value-- like gold or diamonds or currency-- or somebody has to vouch for it. If you were using a credit card, the AmEx people would vouch for the transaction, saying that they'll accept responsibility for making sure I get my value from you. I don't trust you, but I trust AmEx and AmEx trusts you, so all's well. Except anonymity goes right out the window, but quick.
How could you possibly conduct a transaction like that anonymously? Somehow make the bits themselves have independently verifiable value? Impossible: I don't trust you, so naturally I don't trust your bits. They could very easily be forged. (Where "very easily" means different things in different contexts.)
I assert to you that "digital cash"-- and I put the term in quotes because I'm trying to talk about it in the sense that you're talking about it, very specifically-- is one of two things. One: it's possible using a trust network that eliminates the possibility of anonymity (because anonymity and accountability are incompatible ideas), in which case we've already got it with credit cards and wire transfers, and banks could very easily add the service levels you want if the demand were sufficient.
Two: it's impossible. Impossible to do it and meet all of your criteria for anonymity and so on.
i'm quite sure it won't be long before digital cash is illegal
I'm sure "digital cash" won't ever be illegal because there's basically no basis for it in reality. You might as well outlaw unicorns, or ban mermaids.
I write in my journal
PayPal is what happened to digital cash. They're the best (only?) option out there for micropayments and such, but I've heard enough PayPal horror stories that I'm not about to trust them with my money.
Maybe if a bank comes up with a viable micropayment method, or maybe if PayPal admits that they are acting as a bank and submit to regulation, then maybe digital cash will happen. It's all about trust, and nobody trustworthy is making digital cash happen.
Under capitalism man exploits man. Under communism it's the other way around.
I'm seeing a parallel here. It's probably mostly my imagination, but I think there might be a grain of truth to it.
Time and again, it's been demonstrated that any crypto system that precludes resourceful and clever people from getting at stuff they want will be subjected to scrutiny, attacked, and finally broken. Whenever the subject of copy protection and copy-protected media comes up on Slashdot, quick are those who like to point out that every scheme that has been deployed and that has been worth attacking has been attacked and defeated. Many people seem to hold the opinion that this is an inevitable and unavoidable fact of life in the computer age.
Then, over here in this other corner, we have a bunch of people talking about ways of representing money that are purely digital, and that are purely self-contained. After all, it's important that people be able to conduct financial transactions over the Internet with complete anonymity. So ideas like "eCash" and "eGold" get battered around as if it were only a matter of getting the details hammered out.
These two notions, when placed in juxtaposition to one another, amuse me. History-- if we can use that term to refer to a period of a decade or so-- has shown us that it's much harder to build strong crypto systems than most people realize it is, and that even apparently strong systems are vulnerable to attack in ways that can't be defended against, or even predicted. And yet, here we are, debating the virtues of trying to guarantee the integrity of intangible value itself with just such a system.
Hubris, I tells ya. It's all fun and games until somebody loses their life savings.
I write in my journal
would be Avery Brooks, AKA Captain Benjamin Sisko...and he should know perfectly well that his flying cars are in front of the bluescreen or greenscreen or whatever!
I should have picked out the nickname Demosthenes!Tecumseh.
- It should be anonymous. PayPal isn't. Credit cards aren't. So they can create a customer profile of you. Goodbye privacy.
- It should be secure. Credit card numbers can be stolen or faked. An "ideal" system would guarantee security.
- It should be flexible. Most existing anonymous and secure e-cash systems use "tokens" of a fixed value. A good system should be able to handle arbitrary cash values in a flexible way.
Systems that work under these premises do exist. Anonymity and security can be reached by using blind electronic signatures. Flexibility can be reached by using "divisible" e-cash systems. Unfortenately, such schemes are very expensive in terms of computing power (which means, of course, that they are also expensive in terms of transaction costs).And then, of course, there's one important question: Who wants anonymous e-cash? Banks and credit companies probably don't (because they like to have your customer profile). Shops probably don't either (for the same reason). Customers? Well, face the facts: Most customers just don't appreciate the value of privacy. So, there's a simple conclusion: No market, so e-cash. It's as easy as that.
That's where my digital cash falls sometimes. You might also want to check next to the washing machine.
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.
"The noble art of losing face will one day save the human race"---Hans Blix
Digital Cash...credit card...digital cash...credit card...umm someone help me understand why this is not digital cash?
No matter what company does it there is going to be a fee attached. Digital cash is here, and most people have it already. Why make it harder than it is. Next time you buy something on the internet what did you just use to get it? Plastic Cash?
Neck_of_the_Woods
#/usr/local/surf/glassy/overhead
"One of these things is not like the others..."
Really. Cash has no (significant) physical value. It's a counter for the "full faith and credit" of the government.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
see
(this is just the cardinal example- other people have come up with other ways of providing offline
but you can't implement it till 2005:
I'm having a really hard time believing that any merchant is going to take a credit card for such a big ticket item, unless they pass on the card company's charge to you
I remember reading somewhere that the merchant fee on a black AmEx card is on a sliding scale. AmEx doesn't take the same percentage of a $100,000 purchase as they do of a $100 purchase. Which makes sense for everybody.
Other than plane tickets, expensive clothing, and insurance, it's pretty hard to run up the balance.
My friend buys a fair amount of jewelry for his wimmins. Stuff in the $50,000 - $150,000 range. He's a dot-com billionaire, and kind of a nut.
I write in my journal
Cash absolutely has inherent physical value, just like gold or diamonds. The source of that value is irrelevant; what counts is that everybody agrees that they'll accept these things as payment for goods and services. (Well, not everybody would take gold or diamonds. But they would be safe if they chose to.) If you have an item that you know can be exchanged for something you want, that item has inherent value. Ta-da.
Value is nothing more than a consensual mass delusion. This doesn't make it irrelevant, however.
I write in my journal
Sorry, but I'm not going to waste a bunch of time reading papers or patents or surfing google when I've already reasoned out the theoretical flaws in the idea to my satisfaction. If you want to argue that I'm wrong, go right ahead. But I'm not going to do it for you.
I write in my journal
Actually, in context, I used the phrase "inherent physical value" to mean that cash can be recognized as valuable without the verification of a third party. Cash is entirely self-contained. If you hand me a $20 bill, I can accept, upon cursory examination, that it's valuable. I don't have to call up your bank or the Department of the Treasury and ask them if you're good for it. If it's a real $20 bill, then it's good, no questions asked.
You use the phrase "inherent value" to mean something else. That's fine. We'll just use a different expression to describe what I'm talking about.
The point remains, though. When people say "digital cash," they're hoping for a system in which they can email-- or otherwise transmit electronically-- a sequence of bits to another party, and have that other party accept that sequence of bits as they would any form of currency, without requiring proof of identity or the keeping of records. In order for that to happen, that magical string of bits would have to have the same key characteristic as cash: it would have to be accepted as valuable and authentic without the involvement of a third party. If there's a third party involved, the whole idea collapses into what we have now with electronic credit transactions.
It is not possible for a string of bits to have that characteristic. Any string of bits can be duplicated exactly. Sure, you can play some games with public-key cryptography to make sure that a given string of bits is useful only to its intended recipient, but at that point the whole "trust" can of worms comes into play again and the lofty goal of a completely anonymous system evaporates like dreams.
I write in my journal
Money is just a concept- an idea we use to encourage the exchange of goods and services. As such, it's the easiest thing to BE digital- it can be represented just as well by a string of ones and zeros as it can be by paper with dead guys' faces on it. For all intents and purposes, we've already got digital cash. When I get paid at the end of the week, I get my money direct deposited. I use credit cards to pay for just about everything, and everything else gets paid via electronic transfer (including my credit card bills). In fact, as soon as McDonald's starts taking Mastercard, I'll be done with cash alltogether. I fail to see what possible advantages could be had by simply changing the way our computers see money, when we already have electronic systems in place that work just fine.
Ok. PayPal does not help you if the person you are dealing with doesn't have a PayPal account. If you could go to your PayPal account and create the equivilent of a digital note then you could give that to someone who doesn't have a PayPal account. Then they could give that note to someone else for equivilent goods/services and that person could eventually cash it in. The note could go through a dozen hands before it gets back to PayPal where it is cashed in. This gives you (and the people you deal with), two things that neither bank accounts nor PayPal can offer: anonymity, and freedom.
The fact that you don't know what digital cash is good for re-enforces my post. Digital cash companies need to stop thinking about the technology and start thinking about why, you, the customer with bank accounts and PayPal, need digital cash.
Some people are happy buying everything on their credit/debit card and never touch paper money. This is what buying online is like today. I, personally, prefer the anonymity of cash. Making a claim as to why we need digital cash is just as hard as making a claim as to why we need cash. I think the best possible reason for needing digital cash is the same reason we need cash: small transactions. I don't want to put my name on every tiny transaction I make. I don't want to go through the hastle of getting my bank involved in every small transaction I make. So what do I do? I simply don't make small transactions on the Internet, because there is no cash. I make the claim that without small transactions an economy cannot grow.
How we know is more important than what we know.