[118187] in Cypherpunks
e-gold to cash in 3 easy steps
daemon@ATHENA.MIT.EDU (Anonymous)
Tue Sep 21 15:12:20 1999
Date: Tue, 21 Sep 1999 19:20:30 +0200 (CEST)
Message-Id: <199909211720.TAA04626@mail.replay.com>
From: Anonymous <nobody@replay.com>
To: cypherpunks@toad.com
Reply-To: Anonymous <nobody@replay.com>
The solution for marrying e-gold to the ortodox cash is not
software or algorythms. It's much simpler.
What is called for is hard to forge and cheap to manufacture
physical token (call it Ob) with embedded unique number.
Don't scream yet.
This Ob is allowed to become an owner of the e-gold account.
The gold storage company agrees to exchange it for gold at any time.
For simplicity, assume that each Ob is associated with a nice round
number of gold atoms (say, $100 equivalent or 10 grams or whatever.)
If you offer to pay me with an Ob, I can read it and verify on-line it's
validity. Or I can just trust you.
This creates gold-backed true cash. The Network is used to verify it, not
for exchange (think anonymous verification terminals next to ATMs).
The Ob can change many hands before (if ever) being swapped for gold.
How is this different from government money ?
1. Too expensive to forge.
2. Tokens can be created and values assigned far away from the storage
company by a trusted party. Think storage company in China and Ob
manufacture in Phoenix, AZ. The e-gold company does not have to own an
expensive "press" and skilled labour.
3. And now the best of all: The identifying number can be stored in e-gold's
computers after being encrypted by the original purchaser. This means that
you can carry a bunch of Obs in your pocket and they are completely
useless (and not even the value can be determined) without a secret bit string.
Stealing the token also involves forcing the key out of the current owner.
To exchange for gold, you must present Ob AND the bit string.
When paying me with an Ob, you also give me the bit string. This makes transaction
very private - more private than the paper cash. If you get caught with a token
at the airport, it would be very hard to prove the value. Especially if Obs
can have several values (different keys). Like being $100 and $1e6 at the same
time.
I'll leave the key transport methods to your imagination.
I think that I know how to make the token. What I do not know is how to prevent
the gold storage company from getting busted for Doing Things That State Does Not Like.
