Free Money!

Here is a 128-cent digital coin minted by the Mark Twain Bank of Saint Louis, Missouri, USA:



If you're the first one to deposit it, you'll be 1.28 dollars (US) richer when you do. (If someone else beats you to it, the bank won't take it. Normally a payment like this would travel in an electronic envelope, protected by strong encryption so that only the intentended receipient could read it.)

Digital cash is paradoxical. A digital coin, like the one above, is a number, but bears no serial number (like a bank note) nor even an account number (like a check). The bank signed it--so they can tell that it really is a coin they issued--but the number they signed was transformed in such a way that when it's presented for deposit later, they can't tell who they signed it for.

All this is done with patented mathematical processes invented by David Chaum whose company, DigiCash, licenses the technology. And if a couple thousand lines of C code is your idea of a good read, you could hunt down a source-code implementation of Chaum's technique called Magic Money, the work of a pseudononymous cypherpunk called Pr0duct Cypher.

``Why do I care?'' I hear you asking.

Some people may go a bit overboard about this stuff. Timothy C. May's Crypto Anarchist Manifesto describes a future where an anonymous, untraceable economy challenges governments' ability to tax, or even exist. Short of that, maybe you just don't think your bank or credit card company needs to compile a history of your every purchase--at least not without kicking back some of the money they make by selling it. This is where real digital cash differs from other network payment systems like Veriphone's ``CyberCash.''

Well, I think it's interesting, anyway...

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