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Cyphernomicon 12.12

Digital Cash and Net Commerce:
Cypherpunks Experiments ("Magic Money")

  12.12.1. What is Magic Money?
           - "Magic Money is a digital cash system designed for use over
              electronic mail. The system is online and untraceable.
              Online means that each transaction involves an exchange
              with a server, to prevent double-spending. Untraceable
              means that it is impossible for anyone to trace
              transactions, or to match a withdrawal with a deposit, or
              to match two coins in any way."
              "The system consists of two modules, the server and the
              client. Magic Money uses the PGP ascii-armored message
              format for all communication between the server and client.
              All traffic is encrypted, and messages from the server to
              the client are signed. Untraceability is provided by a
              Chaum-style blind signature. Note that the blind signature
              is patented, as is RSA. Using it for experimental purposes
              only shouldn't get you in trouble.
              "Digicash is represented by discrete coins, the
              denominations of which are chosen by the server operator.
              Coins are RSA-signed, with a different e/d pair for each
              denomination. The server does not store any money. All
              coins are stored by the client module. The server accepts
              old coins and blind- signs new coins, and checks off the
              old ones on a spent list."
              [ of excellent summary elided...highly recommended
              that you dig it up (archives, Web site?) and read it]
              [Pr0duct Cypher, Magic Money Digicash System, 1992-02-04]
           + Magic Money
             - (or something like
                that) <Derek Atkins, 4-7-94>
                ls  <Michael Paul Johnson, 4-7-94>
  12.12.2. Matt Thomlinson experimented with a derivative version called
  12.12.3. there was also a "Tacky Tokens" derivative
  12.12.4. Typical Problems with Such Experiments
           - Not worth anything...making the money meaningful is an
              obstacle to be overcome
           - If worth anything, not worth the considerable effort to use
              it ("creating Magic Money clients" and other scary Unix
           - robustness...sites go down, etc.
           - same problems were seen on Extropians list with "HEx"
              exchange and its currency, the "thorne." (I even paid real
              money to Edgar Swank to buy some thorned...alas, the market
              was too thinly traded and the thornes did me no good.)

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