One of the big problems I think I have solved (to a degree) is the problem of balancing the transparency of the money supply (allowing everyone to validate the true amount of money available within the system) with the need for privacy of transactions (allowing everyone to conduct business in private). Here is the proposal for creating that balance:
- Cash can only be created from earned ξ–that is it isn’t created from your individual credit, it can only be created from someone else’s credit or debit payments you have accepted into your account.
- When you can print cash, the system must demonstrate an auditable change of your account: if you printed ξ5 (representing 5-hours of value-time) your account should be debited ξ5 and the rest of the market knows there is a new ξ5 serialized note in circulation.
- The problem with privacy is if you alone print a new ξ5 bill, everyone knows that the serial number for that ξ5 is probably in your possession and therefore traceable.
- So we must hold your request to print in a queue with everyone else’s request to print until there are enough bills of the same denomination to increase privacy.
- In a market with very few people, there isn’t much room for privacy anyway since all participants pretty much know all the other participants, there will always be a higher amount of risk. For a larger market, there maybe hundreds or thousands of invididuals who may have need to print ξ5 bills, the risk to privacy is diminished.
- If you cannot print your ξ5 with an acceptable amount of risk to your privacy, you can decrease the denomination to smaller amounts like five ξ1 bills or fifteen ξ20m bills where there is likely to be more demand for printing. This is of course more inconvenient but privacy has always been a balance between risk and convenience.
- You can choose the amount of “risk” you’re willing to accept in the system. If you don’t care who knows you’ve printed what, you can go ahead and demand-print your money and the transaction stream will just show the credit to the notes in circulation account and a debit from your account.
So now that you’ve got your cash or you’ve been offered ξ cash, what states could it be in?
- Invalid : This ξ note does not have a valid serial number, it has never existed within the system. (Complete forgery)
- Valid : This ξ note is live and in circulation within the system. This does not mean that it could not have been duplicated by an unscrupulous person.
- Deposited : This ξ note has been taken out of circulation via a deposit into an account. If there are any “duplicate” bills in circulation, they are worthless to their holders.
The problem with duplicates is and will always be an issue if the only place to originate cash is from your laser printer. Ideas for mitigating that will have to wait for another post.