DIGITAL CASH AND MONETARY FREEDOM

Much has been published recently about the awesome promises of electronic commerce and trade on the Internet if only a reliable, secure mechanism for value exchange could be developed. This paper describes the differences between mere encrypted credit card schemes and true digital cash, which presents a revolutionary opportunity to transform payments. The nine key elements of an electronic, digital cash are outlined and a tenth element is proposed which would embody digital cash with a non- political unit of value. It is this final element of true digital cash which represents monetary freedom — the freedom to establish and trade negotiable instruments. For the first time ever, each individual has the power to create a new value standard with an immediate worldwide audience. If all that digital cash permits is the ability to trade and store dollars, francs, and other governmental units of account, then we have not come very far. Even the major card associations, such as Visa and MasterCard, are limited to clearing and settling governmental units of account. For in an age of inflation and government ineptness, the value of what is being transacted and saved can be seriously devalued. Who wants a hard drive full of worthless “cash”? True, this can happen in a privately-managed digital cash system, but at least then it is determined by the market and individuals have choices between multiple providers. The section on key elements of a private digital cash system compares and contrasts true digital cash with paper cash as we know it today. Each of the following key elements will be defined and explored within the bounds of electronic commerce: — Secure (unable to alter or reproduce)