Digital Currency

Levi Pearson levi at cold.org
Mon Jul 2 11:12:57 MDT 2007


"Daniel C." <dcrookston at gmail.com> writes:

> I just finished reading Cryptonomicon for the third or fourth time,
> and it's got me wondering (again) about how digital currency would be
> possible.  He talks a lot about how "strong crypto" can enable you to
> have digital currency that is unforgeable, but I've thought and
> thought about it and I just don't see how it's possible to issue a
> digital, transferable document that you couldn't just make a copy of,
> thereby doubling the amount of this currency that you own.  Is digital
> currency really possible, or is it purely a product of Neal
> Stephenson's imagination?

This may not be a complete set of necessary information, as I probably
haven't thought of some way to attack it, but consider this:

The tuple of information (Value, Serial Number, Issuing Authority)
hashed and signed by the issuing authority.

The process of receiving one of these would require contacting the
issuing authority and exchanging it for a new one with a different
serial number, thereby ensuring that you haven't received a duplicate
SN.  Of course, the issuing authority would only honor the value of a
given SN once, so you /could/ send out copies, but you wouldn't get
far.

                --Levi



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