Perspectives on Financial Cryptography

I present some debatable propositions about financial systems and financial cryptography. (Warning: the propositions expressed may or may not be believed by the author, and may be phrased in a deliberately provocative manner. They may contradict each other. This paper follows the author's slides closely, and does not have all of the ancillary comments of the author and the audience.) 1 I n t e r n e t m o n e y is t h e s a m e as I n t e r s t e l l a r m o n e y P r o p o s i t i o n 1: There is little difference between lnternet payment schemes and interstellar payment schemes. In 2097, you will buy info off the GGG (the Grand Galactic Grid, successor to the WWW) with "st arbucks." Is galactic space very different than cyberspace? (Think of star systems as analogous to computers on the Internet, and interstellar radio communication as a somewhat slower version of the Internet.) Do payment systems need to depend upon physical proximity, national governments, or the ability to haul someone off to jail? One can hope that trade in the Galactic Federation will be based on more than simple barter. 2 M o s t p a y m e n t s c h e m e s h a v e n ' t w o r k e d w e l l P r o p o s i t i o n 2: Historically, most payment schemes haven't worked very well. Good references on payment systems are Weatherford's History of Money[3] and Galbraith's Money[2]. Commodities (metal, tobacco, wampum, cocoa beans, etc.) have problems with weighing, purity, quality, deterioration, transportation, storage, theft. Coins (invented in the western world in Lydia, around 630 B.C.) have problems with shaving, debasing, theft, and government abuse. Paper money (seen by Marco Polo in China, reinvented in Italy to help get around usury laws, and used widely in colonial U.S.) has problems with counterfeiting (now using computer scanners and color printers), and government abuse (inflation).