[fc-discuss] Financial Cryptography Update: On Digital Cash-like Payment Systems

Steve Schear s.schear at comcast.net
Mon Oct 24 15:12:36 EDT 2005

At 11:14 AM 10/24/2005, cyphrpunk wrote:

>Note that e-gold, which originally sold non-reversibility as a key
>benefit of the system, found that this feature attracted Ponzi schemes
>and fraudsters of all stripes, and eventually it was forced to reverse
>transactions and freeze accounts. It's not clear that any payment
>system which keeps information around to allow for potential
>reversibility can avoid eventually succumbing to pressure to reverse

I don't think E-gold ever held out its system as non-reversible with proper 
court order.  All reverses I am aware happened either due to some technical 
problem with their system or an order from a court of competence in the 
matter at hand.

>Only a Chaumian type system, whose technology makes
>reversibility fundamentally impossible, is guaranteed to allow for
>final clearing. And even then, it might just be that the operators
>themselves will be targeted for liability since they have engineered a
>system that makes it impossible to go after the fruits of criminal

Its not clear at all that courts will find engineering a system for 
irreversibility is illegal or contributory if there was good justification 
for legal business purposes, which of course there are.


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