[Cryptography] Krugman blockchain currency skepticism

[Patrick Chkoreff]

Benjamin Kreuter wrote on 08/05/2018 07:38 PM:

> Which is why I said at least one offline hop.  Once you have a 
> certificate from the bank, your ability to use the system cannot
> be revoked unless you are caught cheating.  With one offline hop,
> you can receive and spend money without communicating with the
> bank.

Yes, the revelation of double spenders is an excellent feature.


>> Also a Chaumian e-cash issue would presumably be redeemable for
>> assets on demand, and the vaulted assets would be vulnerable to
>> seizure.
> 
> Modern banking does not work like that.  Nothing is "vaulted," it
> is all just book entries until you withdraw cash, and there is no
> reason it would be any different with e-cash.

If you were to establish a Chaumian e-cash issue today, what would be
the underlying assets for that issue?  I assume you would not issue
tokens by fiat, but rather in response to bailment events.  If your
answer to this question is "bank deposits," I would maintain that you
do indeed deploy "vaulted" "assets" in your system.  I would also
maintain that you are in a precarious legal position, on top of the
risk of the bank simply closing your account.  If your answer is Swiss
1000-franc banknotes, then you literally have a vault full of the
barbaric relic of paper.

And if YOU don't establish a Chaumian e-cash issue, who will?  So far
the answer is nobody.  Even early gold issuers such as Goldmoney
(still around), e-gold, and Pecunix never attempted it, though in some
cases that might have been due to patent issues.  I am virtually
certain Goldmoney will never do it because the founder is
philosophically opposed to anonymity in principle.  Even if he
weren't, his hand is forced by KYC.


> Perhaps cryptocurrencies also protect against these sort of abuses,
> but they do so at great expense and the security model is not
> nearly as well-understood as the e-cash security model.

If you want high efficiency and a well-defined security model, it's
hard to compete with blinded tokens.  But if you want something that
exists, you'll have to look elsewhere.


-- Patrick