Secutity
encription
	PGP
	public key	encripts	"Title"		specifies destination
	private key	decripts	"True Name"	secret name
signatures
	public key	decripts	"Title"		confirms source
	private key	encripts	"True Name"	secret name

can private and public key be the same for both?



digital dollars (dig's)

transaction	- exchange goods for IOU
initiator	- issuer of the IOU
recipient	- reciever of the IOU
currency	- symbolic evidence of IOU

risks		- false IOUs		done by recipient
			- copys
			- corruptions
			- creations
		- destroyed IOUs	done by initiator

Any form of currency can be considered to be based on "IOUs". A
"transaction" consists of an exchange of goods for IOUs. These IOUs can then
be either transfered and/or satisfied by the issuer at a later date.
Traditional cash is little more than evidence of an IOU from the government.

Any "IOU" is only as good as the person that issued it. Also, in any
transaction, the initiator carries the risk of an incomplete transaction. To
balence the risk of initiating a transaction with the risk of accepting an
IOU, the supplier of the IOU should be the initiator. This can be translated
as "cash up front, because your cash might be worthless".

IOUs are an intagible concept, or "information". Information, as opposed to
physical matter, can be freely reproduced, distributed, corrupted and
deleted. This means that IOUs are very fragile in themselves, and can be
abused by unscupulous people.

Traditionaly this problem was solved by using something physical as symbolic
proof of the IOU, or currency. Physical matter is harder to manipulate than
information, so the risk of abuse is reduced. Cash and signed reciepts are
typical examples of this.

However, this does not entirely solve the problem, and physical currencys
cannot be transfered electronicly. To get around the problems of physical
currency, some sort of logical currency is required.

The potential problems are; false IOUs created by recipients, and IOUs
destroyed by initators. The first problem is hard to solve. Fortunatly,
information is relativly hard to "create", and it is possible to have
initiators "sign" IOU's with a digital signature that cannot be easily
forged. This signature is verifiable proof that the IOU contents were
created by the initiator. This stops false IOUs being created and existing
IOUs from being corrupted. It does not stop IOUs being copied. In fact, the
second problem of IOUs being destroyed can be solved by the recipient
keeping a copy of the IOU. To ensure the prevention of destruction of IOUs
all copies of IOUs must be valid, and some mechanism must be provided to
ensure that an IOU can be converted only once. The easyest way to do this is
to get a new IOU to match the first when it is converted. This way the IOUs
are never invalidated, but represent a traceable transaction history, with
each party holding evidence of the others IOUs.

Any IOU must be; specify the value, identify the initiator, be non
forgeable, and either identify the recipient or be non duplicatable.

Digital information can easily duplicated, and there is no way that
duplication can be prevented. This means that there is no way to prevent a
digital IOU from being duplicated. Because IOU's can be duplicated, IOUs
cannot be transferable. An IOU can only be redeemed by the source, for the
recipient.

By using a reliable intermediateary, IOUs can be reliably exchanged between
unreliable clients.

creating IOU's
cash is exchanged and an IOU is created

spending IOU's

initiator
recipient

transaction

A receipt is proof of the debt, not the debt itself.

EXAMPLE
bank pays person A for donation
	from	bank
	to	person A
	for 	bank
	reason	donation
	amount	$100
	time	8:00:00.00 1/1/90
	serial	000000001
	sign	BANK HAS SIGNED THIS INFO

person A gives payment to person B via bank for bicycle
	from 	person A
	to	bank
	for	person B
	reason	bicycle
	amount	$10
	time	11:00:00.00 17/2/95
	serial	00000001
	sign	PERSON A HAS SIGNED THIS INFO

bank gives person B payment from person A for bicycle
	from	bank
	to 	person B
	for	person A
	reason	bicycle
	amount	$10
	time	11:00:01.87 17/2/95
	serial	000000002
	sign	BANK HAS SIGNED THIS INFO

bank has 
	$100 physical donation
	$10 IOU from person A
person A has
	bicycle
	$100 IOU from bank
person B has
	$10  IOU from bank

alternatively
person A pays person B directly for bicycle
	from	person A
	to	person B
	for	person A
	reason	bicycle
	amount	$10
	time	11:00:00.00 17/2/95
	serial	00000001
	sign	PERSON A HAS SIGNED THIS

person A has
	bicycle
person B has
	$10 IOU from A

Person B had better trust person A to honour his IOU when he goes to spend
the $10. If he chooses to request forwarding the IOU, the the person he
wishes to forward it to had better trust person A as well.