More about digital money - death of the US $?
Money backed by the S&P 500:
The Geodesic Economy
Robert A. Hettinga
"Who needs money anyway?": The New Monetary Economics, Monetary Separation, and Digital Bearer Settlement
One of my best friends in the whole world is Mark Tenney of Mathematical Finance in Alexandria, Virginia. The best man at my wedding, I met Mark during my mostly sad attempt to go to the University of Chicago as a "Student-at-Large", where I snuck in the back door and hung out for almost a year before they threw me out -- though, to my credit, or lack there of, it was for impecuniosity, more than anything else. "First thing you do, you get the money", and all that.
It was fun, though, and I did manage to transfer enough credit from Chicago to finish my undergraduate philosophy degree at Missouri. Up until the last five years or so, when I discovered the "University of the Internet", I'd always wished I could afford to go back some day and play some more, especially in finance and economics.
Anyway, Mark was one of those scary mathematical prodigies who finished both high-school and college in three years apiece, finished all-but-a-doctoral-dissertation in Physics at Brandeis in three years, hedging himself with an Master's, then turned on a dime and did the same thing in Finance at Chicago, hedging again with an MBA in Finance. All this before wading into the fray of quantitative fixed-income analytics-for-hire, swinging that claymore-sized intellect of his with both hands.
Last year, I told Mark that I had decided to concentrate on digital bearer transactions full-time, and he asked a bunch of questions like he always does when I reveal my latest off-the-wall idea. And not saying much in reply, which he also always does, being one of the most laconic people I've ever met. That's okay, I suppose. I talk enough for both of us.
Anyway, a few days later, Mark calls me up, all excited. Well, as excited as Mark gets, anyway. "You could issue digital bearer certificates backed up by an S&P 500 portfolio," Mark says with not much affect, followed by dead air, which is my cue to talk.
"Yup," says I, chattering away, "That's easy. Old hat. We talked about stuff like that on cypherpunks years ago. The only problem is, it's illegal in the US for various reasons, and proving that you're only issuing to and redeeming from foreign nationals is really too complicated. We don't call it 'digital bearer settlement' for nothing. Of course, that doesn't keep several smash-the-state cryptoanarchists out there from daydreaming, in color, about that idea pretty much full time. Expressions like 'tax-evasion' and 'money-laundering' only make them work harder, after all. Me, I'm only in it to reduce transaction costs. Illegal business is chump change compared to putting the entire global economy onto the net in digital bearer form.
"Steve Schear and I even figured that you could do it with just about any stock, anywhere, from anywhere, as long as it was legal in the jurisdiction you did it from. Sort of an "Unsponsored Network Depository Receipt", UNDRs, for short..." and then, I proceeded to go into an entire rant on that. In four-part harmony. Arlo Guthrie would have been proud...
Finally, I run out of gas, like I always do, and Mark says, "If you issue digital bearer certificates collateralized by the S&P 500, you won't need cash anymore." More dead air.
"Well," I said, jumping back in, "maybe, maybe not. I mean, the dollar's pretty much pecunia franca right now, yes?
(cont)
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