About

Bankers succeeded to create an amazing amount of confusion around the very basics of money (look at the ripple discussion forum), even though the basics are simple when one understands that we are dealing with 2 separate issues, both of which have been solved earlier (thousands of years ago!) they just lacked the technology to make it work across the globe without counterfeit - we have the technology today. A system might

• just try to offer non-fraudulent money creation, like LETS systems.
• also try to offer proper denominations, like the "average consumption basket of an urban consumer". Some LETS systems almost achieve this (those that nominate in hours)
  
• or the system also tries to fine-tune trust
• the system might also allow public audit

In my opinion, ripple is the best implementation we have so far. Many thanks to Ryan for all the effort. Transparent ripple could link LETS systems nominating in hours (or link small electronic markets!), and offer a global solution now. Transparent means that the edges (obligations) are open, known to all parties.
Obscure ripple linking small accounts has a fundamental conceptual flaw: for the network to scale, one needs several graph connections. But this increases risk that you are financing a black hole that has debts to all directions. People will choose a better solution, where the total amount of obligations is auditable. This can be solved easily: everyone issues his own currency, in form of tokens, with serial numbers verifyable within the published issued range. Value can be either linked to fraud currency (like EUR) or non-inflationary ("money velocity-independent") realworld units (eg. the services of the issuer) or both. Look at the curves: http://www.falura.hu/en/
Everyone, of course, can decide which currencies he'd respect, in function of the issued amount (important: in obscure ripple one cannot decide to accept X's obligations only if X's total obligations < certain value).
Ripple is still important: in this scenario, something very similar to ripple can be used to link markets.

While LETS systems do not allow fine-tuning trust (it says "trust the community as a whole", which often works good in small, scale automatically adds freeriding costs). Ripple tries to offer "fine-tuning trust", but without public audit, fine-tuning trust is an illusion.

A concept for currency issue and transfer, with public audit capabilities. With automated market solution to make it convertible and convenient.
Hopefully we manage to design related APIs and a reference implementation.

The transfer of tokens is very simple: whoever bears a TitleServer signature has the token. Transfer: happens with digital signature:
P1 (previous owner) signs (with S1 secret key) that he transfers token(seq+1) to P2
The title server (operated or trusted by the issuer) verifies that token(seq) belonged to P1, verifies the validity of S1 signature, and signs a certificate declaring that token(seq+1) belongs to P2.

Note that a sequence number (seq and seq+1 in the example) prevents replay attack, and minimizes the storage requirements in the tamper-proof “title server”. Accounts are essentially keypairs, or a set of keypairs (compound key), can be generated with near zero cost.

In other words, the TitleServer signature entitles the pseudonym to demand the product/service/payment specified in the contract of the given coin. (a coin is an obligation, enforcable in court). Therefore the Title server is the key for tracking coins of a currency (in other words: prevent doublespending) without knowing the coin holder identity.

History

Loom allows issuing currency, but not in an auditable way.
A market implementation similar to Ripple can be used to find path in a graph to convert between any 2 currency.

The concept will be fetched from http://www.falura.hu/en/
See http://groups.google.com/group/rippleusers/topics?hl=en&start=
especially "ultimate market currency" thread

In The News

Just started to port the concept here

Understanding ...

Title server is a dedicated HW with a simple interfacebehind the webserver. It has no apache, possibly not even an OS. Look at syslinux and pxe bootloader, a good base (minimalistic system with networking) to build the crypto services upon.
The redundant datastores of historical transactions are online (ordinary webservers) but they cannot lie (if they try any corruption, it's equivalent to dataloss which is no problem).

Features

The payment transactoins are very simple, and straightforward: look at NonFraudMoneyMechanics
The interoperation of markets is more complex, in many ways resembles ripply. Possibly simpler than ripple, because the unit of measure can be any well-known currency, possibly gold (even if gold does not back these currencies, nor transferred, only used as a "common denominator" to compare other currency values to when routing between markets).

E-commerce Integration

With an USB key used for signing it's all simple. With your own signing-HW "online" (dedicated HW behind firewall just like a title-server) it's also easy. What if you need to hire "signature provider", which is damn cheap, but you don't know which one to trust ? You contract 3 providers that have no way to get to know each other, and define in the system that 2 signatures are needed for authorization.
You drop into a netcafe (with keylogger spyware badware msware), start the JAVA purse applet, type the OTP (one-time passphare, different sequence for small transactions and different for big transactions), you decide to make a transfer.
The applet connects to 3 purseservers to sign the transaction for the currency (Title-)server.
Neither of the purseservers can authorize anything alone. At least 2 needed to authorize. My problem is how to split or blind the message and contact 3 servers (gnunet is too slow, maybe tor is fast enough) so they cannot correlate each other even if owned by same company.
Maybe one server signs the md5 hash, the other sha, the third a thrid kind of hash of the same message.
Just an idea ...more innovative blinding might be more suitable.

Criticisms

Also See

Loom
Ripple
NonFraudMoneyMechanics

External Links

The video submitted (respecting the 30 second limit) to the http://www.project10tothe100.com/ about community currencies http://www.youtube.com/v/RqlIiFfOekk

TextsToSubmit

Yellow Pages