Canadian Mint To Create Digital Currency 298
Oldcynic writes "The Canadian mint has allowed 500 developers to enter a contest to create a new digital currency. The currency would allow micro payments using electronic devices. From the article: 'Less than a week after the government announced the penny’s impending death, the Mint quietly unveiled its digital currency called MintChip.
Still in the research and development phase, MintChip will ultimately let people pay each other directly using smartphones, USB sticks, computers, tablets and clouds. The digital currency will be anonymous and good for small transactions — just like cash, the Mint says.
To make sure its technology meets the gold standard in a world where digital transactions are gaining steam, the Mint is holding a contest for software developers to create applications using the MintChip.'" It looks like the Canadian Mint might have a bit of Sweden envy.
Security Through Obscurity (Score:5, Interesting)
MintChip operates in either an online or an offline mode. The online most is basically the same as EMV cards used in europ. The offline mode relies entirely on a master secret key which is on every single mintchip.
Let me repeat that, the security of offline transactions is based entirely on a secret which is on every single mintchip.
Right, good luck with that.
But can they do it right? (Score:5, Interesting)
I'm actually all for digital currency. But there are a few caveats, the obvious security ones apply, don't want people copying my digital money, don't want people stealing my digital money, don't want people creating money out of thin air. But in addition it needs to have a few other characteristics:
- Doesn't cost me anything to use. This is why I currently ignore Interac email transfers and still write people cheques, it's much cheaper for me. (even if it should be in the bank's best interest to push me the other direction, the cheque should be a lot more expensive for them to process!)
- Isn't tied to any one platform. Don't tell me I need an iPhone, or a Windows PC, or any other specific device, make it work on just about anything (obviously within reason)
- Anonymous. (listed in the summary, so it's a good start, but I can't emphasize enough that you will never get rid of physical currency as long as you make all your digital currency leave a trail)
- Hard to lose. I don't want to lose all my cash to a hard drive crash, or other similar event, so I need to either be able to back it up, or better yet not have to. (of course this is very difficult to accomplish while maintaining both anonymity and security, but there are a lot of bright minds out there, hopefully someone can come up with a good way to do it.)
- Ideally non-network dependent. A couple of years ago requiring an internet connection for the transaction would have been a deal breaker, but with the increased ubiquity of the internet on mobile devices this has lowered somewhat in priority. I still think though that you need to be able to pay someone without necesarily having network access at the time.
Re:My Ass (Score:4, Interesting)
Even more amusing would be digital currency tripping over a patent or two, only to discover a few years down the track, Canada locked into making patent payments for 10% or more of the electronic currency they are trading.
so whats that thing I carry in my wallet? (Score:5, Interesting)
you know that bit of plastic with my information encoded on the back, I swipe it into a miniature computer where that information wisks away to be validated and approved ... fucking smoke signals?
its just a pet peeve of mine ... digital
digital currency, fucking already have it
digital distribution, thank god, those fucking analog CD's and DVD's were so poor sounding when I copied them in my car
digital download, how the hell else is that going to work?
I dont know what shit for brains started replacing "internet" with "digital' but its fucking retarded
Re:Wiping out our savings (Score:5, Interesting)
I think this is 2 completely unrelated problems. What this article is talking about is a way to exchange Canadian Dollars with people without physically carrying and handing them paper bills or metal coins. The currency itself isn't changing, just the method of transfering it.
As for devaluation. This is actually a touchy subject, in some ways currency needs to devalue, doing so stops people from sitting on vast piles of it and keeps them spending it which keeps the economy going, which generates jobs, and allows more people to spend money. Of course it also needs not to devaluate too quickly for the reason you list in that you have to be able to save for future big purchases, and be able to save money for retirement. Balancing the 2 is very tricky, but also completely unrelated to this particular initiative.
Glow in the Dark Dino Bones Coin More Interesting (Score:5, Interesting)
Woot! I got one of those developer spots. (Score:3, Interesting)
Re:Security Through Obscurity (Score:2, Interesting)
In the digital cash context, anonymous or more properly, untracability, means the bank cannot correlate withdrawals with deposits. When you present a coin to the bank for deposit or exchange for an unspent coin, they know it is a good coin because it has a valid RSA signature, for instance, but they have no idea to whom they gave the coin originally. David Chaum patented a scheme based on RSA in the late 80's and his student Stefan Brands came up with another scheme (and there may be others.) Offline support usually works by exposing your identity to the bank if you try to spend a coin twice.
I have no idea if the Canadian Mint is using Chaumian or Brandsian digital cash but it is possible, try reading Schneier's "Applied Cryptography."
Re:Wiping out our savings (Score:2, Interesting)
I would like every libertarian to conduct the following thought experiment:
What happens if one king owns all the gold?
I don't know what will happen when a libertarian conducts this experiment. I just know what happened when I conducted it. First, I realized that gold would have no use as currency in such a situation. All the other people in the kingdom would use silver. If the king owned all the silver, they would keep finding subsitutes in turn until they had something that circulated in reasonable ammounts among all the people.
Next, on the way from a functioning gold-based economy to the degenerate case of control at the hands of one man, there would be an intermediate state. Say perhaps, only the lords and ladies had gold. It would still not function as a currency among the peasants.
As the peasants were drained of their gold, they would gradually turn to other things. There might even be a bizarre state of affairs where gold became cheap relative to other goods because the writing was on the wall, and it was apparent that it would be a dysfunctional currency.
Now draw a parallel between this bizarre medieval kingdom and our moder society--one where US Dollars are increasingly concentrated in the hands of a few. We see that the dollar is beginning to fail.
As much as we might like to assume that money is strictly the measure of a mans talent and willingness to work, we must also acknowledge that it is a public resource. Determining at what point we leave the "Newtonian" world of personal responsibility and enter the "relativistic" world of wealth imbalance is a job that has been left to politicians. Our current society is the result.
Re:A better name (Score:3, Interesting)
Corporate middlemen hate cash (Score:4, Interesting)
This system is supposed to handle micropayments. Yeah, the penny costs 1.6 cents to produce. But, because it's metal, it can easily survive being used in 10,000 transactions. This is equivalant to a surcharge of 0.016% per transaction. In the case of nickels/dimes/quarters and $1 and $2 coins, the overhead ratio becomes even more microscopic. Compare this with what credit card companies charge. From http://www.cbc.ca/news/story/2009/04/16/f-cardfees.html [www.cbc.ca]
> Merchants pay two to four per cent of the sale price in various
> transaction fees whenever they accept a credit card for payment.
> âoePlayers you wouldnâ(TM)t have thought of beforeâ are looking for
> ways to get into the market of secure transactions, she said.
The article in the summary ( http://www.thestar.com/business/article/1159513--royal-canadian-mint-to-create-digital-currency [thestar.com] ) says...
> âoeYouâ(TM)re seeing competitors that have been in the space in a while
> and new competitors looking at the payments market as an opportunity.â
Being a middleman is very profitable. It would be even more profitable if every minor transaction was charged.
Re:A better name (Score:3, Interesting)
A revolution is what would happen. (Score:4, Interesting)
Followed quickly by a headless king.
This does not require an elaborate analysis, only a cursory reading of history.
Re:Functioning Economies (Score:5, Interesting)
Not an economist here. However, if I am not mistaken, what makes an economy effective, is the exchange of money between its members.
What most businesses, economists and governments seem focused on is growth. If that means more people exchanging money, no problem. But if it refers to expansion of the economy by means of producing increasing amounts of raw materials then surely that is not sustainable in the long term? For instance, there is only a fixed available amount of timber we can harvest before we are denuding the Earth of its forests (the current method it seems). Surely its better to try to build a sustainable economic model so that our resources last us as long as possible no?
The other fallacy I think we see banded about is that if we give the ultra-rich corporations breaks on taxes, or support them via government bailouts, that they will then take that money and use it to create jobs. It seems to me that a lot of businesses accept the bailout gratefully, then put most of it in the bank to hedge their bets on future success. I would like to see some proof of this "trickle-down" concept, because what I see is various businesses being propped up by various governments and then either walking away with the money, or using it to create jobs - overseas, where they can maximize the benefits to them by utilizing cheap labor.
It seems to me that most jobs are being created by the small companies that open up and close regularly all around us. It might only be a job here or there but I bet the net aggregate of all those jobs is far greater than that represented by the occasional mass expansion of a major corporation here or there. Unfortunately all I seem to see of late is small businesses going out of business with nothing to replace them.
Re:A better name (Score:4, Interesting)
I lived in London for 15 years and never heard anyone speak in a way that was reminiscent of "aboot". :) I've read that in Scotland the separation of villages by as little at 10 miles could have villages barely able to understand each other in the "old days".
I'm on PEI now, where I grew up, and you'll find that in the fishing villages that were originally french there's people who say "dis, dat, dese, and dose" for "this, that, these, and those" and some other humorous applications, as artifacts of their ancestors pronunciation of 'th' and other letter combinations.
Most people I know pronounce 'about' with the latter syllable sounding like a 'bout' of boxing.
In the game studio I worked at we had people from all over the world, and it was noticeable in at least one American that they pronounced 'about' with an extra beat in the 'ow' part. So a two syllable word sounded like it had three syllables. Kind of a reverse of the Japanese tendency to remove syllables from pronunciation in common speech. (The name Asuka for example, which we'd hear as Oska)
Meanwhile If I talk to someone from the southern US, they think I have a funny accent. If I talk to someone from the west coast or someone that speaks with the common 'broadcast' dialect (notice that most major anchorpeople have a "neutral" accent) we can't immediately identify the area the other is from.
But there's also just as much dialect variety here as the US. Just like "Bawston" and "Bal'more", or down in "Noble's Holler" (Yay, Justified). Probably not as much as Scotland though.
Language is neat!