Following-on from last post, there were some questions around how you might actually get digital cash, there are three basic methods of obtaining digital cash that I can immediately think of:
- It could be given. Directly acquired by interaction with others (tap and pay). This is the simplest method. It incurs zero transactional charge, is quick and can be performed offline.
- Conceivably, digital cash could be printed out using a home printer (essentially becoming physical cash). The value is in the number; the bits containing its identity (value/history/security key). The number could be rendered as an abstract pattern as a security measure. Mobile app vision solutions e.g. Google Goggles on Android and Word Lens on iPhone are highly sophisticated and could read details of printed digital cash, enabling transactions/validation to be conducted, allowing printed digital cash could be exchanged without a mobile. Fundamentally, it's no different to one-use vouchers validated by merchants. If the consumer copies a voucher and tries to double-spend, it would be caught at POS.
- Conceivably, digital cash could be printed out using a home printer (essentially becoming physical cash). The value is in the number; the bits containing its identity (value/history/security key). The number could be rendered as an abstract pattern as a security measure. Mobile app vision solutions e.g. Google Goggles on Android and Word Lens on iPhone are highly sophisticated and could read details of printed digital cash, enabling transactions/validation to be conducted, allowing printed digital cash could be exchanged without a mobile. Fundamentally, it's no different to one-use vouchers validated by merchants. If the consumer copies a voucher and tries to double-spend, it would be caught at POS.
- It could be earned. This can be physically earned (in a way identical to above) e.g. a paymaster gives you $100 for a day's work (tap and pay). Other consumers/online solutions can also give you digital cash (downloadable to your mobile) in exchange for some service/incentive; for example, with Twitter, you earn a credit when someone acknowledges your tweet e.g. one cent for a view, three cents for a click, five cents for retweets and eight cents for a favourite. In this way, it behaves in a similar way to virtual cash only becoming digital cash once downloaded.
- Conceivably, digital cash could be earned by enabling the mobile app to use idyll CPU cycles to run a distributed version of the validator. In this way, a separate validator web site would be unnecessary (w/ associated costs). It would function in a similar manner to Bitcoin, an open source virtual cash solution for desktops. However, due to the complexity of decentralising the encryption algorithms involved, the need to maintain a "spent" database, the limited processing power of mobiles and the need for physical separation to prevent hackers back-engineering the validation process, this may not be entirely practicable. The situation is worth monitoring however since it makes restricting digital cash solutions e.g. by Government sanction very difficult.
- Conceivably, digital cash could be earned by enabling the mobile app to use idyll CPU cycles to run a distributed version of the validator. In this way, a separate validator web site would be unnecessary (w/ associated costs). It would function in a similar manner to Bitcoin, an open source virtual cash solution for desktops. However, due to the complexity of decentralising the encryption algorithms involved, the need to maintain a "spent" database, the limited processing power of mobiles and the need for physical separation to prevent hackers back-engineering the validation process, this may not be entirely practicable. The situation is worth monitoring however since it makes restricting digital cash solutions e.g. by Government sanction very difficult.
- It could be bought. When bought online, PayPal or similar could be used. It would be analogous to going to an ATM. PayPal last year announced PayPal for Digital Goods. Payment transactions cost 5% plus $0.05 per purchase under $12, lower than most previous micropayment transaction standards. Alternatively it could be physically bought by visiting a currency exchange with higher exchange rates.
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