Something stinks in patent law if free market commodities and account
keeping systems, and combinations thereof, can be granted monopoly
rights. Clearly there can be no patent on the use of the commodity,
including use as money. Gold storage and the issue of certificates for
it, is nothing new. The account keeping systems for debits and credits
between persons is the stuff of banking, again nothing new. The system
is merely a 100% gold backed gold denominated bank, a combination of
metal storage and account keeping. 

Soon there will be open source code software for account keeping systems
and anyone can combine this technology with gold-backing. Soon gold
backed account based currency systems will be as simple as off the shelf
companies/trusts and off the virtual shelf open source code programs and
hiring the services of Escrow Agents, Mints etc.

Combined with free open source code electronic wallets holding multiple
currencies, internet marginal transaction costs will go to zero and
anyone will be able to pay anyone, regardless of where he holds his
account(s), of if in fact he holds accounts at all. Digital bearer
certificates, if 100% backed by gold, could have storage fees pre-paid,
and the currency expire after, say, 1 year. At expiry the coins could be
renewed by payment of storage and other fees or redeemed. Or coins could
be fee free and backed by interest bearing gold debt as well as
unemcumbered metal. These technologies will make the provision of gold
backed money highly contestable and/or competitive. 

Can patent law effectively curtail this development?

David Hillary 

Chris Rasch wrote:
> Hi,
> James Turk describes some of the history and rationale behind the
> goldmoney patents in a
> Wed, 1 Mar 2000 post to the cypherpunks mailing list
> Subject: CDR: Circulating Gold as Currency
> Available from:
> A quote from Turk's post:
> "...Because I recognized in the late 1980's that I was still early in my
> thinking, I set about researching how best to protect the solution I
> developed.  In 1990 I started studying patent law to see whether I could
> secure the idea, with a view to turning it into a business when the
> technology was ready.  In 1992 I hired a patent attorney, and filed the
> first application in February 1993.  Even back then the Internet was
> still
> more a vision than a reality, but it seemed that we were getting close
> to
> the technology I required...."
> To my knowledge, Mr. Turk has received two digital gold-related patents:
> 5,671,364
> Method and system for commodity-based currency for payment of accounts
> and elimination of payment risk
> (issued September 23, 1997;  a Continuation-In-Part of application Ser.
> No. 08/015,588, filed Feb. 10, 1993; abandoned Jun. 6, 1995.)
> Abstract
> A system and method for permitting gold or other commodities to
> circulate as currency requires a network of system users that
> participate in financial transactions where payment is made in units of
> gold. The gold is kept in secure storage at a deposit site for the
> benefit of the users. The payments in gold are effected through a
> computer system having data storage and transaction processing
> programs that credit or debit the units of account of gold held for the
> account of each system user.
> 5,983,207
> Electronic cash eliminating payment risk.
> (issued November 9, 1999;  a continuation in part of application Ser.
> No. 08/465,430, filed Jun. 5, 1995 now Pat. No. 5,671,364; which is a
> continuation in part of application Ser. No. 08/015,588, filed Feb. 10,
> 1993, now abandoned. )
> Abstract
> A system and method to allow gold to circulate as digital cash through
> the global computer network (Internet) and/or private communication
> networks much like cash currently circulates in the physical world. A
> computer system (emint) will create digital representations of gold
> (ecoins). Each ecoin will represent a weight of gold held at a
> participating secure storage facility (storage site), and each ecoin
> is given by the emint a unique Digital Hallmark.TM. by which it can be
> distinguished and identified. The sum total of all circulating ecoins
> (denominated in physical measures such as weights such as grams and/or
> ounces and fractions thereof) will equal the weight of all the gold
> held for safekeeping at the storage site(s) for the users of the
> emint. The ownership of gold is not transferred by a computer system
> executing debits and credits between individual accounts, but instead
> by individuals directly transferring ecoins amongst themselves (as is
> done in cash transactions, i.e., without double-entry bookkeeping).
> NOTE****I'm not an attorney, this is not legal advice, consult your own
> attorney********NOTE
> Based on my reading of Turk's patent # 5,671,364, it  appears to cover
> e-gold's system.  Given the original filing date of the parent patent,
> it also appears that goldmoney could theoretically sue e-gold for patent
> infringement.  Whether or not goldmoney will choose to sue, and whether
> it would be to their benefit to do so, I don't know.
> --
> Use e-gold?  Send me two cents:
> Read the _Wall Street Performer Protocol_:
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