Good hackers are able to unravel encryption, as long as they have a good
system. An intelligence agency can crack a code in 12 secs. Should we
trust their employees, let alone other professionals? Physical money
comes with its production, maintenance and security costs, but it would
only take one hacker to clean up a treasury, reroute and pack up before
CIA could even trace the source.
http://www.mycrypto.net/encryption/encryption_crack.html
on an even lighter note:
http://www.satirewire.com/news/aug02/encryption.shtm
<http://www.satirewire.com/news/aug02/encryption.shtml>l
<http://www.satirewire.com/news/aug02/encryption.shtml>
this site offers hope for quantum encryption, but it appears in its infancy:
http://www.sciencedaily.com/releases/2012/04/120402094326.htm
You raised some very good points, and I shudder to think garage/estate
sales could be a thing of the past.
*Natalia*
On 17/04/2012 1:13 AM, Keith Hudson wrote:
At 21:25 16/04/2012, Natalie wrote:
(N) Here's another scheme to create wealth, for the Mint--though they
say they don't yet know how---for government
(K) Yes, a digital loonie will create wealth by virtue of cost savings
on coin and note production. However, the Mint will have already
noticed that physical money is fast changing to digital anyway. By
hosting a contest for a suitable system, I imagine that the Mint feels
itself to have a duty of care to Canadians to encourage a sound system.
(N) by tracking all cash transactions for taxation
This will be the reason why the Mint has been given the go-ahead to
hold the contest. It might help the Canada Revenue Agency to get their
tabs on the grey and black markets (though whether they will succeed
is another matter -- see below).
(N) and for hackers.
(K) Due to encryption, digital currency systems are already unhackable
while money is in transit. The problem so far lies in some retailers'
sloppy storage of personal credit card details. If a person-to-person
system is encouraged by the government then, before a transaction can
ensue, both devices would have to make contact with a validation
source (governments or government-approved banks. But more of this below.)
(N) Privacy issues aside, successes in Iceland aside, shouldn't we
stabilize the economy first, make government and corporations
accountable first, before committing to more (possibly messy)
technology in our lives?
(K) Governments will never stabilize their economies as long as they
can individually print as much money as they like. Meanwhile, several
electronic transfer systems are already in existence and, in the case
of sensible retailers, they're not messy. Ease of use would have to be
the case in any government-approved system.
(N) I can appreciate that issuance of metals and paper add to harmful
environmental impact and bring associated costs, but if such a system
were to get hacked in a major way, the entire country could be
devastated.
(K) As before, encryption could enable a currency system to be totally
unhackable before, during or after any transaction. Any
government-approved system would ensure this. (This is actually
another reason why governments would like to see a cash-less society.
It avoids counterfeiting, which is a constant -- and significant --
problem.)
(N) Pro's and con's?
(K) It's all pros and no cons in principle with a properly designed
system. But such a big culture change will take a long time to mature,
particularly among the old.
However, Emily Jackson's article must be wrong where she writes: "The
difference with MintChip is it doesn't plan to link to a person's bank
account or credit card information." As already explained, MintChip
would most definitely have to link to an objective validation database
which, moreover, would have to be approved by government. Otherwise,
an underground peer-to-peer currency system would arise which would
not only make existing black markets easier but could amplify them and
deprive governments of even more taxation that they're due. This would
be the final straw which would break the back of governmental taxation
systems -- which are already so complex as to be colanders used by
rich persons' accountants (often retired tax inspectors!).
The main deficiency so far with most black market operations (as far
as users are concerned) is how to launder fiat (governmental) money in
and out of them via bank accounts. This is the only way by which most
operations can be investigated. I've written "most" because, for all
we know, there may be some rich people who are already members of
quite independent (black market) currency systems which can
short-circuit banks by means of gold coins and tablets (being the best
way of doing it. Diamonds, precious stones and objets d'art would do
just as well except that they're not so easily standardised.). This
possibility cannot be written off. We need to remember that money
arose quite independently from governments in the first place. The
first coins were not issued by the Athenian government (such as it
was) but by Greek merchants all around the Mediterranean for their own
convenience. The first central bank, the Bank of England, was not
created by government but by merchant bankers mainly for their own
purpose (obtaining a low-risk revenue for their capital. They
established their income [with government agreement] by appropriating
the state lottery and customs duties.).
In summary, governments would like coins and banknotes to disappear
but they would never allow a truly private person-to-person digital
system to operate with their consent. Indeed, together with the banks,
governments prevented this from happening 40 or so years ago when
credit cards came on the scene. Everybody could have had a
card-swiping machine attached to their telephone line. Long before
now, mobile phones could have had the same facility. Nor will mobiles
ever be able to transfer money directly unless every user is also
linked to a government-supervised bank account which keeps a record of
all transactions.
Keith
http://www.thestar.com/business/article/1159513--royal-canadian-mint-to-create-digital-currency?bn=1
Emily Jackson Staff Reporter
The Royal Canadian Mint wants to get rid of pocket change and it's
enlisting hacker-types for help.
Less than a week after the government announced the penny's
<http://www.thestar.com/news/canada/politics/article/1153779--federal-budget-2012-pennies-to-be-withdrawn-from-circulation>
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
<http://mintchipchallenge.com/> for software developers to create
applications using the MintChip.
The old-fashioned prize? Solid gold wafers and coins worth about
$50,000.
It's such an unusual move from the crown corporation, which has been
in the coin-making business for more than 100 years, that Hacker News
<http://news.ycombinator.com/x?fnid=xLehDc5saU> questioned whether it
was an "elaborate hoax."
It's not, the Mint's chief financial officer Marc Brûlé said Tuesday.
Commerce is changing and the Mint has always been innovative, Brûlé
said. (For instance, it did an initial public offering of exchange
traded receipts of its gold holdings last year.)
"There's been a very huge growing digital economy that is really
going to be fueled by smartphones and mobile being the next big
thing," he said.
Despite the variety of payment options, he said there are "still no
cost effective electronic solutions" for low value transactions that
can be used regardless of a person's age or credit standing.
MintChip
<http://www.youtube.com/watch?feature=player_embedded&v=9PX-vW4VccY>,
a secure microchip, will be able to do this by letting people
transfer small amounts of money (for an iTunes song or a newspaper)
with no personal information attached to it, he said.
The Mint's move into the digital market is a reflection the
competitive payments industry, Interac spokeswoman Caroline
Hubberstey said.
Despite a December 2011 government report
<http://paymentsystemreview.ca/wp-content/themes/psr-esp-hub/documents/rf_eng.pdf>
claiming Canada's payments system is "outdated" and "has simply not
evolved," Hubberstey said it the industry is "highly competitive and
rapidly changing."
Interac pegs the value of small cash and coin transactions (under
$20) at $90 billion, and companies big and small want a share of that
market as it turns digital, Hubberstey said.
"Players you wouldn't have thought of before" are looking for ways to
get into the market of secure transactions, she said.
"You're seeing competitors that have been in the space in a while and
new competitors looking at the payments market as an opportunity."
The payments industry's last major shake happened in the mid-90s when
debit card use took off. As more smartphones adopt Near Field
Communication (NFC) technology, which lets users hover their phones
over NFC-enabled devices to make payments, mobile payments are
expected to soar.
Interac, Mastercard and Visa already have contactless cards that use
near field communication (NFC) chips for small payments at gas
stations and grocery stores.
PayPal, Google and Visa have introduced digital wallets where
consumers control all their cashless payments from one place.
Companies Square and Payfirma let people accept credit card payments
on their smartphones.
The difference with MintChip is it doesn't plan to link to a person's
bank account or credit card information. And unlike BitCoin, a
peer-to-peer hosted digital currency with a fluctuating value,
MintChip is simply a new way to exchange Canadian dollars. Plus, it's
backed by the Canadian government.
It's still too early for specifics such as how the Mint will make a
profit from this, how it will prevent hackers from stealing cash,
whether the money is anyway traceable or who exactly will load a chip
with money, but Brûlé said the response to the contest has been
tremendous.
Developers may have been skeptical about MintChip, but the 500
contest spots were filled in just four days.
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Keith Hudson, Saltford, England http://allisstatus.wordpress.com
<http://allisstatus.wordpress.com/>
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