Electronic money

[Francis Davey]

2014-12-07 10:50 GMT+00:00 Ben Laurie <ben at links.org>:
>
>
> "sorted out"? By who? In a completely decentralised way? (Hint: probably
> not, how would you?).
>

By the parties to the double-spend (something that is always possible).
Note: I am not arguing against you and certainly not claiming this was done
in a decentralised way.

In practice a lot of errors in financial (and indeed more broadly
commercial) systems are sorted out by agreement that is required neither by
law nor by code. As I understand it, this was one such example.


>
> As I said, you should read my writings on the matter. The title of the
> second one gives the game away, so clearly you haven't. :-)
>
>
No, I missed the links. Will do.


> You have not really explained that, rather you have defined money in a
> highly debatable way and decided Bitcoin does not fit your definition.
>
> For me, its money: I can buy drugs and guns with it...
>
>
I'm (a) teaching a course on e-commerce as part of the LLM in internet law
and governance at Strathclyde; and (b) (supposedly) writing a chapter on
money and payment for a forthcoming book on law and the internet.

Any account of law + internet + money has to mention existing legal codes
that have been developed to deal with that combination. One of these is the
electronic money directive (
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32009L0110). This
has an idiosyncratic definition of electronic money, namely:

'electronic money' means electronically, including magnetically, stored
monetary value as represented by a claim on the issuer which is issued on
receipt of funds for the purpose of making payment transactions as defined
in point 5 of Article 4 of Directive 2007/64/EC, and which is accepted by a
natural or legal person other than the electronic money issuer


Bitcoin is not "electronic money" under that definition, nor are Linden
Dollars or "gold" in most MMORPG's (because not representing a claim on the
issuer) nor for that matter are some forms of credit card (because not
"issued on receipt of funds").

Oyster *is* an example of such a thing.

You would have thought that PayPal was not, but it has successfully
persuaded the (then) FSA that it is, see:

https://www.era.lib.ed.ac.uk/bitstream/1842/2262/1/paypal.pdf

To my mind this is an account based system pretending to be an EMI so as to
have an easier time from a regulatory point of view.

What I was interested in is whether anyone was working with something that
was (i) electronic money (under the definition of the directive) (ii)
freely circulating (i.e. not account based) and (iii) not reliant on a
physical token (as Oyster is).

Eg, some cryptographic thing I store on my computer, can email around etc,
using a distributed protocol but that is also "electronic money".

I have been given a couple of leads which I will pursue, but the general
lack of such things in widespread use makes me wonder whether they are
actually useful, or maybe there are reasons for them not being used right
now.

Those sorts of questions are ones I thought ukcrypto might have a better
view on than most.

-- 
Francis Davey
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