@neil

A transaction where A gives a coin to B would then be handled by A creating a digitally signed message saying "the new owner of this coin is now this public key", specifying the public key of B. The central bank registers this transaction and B can verify that their public key is really registered as owning the coin. The central bank will not know who B is, it would only store a pub key without knowing who has the private key.

3/?

@x_cli

@neil

Of course such a system would not be a true "digital currency" since it is just a kind of extension of the existing currency. But it could be useful. Not for a true escape from the centrally controlled current financial system, but as a way of doing digital payments. The central bank would have a hard time blocking anyone because even though they see transactions happening, they would not know who is who.

4/4

@x_cli

@eliasr @neil @x_cli This would make it possible to destroy large amounts of cash by sending it to an address and deleting the key.

This is bad, and destruction of cash is illegal for a reason. Doing it with a lot of cash is cumbersome, but being able to do it with digital tokens could be problematic.

If something like this is ever implemented, you can be sure there would be a (quite small) limit to the amount of digital cash in circulation.

@loke

I agree that it would be possible to destroy cash, but why would anyone want to do that, to destroy cash that you yourself own and presumably worked hard for? Is that really a problem in practice?

@neil @x_cli

@eliasr @neil @x_cli It unlikely to happen intentionally. But we have seen how easy it is to lose control of cryptocurrencies unintentionally. The problem with a digital currency like is being suggested here is that there is no way to write off these losses since no one can prove it's no longer in circulation.

One solution could be that the digital cash has an expiry time, and if they are not circulated back into the system within a certain time they become worthless.

@loke

> One solution could be that the
> digital cash has an expiry time,
> and if they are not circulated back
> into the system within a certain
> time they become worthless.

Good idea, should be fine if the purpose is like cash, for transactions, it's anyway not meant for storing value over long time.

The central bank could then detect if some money has been lost (due to such timeout), and re-issue that amount if desired.

@neil @x_cli