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Agorist Payment Systems

The Freedom of Cash Online

The One Everybody's Familiar With

The most obvious example of an anonymous payment system is simple cash. The percentage of economic activity transacted in cash varies widely by country. In most developed countries such as the USA, this percentage is small (around 3%). There are however exceptions such as Japan, where the percentage is closer to 15%; and even extreme cases such as Russia, where the majority of the economic activity is in cash; and Argentina, where it's common to bring a suitcase full of cash to a real estate closing. (Imagine trying that in the USSA: you'd probably get arrested on the spot, and your cash seized as the proceeds of illegal activity!)

The percentage of "unbanked" citizens (that is, people without bank accounts) varies more or less directly with the proportion of cash transactions. So for example the percentage of unbanked Americans is only about 20%, while the number of unbanked Russians is probably still over 90%. A recent banking implosion and/or currency collapse naturally contributes to the likelihood of citizens avoiding banks and preferring cash (sometimes cash from another country). Again we can cite examples like Argentina, Russia, Mexico, Indonesia, Serbia, Thailand, Zimbabwe, etc. — or even the USA between 1930 and the 1960s.

There are however three basic problems with cash:
  1. It's difficult to use outside of face-to-face transactions.
  2. The value of national cash is subject to inflation.
  3. Counterfeit bills can be very difficult to detect.

New, Improved and Online

Therefore, ideally a good agorist payment system should preserve the principal benefit of cash — anonymity — while addressing some or all of these fundamental deficiencies. Anything which is online addresses the first issue, at least so long as the party you wish to trade with also has online access. Today a majority of the world's population has at least limited access to the internet, so accordingly we will restrict ourselves to a discussion of online payment mechanisms.

Without further ado, here is a hit parade of some of the better existing and emerging technologies:

Pecunix

site logo from pecunix.com
Pecunix(external link) is a well-established Digital Gold Currency, or DGC. Founded in 2001, Pecunix has proven its honesty and reliability, but remains small, with less than US$10M in circulating value. Strictly speaking it is a pseudonymous system rather than an anonymous one, in that there are user accounts to which one or more email addresses must be attached, along with optional encryption keys. However an email address is a minimal amount of identity information, and so far at least, the company has successfully resisted installing a full-blown "KYC" (Know Your Customer) regime, which requires government-issued IDs, proof of physical address, land phone lines, and the like.

As far as we know, every other existing DGC has succumbed to the fear and intimidation generated by the US Treasury's war on e-gold(external link), 1mdc, and the Liberty Dollar, and installed such a KYC regime in the name of AML compliance (Anti-Money Laundering, for which read: enforced tax collection). Some DGCs, such as c-gold(external link) or iGolder(external link) may have done so grudgingly; while others such as GoldMoney(external link) have plainly done so obsequiously.

Pecunix also has no storage (agio) fees, although the transaction fee for payments can be expensive for larger amounts.

In any event our view is that any payment system which is not at least pseudonymous is disqualified on fundamental grounds. By the same logic, an account-based system is inherently inferior to a wallet-based system, because the former stores everyone's transaction history in a central database. But as the last man standing in pseudonymous gold-based payment systems, Pecunix is certainly worth a look.

Positives: reliable, strong governance with third-party audits, pseudonymous, based on gold.
Negatives: account-based on central web server, uncapped spend fees, requires email address.


Voucher-Safe

logo for Voucher-Safe system
Voucher-Safe(external link), or VS for short, is an exciting next generation digital payment system supporting full anonymity and a flexible definition of money, by means of different currency Issuers. Users create "voucher safes," which are digital wallets that contain vouchers, receipts, and usage tokens. As with most modern digital currencies, payments are irrevocable.

The VS system is built on top of XMPP(external link) (aka Jabber), an extensible instant-messaging protocol. This means it can be accessed without a browser or any HTTP traffic. Three user clients presently exist: a self-installing Java webapp, a Jabber client plugin, and a command-line interface (CLI). The source code for all three clients is published. A website payment interface exists, built on top of the CLI.

The VS server architecture is globally decentralized using encrypted, mirrored storage, with the servers also communicating via XMPP over a secure VPN. The data storage design makes it impossible even for the system's own operators to track the identities, IP addresses, or vouchers held by particular users. This makes the system subpoena-proof, as well as protecting everybody in the event that a network server was ever hacked or seized. In fact, one doesn't even need to trust that the server operators are honest!

Perhaps most intriguingly, since vouchers are just an XML representation of value held in trust at an Issuer, this system is entirely money-agnostic. That is, it doesn't presuppose any particular definition of money. Anything which can be stored could be represented by vouchers: dollars, euros, gold, silver, even Bitcoins! A single voucher safe (wallet) can contain vouchers from any number of Issuers. An Issuer is the one party in the system who must be trusted, i.e. that they really are holding the assets backing their vouchers in circulation.

A gold-based Issuer called PXGold, which stores gold in the Pecunix system (above), will be live sometime in October. Other Issuers supporting US dollars and euros are on standby. More will undoubtedly follow in the future, making Voucher-Safe potentially the first catholic digital currency system. Because of the multiplicity of Issuers, and the use of digital currency exchangers to move value into or out of each Issuer, the VS system has no overall single point of failure. This is a very significant advantage in a business sense.

The VS system has been under development for just over three years, has been through a lengthy beta test period, and is just now going live.

Positives: fully anonymous and untraceable, decentralized architecture, published-source clients, money-agnostic.
Negatives: just at the point of commercial launch.

Voucher-Safe commercial site(external link)
Voucher-Safe project development site(external link)
Voucher-Safe user forums site(external link)
PXGold Issuer(external link) (presently points back to Pecunix)
EUV/USV Issuer(external link)


Loom

logo for the Loom.cc system
Loom(external link) is an exchange system based around the idea of an immense mathematical grid. Loom locations are randomly selected from amongst an astronomical number of possibilities. Assets can be stored at private locations, or exchanged at shared ones. This is not simply a matter of security through obscurity however, since access restrictions can also be applied to particular locations. A notable feature of Loom is that in theory anyone can become an asset issuer, provided they can persuade others that their asset type is valid and trade-worthy. The web portal implements a simple client through which locations and contacts can be accessed, and assets defined. You can learn more about how it works from the extensive FAQ(external link).

Positives: wallet-based, anything of value can be exchanged, fully anonymous.
Negatives: no issuer governance, single web server portal, still quite obscure.


Truledger

logo for the Truledger system
Truledger(external link) is a fully anonymous, digitally signed general ledger trading system. Again, the system is wallet-based and anyone can theoretically be an asset issuer. The principal difference vs. Loom is that the server and client utilize digital signatures to prove agreed-upon balances as each transaction takes place. However, unlike an account-based ledger, this is done in a manner which allows the irrevocable destruction of transaction history once trades have been closed. The principal drawback is that this is still just a working demonstration system at this point, with no actual circulating economic value.

Positives: wallet-based, anonymous, proof-of-transactions available, money-agnostic.
Negatives: no issuer governance, not yet in actual production use.


Bitcoin

logo from bitCoin.org
Bitcoin(external link) is a purely digital crypto currency, where each coin represents a valid solution to a class of mathematical problems. Because the set of valid solutions is finite, the number of possible Bitcoins is therefore limited. Likewise, Bitcoins cannot be counterfeited. User client source is published.

The Bitcoin system is unquestionably the most widely accepted and most talked-about digital currency at this point, even making its way into mainstream media and drawing a denunciation from US Senator Charles Schumer. However it does have a few significant problems: the proof-of-work design requires clearing of transactions to be published, the units do not represent anything tangible, and the extreme volatility of exchange rates vs. fiat currencies has so far made pricing goods and services in Bitcoins extremely difficult if not impossible. Nevertheless, it has a large body of zealous advocates and a significant user community.

Positives: wallet-based, anonymous, wide popularity, strong crypto security.
Negatives: clearing transactions are published, can only exchange Bitcoins, extremely volatile exchange rates.