PaperMoney
Paper money has several advantages to crypto money as it is
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simple - even a child or your grandma can use it, you need nothing but the piece of paper money to pay
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transparent - you can feel it, you can own it, you pass it over, the ownership is always clear
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anonymous - you can not trace down the previous owners of it
How is it possible to have paper money for a crypto-currency? Especially for a crypto-currency that has a natural decay and therefore the value is not fixed. Can this be transparent in any way?
The paper money will have a unique identifier (UUID) that is printed on it as QR code. There should also be a redundant representation as a printed number or bar code as paper money is not always treated perfectly nice. This makes the paper money a twin of a digital representation that is somehow connected with the crypto-currency system.
Full transparency seems not easy to align with a natural decay.
To reach a reasonable high transparency the idea is to connect the UUID of the paper money not directly with a ThankToken but instead with a digital account. The natural decay will be connected with the holding period of the owner of the piece of paper money. The longer you own the piece of paper money without using it, the less value it will have. On the other hand:
If you spend your paper money fast, its printed value is extremely close to its actual value and it is transparent.
When ever a transaction is made, you will pay the natural decay caused for the holding period. This requires some interaction with the crypto-currency and the digital world. Therefore, the idea is that this is all done by the shops that accept the paper money. Let’s make a simple example:
You go to a shop an want to buy a nice organic bread for 1.95 Thanks. You have a paper money note of 2 Thanks. Now there are three different situations:
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Paper money is worth more than
1.95 Thanks-
The shop is paying the natural decay to the digital account of the paper money note so it’s balance is
2 Thanksagain and matches the printed value. -
The shop gives back some change (see micro payment below)
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Paper money is worth exactly
1.95 Thanks-
The shop is paying the natural decay to the digital account of the paper money note so it’s balance is
2 Thanksagain and matches the printed value. -
There is no change
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Paper money is worth less than
1.95 Thanks-
The shop tells you the difference you still have to pay.
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You will pay with an additional note.
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The shop is paying the natural decay to the digital account of the paper money note using the additional note so it’s balance is
2 Thanksagain and matches the printed value. -
The shop gives back some change (see micro payment below)
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In any case you get your nice organic bread and go home happily.
As you can guess there is some complexity in the clearing. However, as this is all handled by the shop and its infrastructure this is all hidden for the customer.
But what if the customer does not trust the shop (e.g. in case of situation 3.)?
For additional transparency there is a service offered to everybody that allows to scan the QR code of a paper money note and then shows the current holding period and value. You can use your smart-phone but there will also be anonymous devices like an ATM that can offer this service and also verify the authenticity features of the paper money. You may also use that to verify the change you get back from the shop. Paranoid users may additionally have an app or device to scan every incoming paper money that will manage the holding period and value offline without internet communication.
In order to pay between individual humans without an official shop involved there are the following options:
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Verification of the current paper money’s value using without paying the natural decay (see above). In this case you need to find a combination of paper money notes that fit for an agreement on the deal. Apps can help you to simplify this. This way of trading is prohibited for official transactions like in shops.
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One person acts like a shop. He has all the required infrastructure and software (smartphone) to do the transaction officially. He will not be entirely anonymous in this case.
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Trust. The people are best friends. They do not care about the natural decay and an absolute exact value of the payment.
There will be paper money for typical amounts like 1, 2, 5, 10, 20, 50. But how do we deal with small change? There will be no coins like in our current currencies. Instead there will be paper money with a value of change. This is anything with a value higher than 0 and less than 1. Unlike the other paper money its natural decay is not required to be payed when on a transaction.
The idea of crypto-currencies is to create trust via transparency and by avoiding a central instance you have to trust on. This can not properly be combined with paper money. Here you need a central instance that produces the paper money and manages all the accounts connected with the UUIDs and does the clearing via the official digital crypto-currency. People will have to trust that central instance and the paper money they produce.
If we go for a fully digital crypto-currency with all its advantages why should we then care about legacy stuff like paper money? The answer is simple. Both approaches have their pros and cons. If you want to reach the maximum number of people with your crypto-currency you have to combine both worlds and let the people decide what to prefer and when. This way you will reach everyone:
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the geeks and nerds
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people that can not handle smartphones
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people that want to stay as anonymous as possible
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people that do not understand anything about crypto-currencies and better trust in paper than the internet (even though the paper will be somehow connected with the internet)
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people that want to publish their payments and account balance on social media ;)
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