By Jason Madden

Physical or Electronic Tokens or Commodities

that can be have the following properties:

Unit of Account defined value

Medium of Exchange acceptability

Store of Value non-perishable

Introduction: What is Money?

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Narrow View of Term:

Tokens of Exchange transacted Only electronically

Examples: Facebook Gold, Digital Gold Currency, BitCoin, Terra TRC, and other electronic currencies

Broad Usage of Term includes Both: Electronic Payment Authorization Credit cards Value Holding Electronic Tokens

What is Electronic Money?

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Early Intermediary Tokens of Exchange

Commodities or Objects of Perceived Worth

Minted Coins standardized units of metal Code of Hammurabi: legal debt payment

Trade Bills credit certificate for production Led to Local Merchant Banks for redemption

Goldsmiths demand deposits & promissory notes

Overview: Early Money

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Private Bank Notes

Loans based on deposits on account Beginning of Fractional Banking

National Currencies from Central Reserve Banks backed by Gold or Silver Legal Tender for Payments

Beginnings of Modern Money

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World War 1 & End of Gold Standard

Scarcity of Gold Reserves with Enlarging Circulation

Bank Notes no longer redeemable for gold Floating value in exchange market

Money by Decree of Government Backed by issuers ability to repay debts Susceptible to public distrust Possible uncontrolled inflation or deflation

Modern Fiat Money

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Private Currency free banking

Community Currency local acceptability

World Currency trade reference

Hard Currency non-reversible

Soft Currency allows payment disputes

Types of Electronic Money

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Free Banking No Central Reserve Bank Free Entry into Banking Industry Freedom to Issue Notes, Accept Deposits, and

Collect Checks for Payment Freedom to Borrow Money on Term Deposit Freedom to Lend Money & Invest Assets Bank Secrecy Act of 1970

Informal Value Transfer Systems IVTS required to cooperate in Anti-Money Laundering efforts

Patriot Act enforcement

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Private Currency

Ithaca HOURS

Ithaca, NY http://www.ithacahours.org/#whatareithacahours

BerkShares Berkshire, MS http://www.berkshares.org/whatareberkshares.htm

Toronto Dollar Toronto, Ontario http://torontodollar.com/aboutus/index.php

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Community Currency

Global Trade Reference

Gold, British Pound, US Dollar, Euro, Yen Private Complementary Currency efforts

International Monetary Fund (IMF) Special Drawing Rights (SDR) Supplementary Reserve Assets

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World Currency

An Open-Source Peer-To-Peer Payment

Network Using Digital Signatures & Encryption

Public –Private Key Encryption Alice & Bob Illustration Digital Certificate Blocking Chain

Video: http://www.weusecoins.com/

Example: BitCoin

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Fees and Limits

Monthy Service Charge 2.50 USDATM Withdrawals 3 USDPOS Purchase 3 USDCard to Card Transfer 5 USDCard cash out/Administration Fee 15 USDMaximum ATM Withdrawal 1000.00 USDMaximum Card Balance 5000.00 USDMaximum Daily Spend 5000.00 USD

http://bitcoin-debit.com/fees.php 12

BitCoin Debit/Smart Card

New Frontier for Computer Science

involved in the Global Banking Industry Developing strong and secure data

exchange Preventing identity theft and forgeries

Opportunities in Private & Community Financial Companies Developing Community Currency systems Developing Funding Sources

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Conclusion

Questions …

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References A report to the Congress in accordance with section 359 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT ACT). Nov 2002. Retrieved from http://www.fincen.gov/news_room/rp/files/hawalarptfinal11222002.pdf

A survey of electronic cash, electronic banking, and internet gaming [electronic resource]. Financial Crimes Enforcement Network, U.S. Dept. of the Treasury, 2000. http://www.fincen.gov/news_room/rp/files/e-cash.pdf

The History of Money (n.d.). Original from PBS Nova broadcast Secrets of Making Moneyhttp://www.pbs.org/wgbh/nova/ancient/history-money.html

No Risk is Unsafe: Simulated Results on Dependability of Complementary Currencies. Kenji Saito, Eiichi Morino, Jun Murai. 2006. Retrieved from    http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=1625376

What are Ithica Hours? (n.d.). Ithica Hours, Inc. Retrieved from http://www.ithacahours.org/#whatareithacahours

What are BerkShares? Currency for the Berkshire Region. (n.d.). BerkShares, Inc.. Retrieved from http://www.berkshares.org/whatareberkshares.htm

About The Toronto Dollar. (n.d.). The Toronto Dollar Community Projects Inc. Retrieved fromhttp://torontodollar.com/aboutus/index.php

Fees and Limits. (n.d.). Bitcoin Services,LTD. Retrieved from http://bitcoin-debit.com/fees.php 15