Your wallet stores digital coins and thus ultimately your computer holds your balance. The exchange keeps funds matching all unspent coins in a settlement account.
What if my wallet is lost?
Since the digital coins of value in your wallet are anonymized, the exchange can not assist you in recovering a lost or stolen wallet. Just like with a physical wallet for cash, you are responsible for keeping it safe.
The risk of losing a wallet can be mitigated by making backups or keeping the balance reasonably low.[1]
Ah. This is Chaum's DigiCash, from 1990.[2] A good idea, too early.
It's a system where coins are protected against double-spending by a database back-end.
Which is how some centrally issued cryptocurrencies actually work.
The half-anonymity is interesting. The recipient is not anonymous, but the sender is. That
may make it a politically acceptable substitute for cash.
It has the nice property that, unlike debit cards, etc., the recipient can't take more of your money than you give them.
> That may make it a politically acceptable substitute for cash.
I think you misspelled unacceptable. Anonymous donations are a massive source of corruption, which is why they tend to be capped by law (and even then, I'm sure a lot of bad people manage to get around it).
Political money needs total transparency.
(Unless you meant "more acceptable to the general public for average transactions"; in which case I agree, but I suspect it will be the opposite for governments and law enforcement agencies...)
It is much better for govt as well. Instead of having untracked cash flows not paying taxes, now you can ensure taxes are paid (in EU seller is responsible for paying taxes). So your local govt can sell you this new (old) system as being just like cash, decentralised, anonymous, with no banking institutions at play, while having a closer watch on increasingly convoluted tax codes.
As for donations, it's still good. Instead of having vast amount of cash flow unnoticed as bribes/corruption, now you atleast know that the politician received that amount of money. I don't see how it is worse that normal cash.if one can cap amount of anonymous donations with banks and cash, why not do the same here?
> Instead of having untracked cash flows not paying taxes
Blockchain payments are tracked, so are bank movements; that's not the problem. The problem with blockchain solutions (well, one of many) is that they're pseudonymous, so authorities have to work to demonstrate that account X is linked to person A. Compare with the regular banking system, where every account must have a real identity attached: from the government's perspective, banks are so much better, and they already work (through Visa/MasterCard/Amex). Governments have absolutely no incentive to accept or push an anonymous digital currency. None whatsoever. The more anonymous a currency is (and this one is a bit more anonymous than blockchains), the worse it looks from the perspective of the state.
"Actual transaction costs are estimated around 0.001 cent/tx (at high transaction rates, amortized over billions of transactions, excluding migration costs). Note that this is an early estimate -- and could thus easily be 10x higher." [1]
Transactions costing singular cents [2], and very soon fractions of a cent [3], are already doable on public rollups providing actual control of your own funds, with escape hatches in case the system sequencer falls over [4]. These are, of course, still under heavy development. If privacy is a requirement, there's a zk-rollup for that (or, just use Monero). Not to mention support for social recovery.
This is a very PoS-Ethereum-centric (and L2-scaling-centric) view. There are even cheaper chains that trade L1 decentralization for faster blocktimes, instant finality, and/or much cheaper fees.
4. the central bank gets to decide how much "cash" each individual deserves to have at any given point in time. All of the proposals I've heard set that limit at less than one month's apartment rent in most EU cities. Therefore, this scheme is not competing with any form of money or payment besides coins-and-banknotes.
5. this "cash" has an expiration date, which is chosen at the whim of the central bank. If you stuff it in your mattress like paper cash, it becomes worthless. Therefore, this scheme is a massive step backwards in terms of central bank control over our lives, relative to coins-and-banknotes.
If this takes off, it will affect only a small slice of our economic relations, and it will affect that slice for the worse, not for the better.
I'm disappointed that Tanja Lange was willing to associate herself with this.
You're confusing Taler with central bank digital currencies (CBDCs, the Eurozone incarnation of which would be the Digital Euro). I suppose the project being funded through an EU grant could mean that it's in consideration to be used for the Digital Euro, but your criticism would apply independently of whether Taler or another technology is used, and Taler could also be used in different contexts without those limitations. The CBDC and Taler concepts live in different spheres, and it doesn't make sense to criticize Taler for pain points that you have with CBDCs.
Btw, I haven't seen anything like an expiration date in the proposals for the Digital Euro [0], could you provide your sources for that claim?
No, I'm not confusing anything. I think you're trying distract from the incredibly antisocial effects this project will have. Everything I wrote comes from the position paper published on the Taler project's website:
Page 16: These denomination keys, and thus the coins, would have an expiration date before which they must be spent or exchanged for new coins. Customers would be given a certain amount of time during which they could exchange their coins.
Paper and coin money also gets expired and you need to replace your mattress stuffing for the new versions every now and if you want to keep any value.
That sounds more like a technical aspect. It is probably related to cryptographic key expiry, not the balance itself. Also, even if what you said was true, having all your money expire all at once is so easy to avoid that it is kind of meaningless to even think of it as a problem. It's more like a pointless micromanagement hassle than a realistic way of stealing your money.
In contrast, all of Europe has demonetized its old currencies (Deutschmark, French Francs, Italian Lira, etc.) when switching to Euros, and a few times before that. I've just looked it up and one Napoleon Franc is currently worth ~20€.
> 4. the central bank gets to decide how much "cash" each individual deserves to have at any given point in time.
Taler is a payment system, it has nothing to do with central banks at all.
> 5. this "cash" has an expiration date, which is chosen at the whim of the central bank. If you stuff it in your mattress like paper cash, it becomes worthless. Therefore, this scheme is a massive step backwards in terms of central bank control over our lives, relative to coins-and-banknotes
Again, you must be confusing Taler with something else. Also, coins and banknotes have expiration dates too (for instance, try pay something with a Deutsch Mark note today).
Kind of sad to see the “Evil central banks want to control your life” conspiracy theory leaving the mud of 4chan to reach HN…
Like a lot of conspiracy theory, there's a core of truth. All you have to do is ask the question "is this system going to be allowed to be used for crime on a huge scale", receive the obvious answer "no", and infer that there will be some control built into the system.
Where it leaps into conspiracy is the question of when and whom this will be used against. But it's fairly obvious that measures will be taken against drug sellers, sex workers, banned political parties and so on.
This has nothing to do with what GP invented (amount control and expiration date set by central banks).
> But it's fairly obvious that measures will be taken against drug sellers, sex workers, banned political parties and so on.
Yeah, of course like governments already do with cash!
There's a big difference between saying “governments are going to police things” (which is always true, that's their purpose in fact) and spreading made up claims involving a central bank's conspiracy (spoiler alert: policing isn't part of central banker's job, if somebody is going to do anything it will not be them but the plain and boring law enforcement agencies, but that sounds less bad as a conspiracy to say that police is going to police stuff, I guess).
If anything, a technology like Taler is a big improvement in terms of individual freedom compared to things like credit cards. If governments want to stop cash to combat crime (and save money, the logistics around cash is very expensive) having Taler instead of Visa is a massive benefit for privacy and freedom.
The argument is that, if the money is just a database, the police will get it policed, or the bank will police it themselves, in an extra-legal way of just deleting or freezing accounts on request.
Like with regular bank accounts you mean? (Btw, Taler being just a payment system, you don't have anything but a regular bank account tied to it: you don't hold money through Taler anymore than you hold it on Visa: there's a small short lived wallet for transaction purpose but it's supposed to act like a purse, not a safe).
If you live in a country where the police can delete or freeze your bank account without legal control (or at all, even), then you're screwed and you can either change your government or find a new country, the fact that cash exists is not at all a big enough a guarantee for your freedom. At that point the government could also seize all your properties (including cash, something that the US police routinely does[1]) and/or keep you under arrest in secret prisons.
If you hope a technological mean (be it rudimentary like cash, or more modern like a blockchain) can help you protect your freedom against evil government, I have bad news for you. No technology can solve your political problems.
Indeed, GNU Taler doesn't use a blockchain, as a blockchain cannot actually implement digital cash. In a blockchain, transactions are necessarily centralized — on a distributed ledger maintained using a peer-to-peer protocol, but the transactions themselves are still account-based —, so they are effectively equivalent to wire transfers, i.e., just accounting entries: they cannot take place between two offline parties like you can do with actual cash. Also, blockchain-based digital "money" (quotes because there is no such thing, "cryptocurrencies" are purely speculative securities and that's it) need to be at the same time the currency, the long-term storage, and the transaction system.
On the contrary, GNU Taler is only a transaction system as you said, and uses advanced cryptography (double blind signatures) and infrastructure that allow it to be bearer-based, i.e., actually decentralized transactions between two offline parties can take place. Taler can actually do digital cash, with buyers privacy, and auditability and taxability of sellers.
My understanding is that a Taler is a "use-once" note - you create it from a payment provider balance, then you can transfer it to someone else, but then that person then has to redeem the coupon, they can't transfer it again (at least not using the cryptographically secure protocol - they could give someone else the private key, but clearly that wouldn't be safe). So transactions in Taler look something like this: 1 convert payment provider balance to Taler note 2 send Taler note to someone else 3 recipient converts receipt back to payment provider balance 4 create a new Taler note (go to 1). The anonymity should derive from the fact that the receipt note can't be traced back to the original spendable note, and the time delay between the creation of the spendable note and the redemption of the receipt note (so arguably the system requires some level of minimum activity to achieve a practical privacy guarantee).
So in that sense it is quite different from the account or UTXO logic that most cryptocurrencies use, where balances can be transferred between accounts indefinitely. I think it's interesting to think about what problems it solves - it semi-solves anonymity in a way that might be acceptable for lawmakers and that doesn't require a backdoor (the more typical approach for 'compliant privacy'). The question is whether that is enough utility gain for regular users to justify the overhead - it seems like a simple transaction requires quite a lot of steps, key management is a non-trivial burden (for users who might not even be used to password managers eg),...
> actually decentralized transactions between two offline parties can take place.
The schema they use to explain the system's mechanisms clearly shows an exchange that needs to be audited:
> Payments are made after exchanging existing money into electronic money with the help of an Exchange service, that is, a payment service provider for Taler.
That is, the transaction can be offline, but it eventually needs to pass through a central point to be effective.
GNU Taler has been in development since 2014 (10 years now!). I'm very happy to see European Commision's interest in this privacy-protecting technology. Along with GNU Net and GNU Social (amongst others), it seems like one of those technologies that have a huge potential to make internet a better place for everyone.
While many consider GNU projects to be vaporware with development pace of a turtle, it seems that the turtle is slowly starting to lead the race. GNU Hurd has also had significant news lately [0]. I'm feeling really hopeful about this, especially after the somewhat recent RMS lynching campaign that was lead by major corporations.
If I could rig my browser to pay 1 cent for every newspaper article I read, I would happily do so. The biggest issue with paying for news is that you are reduced to a small handful of sources. I would like to read a couple of articles from a hundred sources, not a hundred articles from one source. Not sure this platform solves the problem, but it would be a game changer if it did.
> If I could rig my browser to pay 1 cent for every newspaper article I read
Define "read". And "article". Should you get charged for every link preview you scroll past on Twitter? (see lawsuits! the publishers think you should, or at least that this is copyright infringement)
Can I build a page with one "article" plus one thousand hidden iframes each of which also contains a one-cent "article"?
Who polices fraud in this system? How much does it cost?
> Can I build a page with one "article" plus one thousand hidden iframes each of which also contains a one-cent "article"?
It should be up to your user-agent (aka the browser) to implement your decision and protect you from scammers, just like it happens in the rest of scenarios.
Not quite. GNU Taler's reference implementation requires explicit user consent for payment. But as GNU Taler is Free Software, you are free to modify the code on your system (and share your with others) to not require an explicit confirmation if you prefer that. Or even better, to add an option to do that on some "trusted" sites which you make configurable for each user via settings. I don't know if the risk is worth the UX improvement, but a key contribution of GNU Taler is that it is a Free Software payment system where you actually have the full four freedoms. Use them!
While what you say is completely valid, that doesn't save the original argument by pcj50 which was made up claims about the ability for scammer to drain your wallet. Of course you could build your own implementation that allows for such an attack, it is not a valid criticism of the project.
Indeed, I just wanted to point out that the "game changing" desire of entropyie to fully automate payments can still be done with GNU Taler. So you are right that the scammer in the default deployment won't succeed, but additionally entropyie could still totally get what entropyie wants as a feature on their own system (and conceivably make this reasonably secure, too).
Yeah, I know of one example where idea was actually created and pitched to media outlets.
They did not like the idea. They very much more like the idea of owning the customer and keeping the customer paying subscriptions.
I also know of a media outlet which incentivizes customer to go from credit card payment to automated bank transfers, since credit cards expire every x years but the bank transfer goes on forever.
I tried to use flattr a few years back, but the UX was horrible and for something that needs to become ubiquitous to be useful, that's not the kind of mistake you can afford.
Not hard enough. The problem with this model is that it would be vendor agnostic and no one wants to be the "dumb pipe". Everyone wants to own the entire system, ergo, proprietary payment systems (Google/Apple/Samsung/Microsoft/... Pay).
A long time ago, Mozilla had a prototype of this, but it never took up, in part because there was no standard for web payments. Then Brave claimed to be working on this, I don't know the status. I believe that Chrome had someone working on this, too, at some point, but the project vanished.
> The initial investment into the required infrastructure is low and the payment mechanism operates more cost efficiently than existing payment solutions, with lower transaction fees - a benefit that will be shared by consumers and merchants.
> This makes even micro-payments possible, creating an interesting and privacy preserving alternative to subscription- or advertisement-based revenue for newspapers and other publishers.
My impression (which might be unfair since I haven't used the Taler system) is that this looks like a technically better but practically worse version of payment systems which already exist in parts of Europe like the Polish Blik, Swedish Swish, Norwegian Vipps and the one they have in the Netherlands (I forgot the name of that one).
In "the real world" I really don't want to be dealing with a wallet of electronic cash stored on my computer. What I want to be able to do is relatively seamlessly pay for a curry or send my friend some money I owe them or something.
And the word thaler is a shortened version of Joachimsthaler. Joachimsthal was the place where the silver for the coins was mined. And the second part of that, thal, is cognate with English dale.
Very interesting! Dale is anachronistic in English by now I guess. I've only read it literarily as in "over hill and dale" and otherwise thought of Tal as valley in German.
These examples under Essays feels obnoxiously dystopian; it's just a demo environment of course but I really hope that's not the feature where were heading into, in which every single link/piece of information on the Internet is locked behind payment.
Doomsaying aside, here in Poland nearly everything can be paid with BLIK payments system - whether it's something you purchase on the Internet or small groceries at shop around the corner. You can also withdraw/depo money by ATM or do a small transfer to someone's else phone number
Great news from a project that deserves a close look for those not familiar with it already. Taler is very close in term of mindset to what Ripple was, as originally developped by Ryan Fugger, before helm changed hands and it became the commercial farce known as today's incarnation of Ripple / XRP.
How is that one private? It is coupled to your bank account so your purchases can be nicely tracked, and to add insult, you also need to use your bank's crappy online banking app
Blik is explicitly not private in that sense, you have to trust your bank to use it. Not sure what they meant by that. However if your bank has a crappy online banking app and you live in Poland then you should probably change bank. The bank apps I've used as a foreigner living in Poland have all been essentially flawless (even using the English language versions).
Do you really suppose anyone in the EU will allow you to maka any payments that are completely anonymous/untraceable?
I do trust my bank, if I wouldn't trust them I would find another one.
I don't see what problem taler is supposed to solve.
Money streams would not be completely anonymous. Only the end user would be anonymous. And, the competition are not necessarily only banks, but shady, non-EU middlemen such as Visa, MasterCard, PayPal etc. where it is well-known that they sell your data wherever.
Each country's banks/tech firms have invented their own way that is either tied to one app or the banking system/bank account. It is not anonymous for the buyer, and it always requires a central server for every transaction. From what I gather GNU taler solves those problems.
> This payment system is different from current online payment methods, like credit cards or bank transfers, in that it offers privacy for the buyer: neither merchants nor banks can trace or link the payments.
Banks will love a solution that completely prevents them from implementing KYC/AML regulation they are required to follow.
Truly baffling that such a project manages, if their claims are true, to get public funding after years of crypto grift scandals.
Tbh, the hit to omniscient funds traceability is not that different from what some financial institutions started to accept with Stablecoins already, i.e. a model where KYC/AML happens at the edges but not within the transaction graph itself. It's pleasantly surprising to see this model getting acceptance in the regulatory spheres.
> It's pleasantly surprising to see this model getting acceptance in the regulatory spheres.
The only way this gains regulatory acceptance is if the KYC/AML regulation is moved to the audited exchange - I.E. less friction for authorities to get transaction informations, not more.
If you ever want digital cash then that digital cash has to offer the same benefits real cash has: anonymity from the state. Until then you're stuck with credit card companies selling your data.
> Taler does not require any Blockchain technology, and is also not based on proof-of-work or any other distributed consensus mechanism. Instead, Taler is based on blind signatures. However, it is theoretically possible to combine Taler with peer-to-peer crypto-currencies like Bitcoin.
> It would be possible, however, to withdraw coins denominated in Bitcoin into a Taler wallet (with an appropriate exchange), which would give some benefits over plain Bitcoin, such as instant confirmation times.
It's a federated system/protocol that doesn't have a currency of its own. There should be Exchanges you are supposed to trust, that accept your CURRENCY_NAME and give you anonymous tokens (think of it as electronic cash) in exchange. You spend them in Merchants' shops. The Merchants claim the CURRENCY_NAME back from the Exchanges. No one knows what you bought but the Merchants can be audited by the Government to be taxed. That's their plan as I understand it.
No it's not. GNU Taler doesn't use a blockchain, as a blockchain cannot implement digital cash: in a blockchain, transactions are necessarily centralized — on a distributed ledger, but still account-based —, so they are effectively equivalent to wire transfer, i.e., just accounting entries: they cannot take place between two offline parties like you can do with actual cash. Also, blockchain-based digital "money" (quotes because there is no such thing, "cryptocurrencies" are purely speculative securities and that's it) need to be at the same time the currency, the long-term storage, and the transaction system.
On the contrary, GNU Taler is only a transaction system, and uses advanced cryptography and infrastructure that allow it to be bearer-based, i.e., actually decentralized transactions between two offline parties can take place. It can actually do digital cash, with buyers privacy, and all.
That said, I'm not saying we need such a technology. Only that it's clearly not cryptobro bullshit.
I guess they would. But my take on it is that the very title of the Bitcoin whitepaper contains two lies.
> "Bitcoin: A Peer-to-Peer Electronic Cash System"
1. It's not cash as so many properties of cash are not met. It is technically a simple writing game, just like wire transfer between accounts at a same bank.
2. It is not p2p. The underlying protocol that allows to maintain the distributed ledger is; but transactions, since they're account-based and only a writing game (contrary to actual cash transactions which are bearer-based), are centralized on that distributed p2p-maintained ledger. So the "cash system" (which is not that either) is not p2p.
Fear, uncertainty and doubt (often shortened to FUD) is a manipulative propaganda tactic used in sales, marketing, public relations, politics, polling and cults. FUD is generally a strategy to influence perception by disseminating negative and dubious or false information, and is a manifestation of the appeal to fear.
Thanks. I was suspicious while reading. The language makes it feel like it's an official EU project, but there's no EU branding, links to anything in EU governing bodies. At best they seem to mention they applied for eu horizon funding, which anyone can do. Very much junk indeed.
My question is: How does the average Jane and Joe benefits compared to Debit and Credit Cards? Privacy, they do not care. Being anonymous, they do not care.
My understanding here is that the main objective is to break up the MasterCard/Visa duopoly. I guess breaking up duopolies is always a win for the general public, no?
Anecdotally, privacy is actually something that people care about today. I used to think that it was mostly software geeks that cared about privacy, but during the past few years there's been so much discussion about various privacy issues, as well as discussions in my community etc.
Young people in particular care way more about privacy that us older people. In fact, young people feel way more anxiety around things that are tied to your identity.
But even despite them, I feel like even in my extended family privacy issues are increasingly very important to people. Everybody knows somebody who has been scammed.. even lost a great amount of money.
Your average user is caring more and more about security and privacy.
Re: being anonymous, I don't know. I suspect the anonymity part is more related to privacy for most people.
The other benefits of this of course is that you can make your own payment system and integration, and you won't need to be dependent upon VISA/Mastercard for your payments. Cheaper transaction fees ultimately helps lower product prices, enables microtransactions and more - I wouldn't discount how much of a big deal this would be.
I'm sure once they've finalized the whole thing, Misa/Vastercard will have employed their lobbying powers to the fullest to inject themselves into the final spec, but here's hoping.
Most people don't care at all about privacy, or at most veery selectively. There are tons of services that'd have way less users otherwise. And just a few years ago, two referenda (peoples' vetoes) against new surveillance laws in Switzerland failed miserably. In one case, we weren't even able to get the needed 50k signatures.
The EU solved that in 2015, the fee is capped at 0.3% for credit cards and 0.2% for debit cards. Call up / write to your representative in whatever country you live in and ask why your country hasn't done that yet.
Debit and credit cards are not popular everywhere. In Germany, their market share is below 50% in e-commerce transactions. In retail it's just above 50%. If you look at the overall volume, 82% of their transactions are made in cash.
Now, would they swap cash this solution? I doubt it... Privacy is a reason but not the only one.
Germany is particularly weird for that. Visiting Germany from the UK or Poland paying for stuff feels like going back in time like 15-20 years.
I have a strong memory of going to a cafe next to my hotel in Berlin and ordering a coffee and being completely shocked I couldn't pay for it by card. I hadn't even considered that I might need cash. After some conversation the nice lady in the cafe told me keep the coffee and to come back the next day with the cash. They really hate card payments for some reason.
On the other hand in Poland I've been unable to use my card in a couple of places because they only take mobile payments/Blik. The contrast is wild.
I absolutely care about privacy. Also, if I can pay the kebab shop with less fee with my phone(hopefully) rather than them putting up a note that “only cash”(because CC charges large fees), it’ll be an immediate win for me to avoid carrying wallet full of heavy coins and cash everywhere like medieval times.
You can't pay your average person with a Debit or Credit card
Edit: yes I am familiar with the various 'sending money to people' systems in Europe, but they don't rely on a debit card for the most part, rather, your bank account
Across a lot of Europe there are systems/companies which already fill this role. I'm familiar with Blik in Poland which in addition to letting you buy stuff online and in person pretty also lets you send money to an average person using only their mobile phone number.
To send a normal person money using blik you just need their phone number, this is usually more streamlined to obtain/deal with than the traditional identifying numbers for bank accounts.
To buy something online using blik your bank's app generates a 6 digit one time code which is valid for something like 2 minutes. You enter that on the website of whoever you're trying to pay rather than give them your card number and cvv. This is nice because in addition to being a lot shorter to enter than a card number a nefarious person can't reuse the code to perform more transactions at a later date (since they don't have your card number).
So in this case the two parties both need to be registered with the app and then can exchange money that they easily know e.g. the phone number.
The phone number is an id into the bilk system.
With bank transfers both parties do not need to be register with an app they just use the id that they have already for other reasons the bank sort code and id. So needs less extra infrastructure but the user interface is more unfriendly (people don't remember their bank account number).
Now if banks linked your phone number to the account number and sort code.....
The way it works in Poland is that the banks which participate in the blik system (which I think is all or most of the banks with large usership) take care of the link between phone number and account for you. You don't need to register for anything special just provide your number when you open your bank account.
There is no separate app for blik (at least as far as I'm aware) the functionality is integrated into my bank's app.
I don't think the lack of such a system in the US is for the reason you think - all you do is tell your bank to send money to the account attached to whatever phone number you enter so it should be technically possible.
As a former resident of the UK my feeling is that the lack of such system there is because most bank apps have traditionally been shit. Its probably better today but back in 2015 (when Blik launched) I would not have expected to do anything useful with my bank's app.
For something like blik to work well you need every participating bank to already have a decent mobile banking app and for them to be willing to put in some time/money into integrating the new functionality with that app. Blik started because a bunch of the biggest Polish banks got together and between them founded a company to launch the service. Its really hard for me to imagine the 6 biggest banks in the UK getting together and doing that.
Poland's banking industry also skipped a bunch of "cruft" that we have in the UK because it started after we'd already progressed past those things being relevant. My Polish bank card doesn't have a "sort code" to identify my home branch (because who the hell cares about that in 2024), Poland briefly had cheques but stopped having them in 2006 because everyone was already using cards. In tech-industry terms the UK banking system has a bunch of "technical debt" it has to work around.
yes, but they're not allowed to charge different prices depending on payment method. so they may factor those costs in - but everyone pays them. doesn't matter if they're paying cash or visa. so as a consumer I don't care about taler's lower transaction costs because I still have to pay the full price. so why should I switch? I'm happy with my visa on my apple watch.
Dutch debit cards cannot be used for online payments abroad. So the benefit is being able to make payments to, eg: Germany.
Credit cards are terrible. One has to share a few secret numbers with the merchant and the merchant then takes money out of the cards account. It relies on fully trusting every single merchant to have perfect honestly and security.
Plus credit cards have a transaction cost that is paid to foreign companies. It’s quite ridiculous that a Dutch person buying online in Germany ends up paying a tiny transaction cost to a third country.
The last time I participated in a project with all those terms (not 'next gen, it was' future', but the idea is the same), it gave birth to the legislation that forces manufacturers to keep providing spare parts 10 years after product EOL, and to provide plans for independants builders after that.
first time you will hear about this and last time.
I'm curious how those companies have budget for playing around and why they believe they will be relevant enough to have any impact on daily life for anyone at all?
From looking at the GNU Taler FAQ[1], making “p2p” payments still needs to go through the exchange, and the exchanges need to be independently audited to ensure compliance.
Ok. So, privacy?
Given that the system ultimately relies on centralized actors, it can only be private for payment amounts below any applicable travel rule amount in the given jurisdiction.
Your wallet stores digital coins and thus ultimately your computer holds your balance. The exchange keeps funds matching all unspent coins in a settlement account.
What if my wallet is lost?
Since the digital coins of value in your wallet are anonymized, the exchange can not assist you in recovering a lost or stolen wallet. Just like with a physical wallet for cash, you are responsible for keeping it safe.
The risk of losing a wallet can be mitigated by making backups or keeping the balance reasonably low.[1]
Ah. This is Chaum's DigiCash, from 1990.[2] A good idea, too early.
It's a system where coins are protected against double-spending by a database back-end. Which is how some centrally issued cryptocurrencies actually work.
The half-anonymity is interesting. The recipient is not anonymous, but the sender is. That may make it a politically acceptable substitute for cash.
It has the nice property that, unlike debit cards, etc., the recipient can't take more of your money than you give them.
[1] https://taler.net/en/faq.html
[2] https://en.wikipedia.org/wiki/DigiCash