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Creditz: “The World’s First Digital Currency” [bullshit]
Innovative yet retarded:
The Creditz Digital Currency System is a new alternative currency that transforms reward points, frequent flyer miles, loyalty points and other non-cash currencies into a digital currency, which will be used the same as cash at participating national retailers, merchants, vendors and manufacturers.
Consumers will earn Creditz currency when they buy products wherever the logo is displayed. Thus Creditz digital currency is a new form of customer reward, but it will always be in digital form and cannot be withdrawn. Once earned it can be spent the same as cash: one Creditz = 1 cent.
The company’s partners and alliances include IBM, Merrill Lynch, First Data, Verifone, and Scrip Advantage.
Contrary to what they claim on their website, Creditz (talk about an abyssmally stupid brand name!) is simply *not* the world’s first digital currency. Not even close. The only thing which is KIND of cool about this system is that it will allow you to transfer value between entirely different systems of currency. I wrote about these issues here and here with relation to gift cards as complementary currency.
The thing that SUCKS SUCKS SUCKS about this is that you can put value into the system but you cannot remove it. That is, you do not own it; the system is designed to SUCK your money up into its bowels and forever clench your value behind its electronic sphincter. It is anal-retentive with your money: a digital penny-pincher. Why would you give your money to a bank that you can’t withdraw funds from?
Prediction: This service will gain some notoriety amongst people who *haven’t* been following *real* developments in complementary currency, and will fool people into thinking it really is the world’s *first* and therefore *only* and *best* system of digital currency. So they will probably make a good bit of money, but they will not provide a viable system for people who are going to alternative currencies out of a desire to have greater control over personal and shared value and its exchange.
PS. Creditz people: your branding fucking sucks. Your website looks like it’s from the goddamned late 90’s and the language you’re using is as transparent as the flaws in your business model. Creditz? Come on. Give us a little more “credit” than that. With that kind of idiocy, you should at least be targeting teenagers, like QQ coins or Cherry Credits, because people who are old enough to know better are not going to pump value into your system - especially if they can’t get anything back from it. [Note: That was a freebie because I’m a nice person. Any further tips will cost you.]
PPS. Regular people: Systems like this MUST be built around open frameworks. Do not willingly adopt one which is not or you’ll be sorry down the road. RipplePay and LETS are destined to put closed corporate-controlled systems like this to shame over the long haul, because they are built around sustainable human values.
[via the Evolution of Money]
October 29th, 2007 at 4:52 pm
I learned about e-gold back in the late 90s–which I think is the first digital currency. I had been reading up on the Liberty Dollar, and somehow stumbled onto it. It was very popular for hyips and similar online schemes. Alot of patriot types were making use of it, but I also got the impression alot of shady characters were using the system too to funnel money around.
J. Orlin Grabbe was the big-dog behind the Digital Monetary Trust (DMT), which was a part of some weird, Randian, anarcho-capitalist, online sovereign nation-scheme–Laissez Faire City and Dodge City. I’m not sure if DMT is still around. Supposedly totally anonymous, with no real recourse if your $$ somehow disappeared. They even had a stock-market type thing going on.
I’m more interested in local currency, whether digital or paper. I want to spend it LOCALLY.
Evidently e-gold was seized by the US government back in April.
http://www.dgcblog.com/?p=155
My impression is that digital currencies are much much more popular in Europe, particularly Eastern European nations.
a dgc blog:
http://www.dgcblog.com/
E-currencies funding terrorism and child-porn?? Worth watching:
http://www.myfoxdc.com/myfox/pages/Hom...&layoutCode=VSTY&pageId=1.1.1
http://supragold.com/
October 29th, 2007 at 5:17 pm
This is inevitable with any money system. In fact, it’s why we have money: to funnel value around. What makes that use of money “shady”? Is there a way to build a money-system that protects privacy but prevents laundering and other “negative” uses of money?
Hawala!
Me too! I’d like to have a regional currency, a national currency and an international currency, depending on what kind of trading I am doing. My currency should be tailored to where I’m going to spend it.
Why do you think they would do this?
October 29th, 2007 at 8:37 pm
http://en.wikipedia.org/wiki/Liberty_Dollar
It looks like the US Mint “reminded” people that using Liberty Dollars can get you time in the slammer. However, back in March 07, the Liberty founder sued the US Mint, and won.
I’m going to say no, but really, I don’t know. I don’t think that should be the main concern. There is a difference between anonymity and privacy. Some of these systems were (are?) promising anonymity.
The problem though is the Feds could swoop in and say it is being used to launder money for terrorists, or drugs.
Just throwing this out there, but would it need to be private? I’m the kind of guy that would automatically say yes, but I’m not sure it would have to be. What if the thing was so completely transparent that ANYONE could see? If anyone can see, would that lessen the chance of abuse by governments, as well as scoundrels?
Worried about loss of control. What would happen if we all jumped ship?
October 29th, 2007 at 9:10 pm
Which seems to be their angle of attack on a regular basis with some of the more prominent alt$ systems you’ve been describing - which is why we need to address those issues up front, in order to frame the debate before it happens and head those problems off at the pass.
So you’re suggesting that everyone’s money in an alt$ system would be totally traceable and transparent? How would that benefit anyone?
October 29th, 2007 at 9:35 pm
My computer’s security program went nuts when I clicked on the supragold link.
October 30th, 2007 at 11:49 am
“Laundering” is defined as “not telling the govt what you’re doing with your money.” Privacy and taxation seem somewhat opposed, although I suppose a tax could be taken at the time of digital certificate purchase.
DMT is not still around.
http://www.scamdog.com/freedom_projects/?view=laissez_faire_city
http://web.archive.org/web/20041010111...k.com/dmt_investigation_followup.html
Also of interest was Yodelbank:
http://en.wikipedia.org/wiki/Yodelbank
One of the cool things about ‘Chaumian cash’ is that it is anonymous UNTIL someone tries to double-spend their certificates, at which point their identity becomes recoverable. (wonder if that could provide a mechanism so that bank customers could be assured their inter-banks are backing their deposits…)
October 30th, 2007 at 12:04 pm
Wanna buy some Funland Fun Bucks? They’re good anywhere IN the park!
The real issue with the digital cash is always: how to get someone to take on the risk of accepting the digital currency in place of realer currency?
Hashcash seems like a pretty good general solution, but it doesn’t seem to have gotten much use.
We need to find a type of digital info that is legitimately worth real dollars, that at least, in principle, could be auctioned off on eBay or something. For instance, game gold that can be transferred has some innate value. Phonecard numbers do, too, there’s no need to have the physical card. I’ve been trying to think of more examples.
We need Something you could stick on freenet, tell your buddy about, and he could go dl it and convert it into some real currency.
Real cash developed to smooth barter of real goods. Most digital goods can be duplicated, but WoW gold and phonecard #s are limited resources, so maybe barter/exchange groups that deal in specialized digital info units with non-replicability will be the petri dishes for real ecash.
October 30th, 2007 at 1:04 pm
I agree, but I want to go to pains to make this a “safe” conversation for the benefit of the “watchers”
No shit! Not the first time this has come up either:
http://www.timboucher.com/journal/2007...2/no-taxation-without-representation/
I actually really like that idea. Government does provide service, so it only makes sense to support those services on some level:
http://www.timboucher.com/journal/2007...hip-between-corporations-governments/
Though, it would also be interesting to explore a tax system where you as the consumer/citizen could earmark certain expenditures through customized tax buy-ins what social programs you’re willing to support. So if you’re a pacifist, for example, your money would go to social programs, etc.
That sounds fascinating. More info or links on that, please!
I still don’t understand what that is.
Please continue! We’re getting somewhere… slowly!
I forgot about freenet! I was thinking about this last night a little bit: what if you had some freeware program which “printed” (minted) digital money. Each person would be their own bank, in effect. Couldn’t you hook something like that into PGP keys and some kind of distributed reputation system and then a local IOU exchange service?
http://en.wikipedia.org/wiki/Pretty_Good_Privacy
http://en.wikipedia.org/wiki/Whuffie
http://en.wikipedia.org/wiki/Ripple_monetary_system
I don’t know how you would deal with the technical “people can print however much money they want” type thing. You’d need the individual exchange rate service to regulate it somehow. (I need to learn more about economics and inflation) And there could maybe be public records of how much money each person has printed or something - kind of like limited signed editions of prints by an artist???
October 30th, 2007 at 1:57 pm
No, to be sure! I really mean that “money laundering” on large scale is easy and common for rich people (just incorporate overseas or flip some cattle at an auction), and not worth the trouble for us poor people, since most of our taxes are taken in sales tax or out of our checks by our employers before we’d even have a chance to “launder” them.
Chaum’s “Blind Signatures for Untraceable Payments”
http://dsns.csie.nctu.edu.tw/research/crypto/HTML/PDF/C82/199.PDF
Scientific American article by Chaum:
http://www.chaum.com/articles/Achieving_Electronic_Privacy.htm
Untraceable Digital Cash, Information Markets, and BlackNet
http://osaka.law.miami.edu/~froomkin/articles/tcmay.htm
(Tim May is a racist prick, but he thought through a lot of implications of digital cash before anyone else did, he’s a smart guy and his old writings are definitely worthwhile reading: http://www.interestingsoftware.com/mayscale.html )
RA Hettinga was on the cypherpunk list for years, and has lots of “overview” writings:
http://www.shipwright.com/#rants
keywords: “chaumian cash” “digital bearer certificates” “blind signatures”
Well, you know how public-key crypto works, right? We take a function that is very difficult to calculate from one direction and very easy to calculate from the inverse direction. So it’s cheap to encode and expensive to crack, in terms of real-world resources.
Hashcash turns it around, so we have to expend a lot of computer resources to calculate a unit of hashcash. However, the validity of this unit is very cheap to confirm! It’s a real clever idea, but seems not to have been applied much beyond spam prevention.
http://www.hashcash.org/
Yeah, check out RAH’s digital bearer certificate essays I linked a few paragraphs back.
October 30th, 2007 at 2:46 pm
Very interesting point!
Okay cool. We’re going to need to start digesting these topics so that “regular” people can read through them and get a quick overview with little or no background and learn also some of the terminology but in plain English, or else this will go nowhere.
October 30th, 2007 at 2:55 pm
Another DMT/Yodelbank type setup: eCache
http://www.digitalmoneyworld.com/ecach...nonymous-digital-bearer-certificates/
October 31st, 2007 at 11:45 am
P: thanks for the digitalmoneyworld.com blog link. Esp appreciate the May links.
Tim, re: transparency, it occured to me if everything is out in the open and traceable, there’s less chance for negative uses of the system, and so less reason for governments to be suspicious of these systems. Instead of a name perhaps just an account number publicly viewable. Agencies will seize that information anyway, why not make it viewable for all to see?
I don’t like the idea.
I looked up where I could spend liberty dollars locally, and I found I could buy firearms, gold coins and bubble tea.
Why would a regular person take the time and expense to transfer money in and out of these systems when they can just buy now with the money they already have? Is there at least a debit card attached, or a credit card that accepts payment in alt$, so that I can go grocery shopping with this money?
In my area, something like Ithaca Hours would go over better than the Liberty Dollar. The LD has too strong of a patriot flavor, whereas a homemade local currency could have more of a homegrown energy backing it.
October 31st, 2007 at 12:52 pm
The reason governments would be suspicious of any of this stuff is that it would eat into their tax base. We either need to find a way to give them taxes out of it or seek ways to reform the government so that it isn’t trying to always take what’s ours.