This whole thing doesn't make technical sense to me. Please illuminate me.
The way I read it, they want something like a debit card except the debits and credits will all be held internally on the card through some sort of cryptographic magic. The transactions will be final and untraceable. I don't have the math skills to have any idea if this makes any sense at all. But some things come to mind. What happens if the electronics in the card breaks? It sure happens often enough with the chips in debit cards. Have you just lost all of your money? I would assume so if it isn't tracked anywhere. Dollar bills have an advantage here since the printed cloth normally doesn't break or become unusable. What if I store the state of the card, spend $1000, and then restore the state? My $1000 should come back. Maybe there is some assumption that the cards cannot be read even with advanced gadgets. That seems like it would be a weak assumption with so much money at stake. I
really don't see how this could work storing the data on an ordinary sim card as the article mentioned.
Here a couple of quotes that are raising questions for me. In the bill it says:
(b) ELECTRONIC DOLLAR REQUIREMENTS.—The electronic dollar described under subsection (a) shall be—
...
(7) capable of instantaneous, final, direct, peer- to-peer, offline transactions using secured hardware devices that do not involve or require subsequent or final settlement on or via a common or distributed ledger, or any other additional approval or validation by the United States Government or any other third- party payments processing intermediary;
On the other hand the article compares it to the Military's Eagle Cash. There seems to be pretty much zero information on the web about how that works technically, however there is this:
Is the card secure?
Yes, your card is protected by advanced cryptographic technology which ensures the card is valid and the balance is accurate. If a card is lost, it can be "hotlisted" which tells card-accepting devices that the card has been cancelled. Information stored in the EagleCash™ system permits value to be restored to a lost card. A PIN is issued to secure transactions at the self-service Kiosk. Your electronic currency is secure and protected.
quote from
https://camrhon.proboards.com/thread/2806
Which certainly sounds like they are maintaining a central ledger at some point. Maybe it is only updated when it is possible for the remote systems to be online. Who knows. But it doesn't sound like what the bill describes.
Am I missing something? It sounds like something a politician dreamt up with no idea if it is technically at all possible. As someone wrote in a comment to that article
Yeah it seems to be a reaction to Bitcoin (by people aka politicians who don’t yet understand/like Bitcoin), and the privacy concerns over CBDCs. The idea is just a digital version of USD that is stored and spent locally like cash, rather than over the banking network like current digital national currencies, or through central banks like CBDCs.
Of course the problem is that this won’t work lol. Bitcoin solved the double spend problem for digital money, this Ecash concept doesn’t. It relies on the security of the device to stop unlimited money. Which of course means as soon as people start hacking through the security of these devices then the whole system is dead. Not to mention the fact that this would be like the early days of Bitcoin when people didn’t bother backing up their private keys and plenty of people lost their funds, but this loss would be on steroids here. Because with Bitcoin it isn’t actually stored locally, so you can always have redundancies in storing your private keys. But this Ecash concept suggests the cash itself would be stored locally which means if you lose you card/device/phone, or if it breaks, your money vanishes.
This whole idea sounds like it was thought up by people who wanted to have something that competes with the payment benefits of Bitcoin and sounds better than CBDCs, but they failed to understand the revolutinary importance of the problems Bitcoin solved.
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www.theverge.com
