Token and Notational Money in Electronic Commerce

What properties of money are important for electronic commerce? We argue that both transactional and privacy properties distinguish electronic commerce systems. We provide a quick overview of the history of money. We then consider privacy provided by different forms of money, and socially desirable disclosure of information as specified by legal reporting requirements. We classify electronic and traditional commerce systems into two categories:

• token systems, which exchange markers representing value
• notational systems, where value is stored as notations in a ledger or computer.

We analyze different forms of traditional money based on the degree to which they protect the privacy and preserve transactional ACID (atomicity, consistency, isolation, durability) properties. Finally we apply our evaluation criteria to two proposed electronic commerce systems: Digicash, (Chaum, 1985; Chaum, 1992) a token-based system; and NetBill, (Sirbu, 1995) a notational system.