Minting and Use of Digital Money

Abstract

Systems and methods are provided for constructing a digital money from concatenated or otherwise linked bit strings. Several applications of digital coins include (i) means to secure the use of money according to the prevailing understanding between payer and payee, (ii) a method by which a mint entity that mints and redeems digital money collaborates with traders to jointly earn interest, or jointly gamble in the stock market, or other markets, (iii) a method by which a mint entity that mints and redeems digital money collaborates with merchants, their customers, and credit-extending entities (CEE) to allow the CEE to extend credit to selected group of customers, so that these customers can shop with any participating merchant, and (iv) a method for utility consumption on a real-time basis by splitting digital coins at a rate that pays exactly for the utility measure being consumed.

1 . A method to mint digital money by constructing a coin from concatenated or otherwise linked bit strings: 1. Coin identity string, 2. Coin value string, V, 3. Coin interpretation string, I, 4. Coin attributes string, and 5. Cryptographic parameters string, such that the identity of the coin is expressed in the bit identity of the coin value string, which is built as a random string, or as a sufficiently high-quality pseudo-random string, and where the value of the coin is expressed in the coin interpretation string, I, via parameters which relate to the value string, V, and where the I parameters define a substring of V which is the extract-value string that reflects the identity of the coin while the other bits in V are random noise and have no bearing on the value of the coin; and where the coin attributes string specifies terms of payment expressing any logical condition that has to be satisfied before the digital money (coin) is regarded as ready to be used as payment (redeemed). 
     
     
         2 . The method of  claim 1  where the interpretation string identifies the starting bit (s) and the ending bit (e) of the extract-value string, and also the $/bit or other common currency per bit value, d, such that the value of the coin is given by d*(e−s+1). 
     
     
         3 . The method of  claim 1  where the interpretation string identifies the starting bit (s), and the ending bit (e), of the extract value string, and also a $/bit or other common currency per bit value, d, and also a bit count m of bits: s, s+1, s+2, . . . S+m−1, such that the numeric value of the m-bits long string, M is a multiplier so that the value of the coin is given by: d*M*(e−s+1−m) 
     
     
         4 . The method of  claim 1  where the value string V contains more than one extract-value substrings, and where the value of the coin is the sum total of the values of all the extract-value substring. 
     
     
         5 . The method of  claim 1  where a first user pays a second user in a time driven or an event driven mode, by having both the first user and the second user share two coins with the same respective string components, only that the value interpretation substrings indicate at any moment the attributes of the value strings for the first user and the second user, as they are moving bits belonging to the value string from the first user to the second user effecting the continuous payment. 
     
     
         6 . (canceled) 
     
     
         7 . The method of  claim 1  where the terms of payment specify a named entity, (individual or organization), identified by unique attributes, such that only that named entity will be allowed to redeem the digital money (to be paid in nominal currency for its face value), and such that all others will be denied the option to redeem the digital coin, 
     
     
         8 . The method of  claim 1  where the terms of payment specify a group of entities (individuals or organizations), identified by unique attributes, such that only members of the specified group will be allowed to redeem the digital money (to be paid in nominal currency for its face value), and such that all others will be denied the option to redeem the digital coin. 
     
     
         9 . The method of  claim 1  such that a member of the group specified as allowed to redeem the digital coin, (coin claimant) identifies itself by name, ‘name’, to the coin redeeming authority (CRA), and the CRA returns a random number, ‘random’ to the coin-claimant, which the claimant submits along with his name to an administrative authority of the group named in the meta-data of the coin, and which said administrative authority signs with its private key producing a signed signature of ‘name’+‘random’, such that the coin claimant then submits the signed ‘name’ plus ‘random’ to the CRA, which the CRA then decrypts with the public key of the group administrative authority in order to authenticate the coin claimant as a bona fide member of the group specified in the cryptographic parameters string of the digital coin, and so concluding the CRA redeems the coin in favor of the coin claimant. 
     
     
         10 . The method of  claim 1  such that the terms of payment string specify a starting redemption date and an expiration date, such that the digital coin cannot be redeemed before the starting redemption date, and cannot be redeemed after the expiration date. 
     
     
         11 . The method of  claim 1  such that mint entity that mints and redeems digital money collaborates with traders to jointly earn interest, or jointly gamble in the stock market, or other markets, by having the trader pay the mint the investment sum, and the mint, counters by issuing the trader a digital coin for the face value of his investment, and the mint also, right away deposits the trader's money in an interest bearing account, or the mint is purchasing certain valuables in a stock market or another appropriate market, and such that any profit or loss from the investment is shared between the mint and the trader in pre-agreed proportion, and also such that all the time between minting the coin in favor of the trader, and the time of redemption of said coin, the trader may use the digital coin, as if it were ready money, pay an obligation with it, or purchase goods and services, such that the recipient of the coin, and anyone to whom the coin is paid subsequently, also does not request the mint to redeem the coin. 
     
     
         12 . The method of  claim 11  such that a group of traders agree to exchange digital coins used for investment as in (6) only inside the group, to satisfy mutual obligations, and exercise mutual transactions, all the while insuring that these investment digital coins are not submitted for redemption before the group decides so, and when redemption is exercised, then the profits or loss from said investment are shared within the group as pre-agreed. 
     
     
         13 . A method by which a mint entity that mints and redeems digital money collaborates with merchants, their customers, and credit-extending entities (CEE) to allow the CEE to extend credit to selected group of customers, so that these customers can shop with any participating merchant, the method comprising the minting of unpaid digital coins marked in their terms-of-payment as ‘paid on demand’ (POD), and the mint conveying said POD marked coins to a CEE, which in turn conveys said coins, per its risk assessment, to some selected credit-purchasers (individuals or organizations) such that the credit purchasers may use said coins with any participating merchant of their choice, and said merchant submits the POD-marked coins to the mint for redemption, and such that the mint, in turn, requests the CEE to pay the mint the nominal value of the digital coins submitted for redemption, and such that if the CEE pays the mint, the mint, in turn, pays the participating merchant, which, in turn, releases the goods or services to the credit-purchasing customer, and thereby concludes the credit based transaction, except that the CEE and the credit-purchasing customer still have to settle the credit-purchase between them. 
     
     
         14 . A method to pay for utility consumption on a real-time basis by splitting digital coins at a rate that pays exactly for the utility measure being consumed; the digital coin being latched into a utility usage device equipped with a computing apparatus that matches the consumption of value bits from the latched digital coin to the real time consumption of the utility; the utility flow is stopped when no more payment bits are available. 
     
     
         15 . The method of  claim 14  whereby the split off (paid) value bits erased, and the utility company is paid when the digital coin is purchased. 
     
     
         16 . The method of  claim 14  whereby the split off (paid) value bits are accumulated in a receiving coin (bit container), and from where they are being returned to the original latched coin, in the event where the utility consumer generates a measure of the utility which is being sold back to the utility company, as is common with electrical power. 
     
     
         17 . The method of  claim 14  where the paying coin is in a form of a tamper-resistant hardware, and where a validating cryptographic protocol is used to verify the paying coin as bona-fide. 
     
     
         18 . The method of  claim 14  where the paid bits are sent to the utility company which eventually redeems them with the mint.