Instruments

Open Transactions supports different types of financial instruments...

• account transfer (a signed message, given to the bank, asking to transfer funds to another account),
• digital cheque (a signed message, given to the recipient, authorizing bank to transfer funds when presented),
• digital vouchers (like a cashier's cheque. Funds are transferred to bank, who then issues a cheque. Bank becomes payer),
• digital cash (Like a real cash withdrawal. Funds are transferred to bank, who then issues chaumian bearer certificates),
• NEW: Now supporting markets (with trades) and payment plans.

Here's a little chart to show some of the differences between these instruments:

CHARACTERISTICS OF INSTRUMENT	INSTRUMENT TYPE
	DIGITAL CASH	ACCT TRANSFER	CHEQUE	VOUCHER
Can have a specific recipient:	NO	YES	YES	YES
Must have a specific recipient:	NO	YES	NO	NO
Can have a blank recipient:	YES	NO	YES	YES
Must have a blank recipient:	YES	NO	NO	NO
Can be cancelled by sender:	NO	YES^	YES^	YES^
Creating instrument removes funds:	YES	YES	NO	YES
Payer has "benefit of float":	NO	NO	YES	NO
Instrument might bounce:	NO	NO	YES	NO
Instrument might be already spent:	YES	NO	YES	YES
Guarantee of receipt:	NO	YES	YES	YES
Guarantee of funds (when good):	YES	YES	NO	YES
Instrument created online:	YES	YES	NO	YES
Payment must be online:	NO	YES	NO	NO
Instrument verified online:	YES	YES	YES	YES
Has an expiration date:	YES	NO	YES	YES
Money kept by bank upon expire:	YES	NO EXPIRY	NO	YES
Money kept by user upon expire:	NO	NO EXPIRY	YES	NO
Record created when instrument is:	NO	YES	NO	YES
Sending a payment creates a record:	NO	YES	NO	NO
Accepting a payment creates a record:	YES^^^	YES	YES	YES
Unlinkable to recipient:	YES	NO	NO	YES^^
Unlinkable to ANYONE:	YES	NO	NO	NO

^ Assuming it is canceled before it’s accepted by the recipient. (Once a transfer is accepted, or a cheque is cashed, it cannot be canceled anymore.)

^^ Unlike digital cash, (which is unlinkable by anyone), digital vouchers are traceable by the bank, but the information is hidden from the recipient, who instead sees the bank as the sender, just like a cashier’s check. (In the case of a voucher, the recipient could serve the bank with a subpoena to find out the sender’s identity. But with cash, he could not—that becomes impossible.)

^ ^ ^ When you receive a digital cash payment, you will most likely want to deposit it immediately, or exchange it for a new token, just to make sure your money is safe. When you do this, the bank doesn't know where the token came from, and it has no way of knowing who you will eventually spend it to. It also has no way of knowing whether you just received this token, or whether you are just exchanging the same one over and over again (or whether you are exchanging a pre-existing token from your wallet that was about to expire.)

BUT the bank can still make a record that you exchanged a token, which is why I say here that a record could be created with cash, even though I also say that it is unlinkable. Remember, the tokens all have the same expiration dates, they all have the same denominations, and the bank cannot see where they came from, and the bank cannot see where they are going, and the bank cannot prove how much of them you actually have.

UPDATE But!!! the bank can provide a web interface over HTTPS for exchanging tokens, so that even people who are so paranoid they don't even want to even OPEN an account at all can STILL receive tokens, exchange them, and use them for payments. This easily satisfies the "bearer-only" crowd: as long as the https interface is operated by the same entity as the transaction processor, you don't have to open an account at all. (See main wiki page for a link to a diagram showing this "full-anonymous" mode.)

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Here are some nice, graphical diagrams of some of the instruments (these diagrams are for the Ricardo transaction server).