The ALTA Account FAQ

by J. Orlin Grabbe

What is an ALTA account?

An ALTA account is an asset lodgment account held by a Laissez Faire City cybercorporation in good standing. Corporate charters are issued by the City Clerk of Laissez Faire City (LFC). ALTA assets may include currency deposits, shares of certain stocks, certain types of warrants, and whatever other assets (such as gold) that the system is equipped to handle.

Who provides and services ALTA accounts?

As of July 15, 2001, new ALTA accounts are maintained and serviced by the Digital Monetary Trust (DMT). The information in this FAQ only relates to the new ALTA accounts created after July 15, 2001.

What are ALTA accounts good for?

ALTA assets may be freely paid and received in the ordinary course of business among ALTA participants at small transactions costs. As such, the ALTA system represents a private and confidential monetary economy taking place outside the confines of the nation-state. Assets may be also transferred outside the ALTA system into the ordinary global economy. Such transfers are, however, more costly and transactions lose their confidentiality outside the system.

Can individuals or corporations chartered by local or national government entities hold ALTA accounts?

No, they cannot.

How are Laissez Faire City cybercorporations formed?

There are two types of LFC cybercorporations—holding corporations and IBCs. Information on these corporations is available at www.lfcity.com.

What is the relationship between ALTA accounts and DMT?

ALTA accounts are held in the DMT worldwide computer network, and serviced by DMT servers. There are, however, several differences between ALTA accounts and DMT accounts:

1. DMT accounts are totally anonymous and may therefore be held by anyone or any entity. ALTA accounts are by contrast only available to LFC cybercorporations.

2. DMT transactions are conducted using DMT client software (a "DMT browser"). ALTA transactions are made using ordinary web browsers, such as Internet Explorer or Netscape Navigator, which make a secure connection to the DMT server.

3. The DMT client database (containing digital signatures on the customer's account information) is held on the customer's own computer. The ALTA client database, which contains the account information for an ALTA corporation (its "ALTA portfolio"), is located on the DMT server itself.

4. Since access to the ALTA system first requires a connection to the corporation's ALTA database held at the DMT server, the (possibly anonymously-held) cybercorporation can have its access to its ALTA accounts blocked by the DMT server. If a cybercorporation loses its corporate charter, or is no longer in good standing, it must close out its ALTA account, and further access to the ALTA system will be denied.

How does an LFC cybercorporation open an ALTA account?

The City Clerk of Laissez Faire City will issue the corporation an initial user name and password, which will allow the corporation to access the ALTA system. Upon logging in for the first time, the corporation must change its user name and password. Thereafter only the DMT server can locate the corporation's ALTA account database, and no one—including Laissez Faire City itself—has any information concerning the ALTA corporation's account transactions.

How is the privacy of an LFC cybercorporation protected in the ALTA system?

There are numerous mechanisms.

When one cybercorporation pays another, payment is never made directly to a user name, cybercorporation name, or even ALTA account number. Nevertheless, this payment can be made with the confidence that only the proper party can collect the payment. Payment is made to an ALTA claim number, which is a one-way function (a hash) of the payee's account number. Thus, even another cybercorporation is unable to keep records of payments to a particular ALTA account number (as opposed to a claim number).

From the point of view of the corporation receiving payments, new account numbers can be freely created for special purposes, and can later be abandoned and the funds transferred to a new account. Thus, over time, there will not only be no list of transactions associated with any particular account number, but the account numbers themselves can be removed from the server database at the cybercorporation's own discretion.

Of course, any corporation may choose to keep any internal records it desires, at its own discretion and risk. But the DMT server and the system of cryptology prevents spying on the financial affairs of a cybercorporation.

The ALTA system, except for the front-end interface, uses DMT technology. A technical description of DMT's anonymous account system may be found at the following location:

http://zolatimes.com/V3.45/dmt2.html.

A different description, that covers the same material at an intuitive level, may be found at:

http://orlingrabbe.com/DMT_simple.htm .

What keeps a cybercorporation from acting unethically?

LFC cybercorporations live by their reputations. They will lose their charter if they engage in scams or fraud, and thus must close their ALTA accounts. For information about LFC cybercorporations, see www.lfcity.com.

What happens to money placed in ALTA accounts?

The new ALTA system is operated by DMT, and must follow DMT rules. For information on the DMT balance sheet, see

http://zolatimes.com/V3.44/dmt1.html,

for an explanation. Essentially the ALTA system must hold its assets in the form of cash; high-quality, short-term securities; or gold. Commercial loans, long-term or otherwise risky securities, and risky assets (excepting a small investment in gold, which is a risky investment) are prohibited. In particular, loans cannot be made to Laissez Faire City entities—such as LFCIT, MUNICORP, or DODGE CITY—all of which would fall under the category of commercial loans.

What is the relationship of ALTA accounts to the Dodge City ATM?

The ATM system is separately managed and owned from the ALTA system. We assume that convenient transfers between the two systems will be made available soon.

How is access to ALTA accounts protected?

An LFC cybercorporation must provide its user name and password to access its "ALTA portfolio." Thereafter, each ALTA account is protected by a passphrase.

Why do you require the passphrase to be a minimum of 32 characters?

That's the minimum needed for reasonable security. After all, it is the LFC cybercorporation's assets. If it wants to leave its money lying on the sidewalk of a busy street corner, it's okay with us. But if so, it should stay the hell out of the ALTA system.

What is the ALTA network?

The ALTA network is the DMT network. This involves computer servers in different political jurisdictions, which communicate over the Internet by end-to-end encrypted packets which form a virtual private network (VPN). For more information, read the DMT-faq:

http://orlingrabbe.org/dmt-faq.htm .

[This is version 1.0 of the ALTA FAQ. If there are additional questions you would like to see the next version address, send your comments, questions, and (if appropriate) suggested answers to ALTA-faq@lfcity.org.]


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from The Laissez Faire City Times, Vol 5, No 27, July 2, 2001