Quote from: Foxpup on February 02, 2014, 08:11:50 AM

You haven't answered my question. How do nodes verify that a person making a transaction actually owns the external unit?

they can't (at least not by only using only tools available within the network), and that is where trust issues re-appear.

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And how do you prevent that person from spending that external unit elsewhere outside of the network?

same story. but this holds for all metacoins or alternative networks (such as Ripple)

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Since it's external, and the transaction only happens on the network, the unit itself hasn't actually changed hands. The original owner still possesses it, and the new owner has no way of physically obtaining it. Explain how this problem can be solved without requiring a central depository.

well, you don't need a central depository, but you do need to trust e.g. the company that issues stocks (when each stock is represented by one unit within the network), the company that stores your gold etc

at least the public ledger provides transparency and will limit people's and businesses' abilities to deceive the people they transact with.

So i guess there is a fifth reason for including a built-in currency, namely that as long as it is only used as a currency (and not as a vehicle for a metacoin) it eliminates the trust problem which is something that doesn't work for an external currency represented in the network by a unit