[117804] in Cypherpunks
ecash deployment thread (Re: BlackNet Markets -- Organs? Kidneys? EBay?)
daemon@ATHENA.MIT.EDU (Adam Back)
Fri Sep 10 19:11:37 1999
Date: Fri, 10 Sep 1999 23:43:34 +0100
Message-Id: <199909102243.XAA27847@server.cypherspace.org>
To: tcmay@got.net
From: Adam Back <adam@cypherspace.org>
Cc: cypherpunks@cyberpass.net
Cc: dbs@philodox.com
In-reply-to: <v03130303b3fdd185031c@[207.111.241.66]> (message from Tim May on
Thu, 9 Sep 1999 14:24:24 -0700)
Reply-To: Adam Back <adam@cypherspace.org>
Tim writes:
> I'm glad Adam is commenting on this thread. I don't worry overmuch
> if my stuff doesn't get commented upon these days...the list is,
> after all, a lot different than it was several years ago.
The list traffic is just low (in posts which I find interesting).
Doesn't take long to hit 'n', or hold it down for 20 posts or so.
Just feels like a low traffic list.
Periodically I post a rant about how many of the contributors wondered
off due to things like moderated lists, the list moderation
experiment, and contributors wondering off to do uninteresting crypto
things in their jobs which interests are better served by strictly non
political crypto coder talk shops like coderpunks.
> But I thought this "go black" theme was more in keeping with the themes of
> yesteryear, of Cyphepunks solutions. Very few comments on it, not
> surprisingly.
Cypherpunks write code. Write code not laws etc. Too many people
getting drawn into the discussion of proposed laws, discussions of
compromises ('no compromise'!)
> At 1:56 PM -0700 1999-09-09, Adam Back wrote:
>
> >(btw. I do reckon there is a future for porn sites -- these people
> >must make money, a few months ago in there UK was a report of someone
> >who was put out of business who was taking 1.5 million pounds / year
> >(~2.5 million US$) selling porn access. Was charging 60,000 users 25
> >a year each or something like that if I recall.)
>
> Porn sites do have a future. I didn't mean to suggest otherwise.
I would've thought porn sites would be the obvious application for
anonymous ecash. I think James Donald argued this point some time
back.
Probably you could even sell ecash accepting credit card payments, if
you discounted the cash in value by the current fraud rate -- the porn
vendors are accustomed to high fraud rates.
http://www.tokensystems.com
is doing this. However I don't think they're anonymous.
If I recall from the last discussion Lucky suggested that internal
corporate payment system to avoid incurring third party banking fees
on internal payments would be a good application. I'm not sure I buy
this one -- surely the need for anonymity is not there. They can just
as easily use an entirely traceable (and unpatented) internal book
entry system. They can agree a non-repudiation contract without
needing cryptographic non-repudiation by dint of anonymity. They
can't have anonymity, anyway, they'll know which department they were
dealing with.
Bob Hettinga probably said something about geodesic auction markets,
and ecash succeeding because it would be cheaper. Sure it could be
cheaper than the current bank/government monopoly, but you've got to
get there from here. There is a big deployment hump to get over.
> And the recent account of the Boston area comments by Andrew Odzylko
> on why digital cash is still not here are instructive. (That was
> another post, the report by Howie Goodell, that should have gotten
> more discussion.)
I read it. My take on why ecash hasn't taken off is because it's a
slow starter, and the players have been going at it like a bull in a
china shop. (Spending vast amounts of venture capital, which the
fledgling ecash startup couldn't possibly hope to make returns on at
the rate they're spending money. So they run out of cash and fold.)
> In a nutshell, as I don't have time to write a long essay, digital
> cash is useful for its _untraceability_. Not for
> convenience. Expecting it to hit big for conventional uses is
> bullshit.
I figure you'd need to use the less controversial, higher volume
businesses such as say web porn access as your target market. The is
some market there for anonymity (for both distributors and consumers).
One problem with current ecash systems is that they are heirarchical
in design, the root of the heirarchy forms a big fat soft target.
Go for body part auctions as your first market and the mint would be
taken out of business fast.
Porn could tend to have that effect, as people try to push the limit,
where the mint is the only targetable person or organisation.
The resulting problem is not pretty, approaches might be:
- a 2-way anonymous ecash design where either the mint is distributed,
and each node is dynamically replaceable;
- or a protocol where the mint can be anonymous (Wei Dei's B-money is
can do this because mint's are distributed and effectively using a
scarce resource (CPU time) to mint money)
- or a mint in a jurisdiction which is willing to resist world banking
/government cartel pressure. say a robust tax haven, or a maverick
country such as perhaps Russia. there appear to be two Russian
ecash systems which claim to be anonymous:
www.paycash.ru
www.webmoney.ru
pay cash at least described their protocol which was a Chaumian
ecash variant. webmoney don't say much about what crypto they're
using other than 1024 bit RSA, however Hettinga rumoured they were
using Chaumian protocols also (perhaps because Chaum's patents
might not hold in Russia)
- or just try it, get some good lawyers, jurisdiction shop, and see
how long you survive
Your other problems are:
- fungibility -- how to get money into and out of the system in a
robust and reliable way so the cash is readily exchangeable
- ensuring relatively stable value if you expect it to be used for
value storage, for any length of time
- interfacing with non-anonymous payment systems where repudiation is
possible. eg. buying ecash with stolen credit card numbers is the
ultimate perfect crime.
And all this on a small budget because there don't appear to be any
large early returns -- the pay off would be long term. Tough problem.
> To cut to the chase, untraceable digital cash (bidirectionally untraceable,
> for obvious reasons) will likely become worth the effort when it can be
> used for buying black market or contraband items, for laundering certain
> winnings in casinos, for hiding assets, and so on.
Casinos, share dealing, money laundering, anonymous consulting
etc. might not be bad 2nd stage or perhaps for soem of them first
stage markets.
Adam
