[117955] in Cypherpunks
Re: Will this replace banking?
daemon@ATHENA.MIT.EDU (Anonymous)
Thu Sep 16 17:06:56 1999
Date: Thu, 16 Sep 1999 22:40:48 +0200 (CEST)
Message-Id: <199909162040.WAA03217@mail.replay.com>
From: Anonymous <nobody@replay.com>
To: cypherpunks@cyberpass.net, cryptography@c2.net
Reply-To: Anonymous <nobody@replay.com>
"Claire Wolfe" writes a paen to DigiGold at
http://www.worldnetdaily.com/bluesky_cwolfe/19990916_xccwo_will_this_.shtml:
> DigiGold is, first of all, a bearer system. Whoever holds DigiGold
> can spend it. And as with cash or gold coins purchasers don't have to
> identify themselves to vendors and (this being the Internet) it's
> even possible for vendors to be unknown to purchasers. It's private.
> Unlike e-gold, DigiGold will have no transaction fees.
This fails to point out that DigiGold does not use blinded transfers.
As Ian Grigg, designer of the webcash software, writes at
http://webfunds.org/pipermail/webfunds-users/1999-September/000008.html:
> There are more sophisticated ways to manaage this problem,
> for example the use of a blinding formula. We don't use
> it here and now, mostly for architectural reasons (and
> also partly for business reasons like the cost of the
> patents).
and further explains at:
http://webfunds.org/pipermail/webfunds-users/1999-September/000013.html:
> The infamous blinding patents are held by a company in
> Canada somewhere. These formulas allow you to sign something
> without seeing the contents, so the mint (what we call the
> issuer) can then sign a payment, deduct the value, and the
> client can unblind the signature to reveal a valid signed
> payment that the mint has never seen.
>
> There are (many) alternatives, and the method used by Ricardo
> is one. I won't list the alternatives, because apparently,
> most of the world doesn't see it, so it becomes valuable IP
> assuming they work of course :)
"Ricardo" is the ecommerce architecture designed by Systemics. SOX is
the payment system within this framework, described at
http://www.systemics.com/docs/sox/overview.html. There we read, with
regard to privacy:
> [Does it meet the goal that]
> The issuer can be prevented from pairing-up payer withdrawals with
> payee deposits[?]
>
> Due to the nature of the proposed system, this requirement could not
> be completely fulfilled. However, by creating and registering temporary
> keys, it is possible to confuse the issue, giving the users some degree
> of privacy, whilst still allowing full traceability.
In fact, the server (which is run by Systemics, now and in the foreseeable
future) can track all the payments as they move through the system from
account to account. The best users can do as far as anonymity is to
"confuse the issue" by creating some dummy accounts and passing value
through those.
This is the financial equivalent of security through obscurity. It is
no substitute for mathematically protected privacy.
In fact, all the hype in the original article about how DigiCash will
be hated by governments, loved by drug smugglers, and be the salvation
of users seeking financial privacy, is unfounded. DigiGold does not
provide a level of privacy which would justify this rhetoric. In fact
in some ways it is harmful to privacy, as the transaction information
is centralized in the Systemics server. This would be a fat target for
government investigation and subpoenas.
DigiGold and other webcash/ricardo/sox payment systems may have some good
features, but they do not provide the promised level of financial privacy.
