[44843] in Cypherpunks
Re: Geodesic Payment Systems? (was Re: Meeting notes from ANSI X.9
daemon@ATHENA.MIT.EDU (Peter Monta)
Wed Dec 6 17:22:30 1995
To: cypherpunks@toad.com
In-Reply-To: Your message of "Wed, 06 Dec 1995 11:00:29 PST."
<Pine.SUN.3.91.951206104553.24528A-100000@eskimo.com>
Date: Wed, 06 Dec 1995 13:54:21 -0800
From: Peter Monta <pmonta@qualcomm.com>
Wei Dai writes:
> > [ infinite-cost risk ]
>
> ...
> The direct cost of a break-the-bank catastrophic failure is bounded by the
> amount of capital the bank has. This is because the market will not
> accept more liabilities (real or forged) from the bank than its capital.
> There may be other indirect costs resulting from dislocations, but these
> should also be proportional to the size of the bank. Therefore your
> argument is really against centralization and for diversification and
> distribution.
Why "the bank", rather than "all banks"? If there is a single
cryptographic point of failure in a widely used ecash system,
it seems unlikely that diversity would buy you anything. The
worry would not be the compromised keys of a single bank, but
rather, say, an effective cryptanalysis. I would put this in
the supernova class; it may be just as unlikely.
Peter Monta
