August 1993 - cypherpunks-legacy

Encrypted cypherpunks list
by hfinney＠shell.portal.com 20 Aug '93

20 Aug '93

A reminder to old subscribers, and a notice to new: I have some software running on this system (related to the remailer software) which can be configured to send a PGP-encrypted version of the list to subscribers. This way you can receive this "subversive" material without any local system operators knowing what you are doing. Send me your address and PGP public key if you'd like to be put on the encrypted list. Hal Finney hfinney(a)shell.portal.com

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parallel DES thread
by nfe＠scf.nmsu.edu 20 Aug '93

20 Aug '93

nobody@alumni... please write me. nfe(a)freedom.nmsu.edu

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Re: mailing list <-> newsgroup ?
by mbriceno＠aol.com 20 Aug '93

20 Aug '93

gtoal(a)gtoal.com writes: >Admittedly, if [Cypherpunks] comes in with your real mail it would be a pain. It does come with my regular mail and yes: it is a pain. >But I'd rather keep it as email than news just to keep that cretin >Sternlight out :-) I stopped reading the PGP news group. This Sternlight guy is monopolizing-and thereby destroying- the discussion. Better stay a mailing list. --Marc

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Fiat currency: Re: Electracy: Evil Revisited
by wcs＠anchor.ho.att.com 19 Aug '93

19 Aug '93

(Most of this is diatribe, and I wasn't sure whether to Cc: cypherpunks, but there's some relevance to creating digital currency near the end.) Paul Moses writes: > Sorry, but today's currency system is anything but a democracy. Thank God. > It works because it is entrusted to a COMPETENT elite. Gack, sputter, foo, bletch! The currency system works so *badly* because it's trusted to an elite who can abuse it for their own power and enrichment. It works as well as it does because currency *is* a market, so it's subject to the usual price (all the market will bear) and power is subject to the usual limits (overabuse leads to revolution), and the elite is competent enough to know how much it can get away with. Yes, an incompetent elite is usually worse (e.g. the old Argentina or Israel), and democratically controlled fiat currency is inherently incompetent (the Golgafrinchians in HHGTTG declaring leaves to be money, etc., and their current US version, the Populist Party.) But fiat currency, anywhere, any time, can always be abused, and eventually is. Hard currency, such as gold, or silver, is subject to market fluctuations, but there's some inherent value, and a fair amount of local stability. Consumable commodity currencies, such as tobacco, alcohol, cows, and grain, have their obvious drawbacks, but they're very useful in pre-industrial societies (including the US up to the mid-1800s), and use reappears in badly trashed economies (immediate post-WWII Germany, when the alternative was fiat scrip deutschmarks, which were rapidly being printed and inflating.) In all of the non-fiat systems, the value of the "currency" is variable, but *you* decide what value *you* place on it, relative to the market. In fiat systems, *somebody else* (maybe "everyone", maybe an oligarchy) decides not only what value they place on it, but what value YOU must place on it. It's backed, not by trust, but by theft and threat of violence or default; witness the US confiscations of gold and legal tender laws, or the current Russian replacement of old rubles with limited quantities of new ones. Non-fiat soft currencies, including Green Stamps, private banknotes, etc. work ok because the issuers realize they are subject to the constraints of the market, so they have to maintain the goodwill of their customers, either through backing with harder currencies, goods or services, or through expectations of future backing with them. That's easiest to maintain if you're a provider of services, or if you're (for example) providing a convenient storage/exchange of other currencies. In addition to US and other government fiat currency, I also use a variety of private currencies - checks and credit cards, which are agreements to provide quantities of real silver money, (or substitute Federal Reserve private banknotes instead); New York Subway Tokens and New Jersey freeway toll tokens, which are agreements to provide services; Joe's Coffee Pot money, which is an agreement to provide addictive drugs :-). I know and trust Joe, and he'll either provide the coffee out of the accumulated coffee profits, or his own pocket, and I'd only be out a buck if he defaults anyway. I somewhat know and distrust the New York and New Jersey transportation bureaucracies, but they'd take too much political heat if they defaulted, and the price for their services never decreases :-), so I'm willing to risk 1-20 bucks, and tokens are a bit cheaper than cash in NJ. I use credit cards mainly for convenience; merchants are willing to give me stuff in return for my signature on a credit card bill because they trust the credit card provider to generally pay up. Merchants in the US generally accept US traveller's checks, because they can get cash for them cheaply and quickly; merchants in Central or Eastern Europe either didn't take them, or gave me less than face value for them. If we're going to start using digicash, and want people to accept it in return for goods and services, we either need to back it with services (like email or remailing or software support or freeway tolls), or we need to back it with other-currency transport/delivery/storage services the way credit cards and travellers checks do, or find some other reason for people to want the digicash and trust its value-stability. > [Elitist stuff about mob rule under democracy, deleted] I agree with most of what you say there. I'd be happy to have a system where the public could BLOCK new legislation, or get rid of old legislation, but just not make new stuff; the catch is how to implement it in a way that doesn't get the positives and negatives mixed up. Bill Stewart

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Re: Traveller's Checks...
by Peter Wayner 19 Aug '93

19 Aug '93

Many banks make money on float. Could digital cash pay interest? I guess the bank could append a date to the cash and mark up the value when it is "spent", but that might compromise some of the anonymity. I'm sure the bank would volunteer to guard our anonymity in the strictest sense by not paying the interest. -Peter

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new tran
by cme＠ellisun.sw.stratus.com 19 Aug '93

19 Aug '93

I've just modified tran to operate off the histogram of inputs and have posted the code to sci.crypt. It's also available from me by e-mail. - Carl

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Cypherpunk DES distributed DES last post
by nobody＠alumni.cco.caltech.edu 19 Aug '93

19 Aug '93

Since the list keeper has requested, let us let the DES parallel breaking die, for the time being at least. I mentioned a possible Cypherpunk project to set up a network of parallel DES de-cryptors linked by cryptographically secure anonymous remailers to avoid obvious detection (although one could argue all those flops in the night might speak for themselves). A quick test shows the Sparcstation IIPX doing about 100 decryptions per second in a typical unloaded system from a user account (these are relatively small decryptions...we assume here we are decrypting a text which only a small portion needs to be decrypted to reveal its appropriate entropy measure). Or over eight unused hours at night, in the neighborhood of 3 million decryptions. Let's even assume we can marshall 5000 similar machines through our combined talents, that's 15*10^9 decryptions. Keeping in mind the total 56-bit keyspace is 72*10^15, we're still talking around 5 million nights to solve the problem (~13,000 years). If we want to solve one system per month, it looks like we can only handle about 38 bits worth of keyspace. Not very impressive. So, until the next technological leap, we can probably forget about this.

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Traveller's Checks...
by Peter Wayner 19 Aug '93

19 Aug '93

I think that American Express wouldn't be interested in anonymous cash because the most important "feature" of a traveller's check is the lack of transferability. Once they're bought, only one person can spend them. Still, there might be people interested in anonymous approaches. -Peter

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Re: Physical to digital cash, and back again
by nobody＠shell.portal.com 19 Aug '93

19 Aug '93

As usual, Hal Finney writes an excellent post on digital cash. However, some assumptions need to be addressed. > [triangle model divides the world into banks, shops, and customers] > Customers would thus primarily turn real cash > into digital cash which they send to vendors; the vendors then turn the > digital cash back into real cash. In its first few years of operation (at least), a digicash currency will be of highly uncertain value and reputation: Currency will: * Be of questionable legality in some jurisdictions. Once they catch on, governments will actively suppress it. * Lack a track record. * Be able to purchase only a limited number of specialized information services -- the customer won't be able to use it to buy groceries, make house or car payments, etc. Thus, as a customer, the *first* thing I will be concerned about is the ability to convert my digital cash into currency that can be used to purchase physical goods & services in my local jurisdiction. Specific application #1 -- an information worker or contractor being payed in digital cash will want to convert that digital cash into local currency, early and often. Specific application #2: customer deposits money into an account to pay for online services. In most cases the customer will be concerned about refunds and return of unspent funds. Specific application #3: on-line casino, with digital cash chips. Casino customers' first priority will be the ability to "cash out" with as little hassle as possible. Now we could stretch things and call the person who wants to cash out the "shop" (especially for case #1), but then the necessity of a user-freindly system would apply just as much to shops as it would to customers. Better to have a symmetric relationship between agents rather than dividing the world into customers and shops. Any of these agents may wish to make payments in either direction. In many cases the amount of payments will be quite assymetric, but in most cases the ability to make secure payments both ways should exist. This gives us the following model: (using FRNs as the local legal cash currency): ------- | | v | FRN bearer acct <--> d-cash acct <-> agents | ^ ^ | | | | v ------- physical cash > [customer] sends another check > to the bank and gets another batch of digicash. Not a good idea, checks are not private! Try cash or money order.

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Digital money prototypes
by hkhenson＠cup.portal.com 19 Aug '93

19 Aug '93

I wonder if the various precidents set by traveler's checks might be useful in developing digital money. If American Express (or some similar) got into the game, it would be rather interesting. Keith

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