December 2003 - cypherpunks-legacy

We Get the Government We Deserve
by tcmay＠netcom.com 17 Dec '03

17 Dec '03

Phil Karn writes: >It really gives one pause. Is government really the enemy of personal >freedoms, or does it merely reflect an intolerant and unenlightened >general population? It's easy to make a government that responds to >the will and whim of the majority, but how can one create a government >that rises above the petty illiberalism of the people it governs to >protect the rights of the individual? Americans are simultaneously of two minds about privacy: * "What have you got to hide?" * "None of your damned business." (I don't know other national cultures very well, hence the focus on the culture I do know.) These views come out at different times in different ways, but most people express them and fail to see the dichotomy. My crusade happens to be against the basic idea of democracy itself. Yes, I am opposed to democracy and seek to use crypto as a way to bypass democracy, to hide transactions from the tax collectors and hence from "society," and to find ways to bypass national borders and the democratic or authoritarian (whichever, or both) institutions that they encompass. We get the government we deserve. The Drug War is happening because Americans shrilly say "Do something!" and would rather have the D.A.R.E. commandoes educating their kids than do it themselves. Ditto for most of the laws passed by the tens of thousands every year. (Ever wonder why we need thousands of new laws? I do.) De Tocqueville (sp?) said that the American experiment in democracy would last only until the voters realized they could pick the pockets of others at the ballot box. That point arrived at least 50 years ago. --Tim May .......................................................................... Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay(a)netcom.com | anonymous networks, digital pseudonyms, zero 408-688-5409 | knowledge, reputations, information markets, W.A.S.T.E.: Aptos, CA | black markets, collapse of governments. Higher Power: 2^859433 | Public Key: PGP and MailSafe available. "National borders are just speed bumps on the information superhighway."

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Re: crypto anarchy thoughts
by rah＠shipwright.com 17 Dec '03

17 Dec '03

At 8:17 PM 8/28/94 +0200, nobody(a)ds1.wu-wien.ac.at wrote: >Digital cash never made it off the ground because credit card >companies are now held to stricter laws about disclosing account >information, and banks provide competitive debit cards and live under >the same disclosure laws (i.e. credit/debit cards good enough for >99.99999% of the people). Furthermore, merchants are restricted from >culling purchase records to build dossiers on spending habits (or face >legal action), so manufacturers now rely on voluntarily supplied info, >usually by enticing customers with various benefits of "registering", >such as rebates, discounts, sweepstakes entries, etc. Nobody cares >that digial cash preserves anonimity, because bank and stores aren't >interested, and customers want the extra benefits that stores offer to >add their name to their database. Any argument which uses anonymity as the first cause for implementing a digital cash system deserves to lose. Like sophisticated engraving, intaglio printing, and a zealous anti-counterfeiting effort, strong crypto and zealous anti-double spending efforts are the technologies which enable trust in a digital cash certificate for it's own sake. The trust of that certificate is what lowers costs a transaction using it to the point where vendors don't need security deposits to back up their credit card float, and where direct connection to a trusted third-party aren't necessary for that or a debit card transaction. It also obviates the need of identifying who you get it from. It's money that's the issue here. Same as it ever was. Privacy, and maybe even crypto-anarchy or anarcho-capitalism, is the icing on the cake. > >For this reason, offshore banks don't fare too well since the digital >cash they issue generally isn't spendible. It is convenient however, >if you need to transfer money from one account to another. But you >have to go to a "money broker" who will exchange your digital cash for >spendible cash, and pay a transaction fee. A digital cash issuer (an underwriter) doesn't have to be domiciled in an imaginary foriegn country in order to survive. It can sit in New York, or Boston (I hope...), or (horrors) Washington DC. I expect that maybe someday banks may eventually hold portfolios of outstanding digital cash, and it's easy to see an eventual secondary (derivative) markets for bundles of digital cash, in the same way mortgages are handled. It's also easy to see how it will be easier to leave it the underwriters to handle the stuff in the beginning, and for a bank to get commissions for referring customers to a specific underwriter. In this model, the "money broker" is actually the issuer and the bank simply is an agent, like in traveller's checks. Cheers, Bob Hettinga ----------------- Robert Hettinga (rah(a)shipwright.com) "There is no difference between someone Shipwright Development Corporation who eats too little and sees Heaven and 44 Farquhar Street someone who drinks too much and sees Boston, MA 02331 USA snakes." -- Bertrand Russell (617) 323-7923

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RE: Golbal Econ.
by rah＠shipwright.com 17 Dec '03

17 Dec '03

At 7:35 PM 8/28/94 +0100, p.v.mcmahon.rea0803(a)oasis.icl.co.uk wrote: >An "internet economy" needs a basis of trust, as well as security >mechanisms appropriate for the current level of IP security. What basis >of trust do you envisage? Most of this can be done in civil law. It's done all the time in the securities markets. If you have certificate which is collateralized, by an agreement between the issuer and the purchaser, and thus the entire transaction chain until the certificate is redeemed, monitored by an independent trustee, then you have a stable exchange mechanism for internet commerce. International trades of securities like this are made in amounts in the trillions of dollars every day. All collateralized bonds have this feature. The extension of this to an offline digital cash issuance agreement is trivial. Secure transactions are here already. They're obtained by using public key crypto to pass transaction information, including the digital certificates and any information or software, or purchase order/invoice, between buyer and seller. Cheers, Bob Hettinga ----------------- Robert Hettinga (rah(a)shipwright.com) "There is no difference between someone Shipwright Development Corporation who eats too little and sees Heaven and 44 Farquhar Street someone who drinks too much and sees Boston, MA 02331 USA snakes." -- Bertrand Russell (617) 323-7923

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Cash, cheaters, and anonymity
by tcmay＠netcom.com 17 Dec '03

17 Dec '03

(As I said in another post, Netcom has a seriously broken mail system. Sorry for the delays.) I'll try to only respond to a few of Hal's good points, so as not to have too long a post here. His points are elided unless included. >Tim has made a lot of good points, and I'll only try to respond to a few: > >>NEGOTIATED PROTOCOLS TO REDUCE RISKS > >>However, just as most folks make arrangements with their bank/ATM machines >>(semantic meaning #2 of "ATM") to limit cash withdrawals to, say, $200 a >>day (it varies), so too can digital cash arrangements make similar >>contractual deals to limit losses. Some possible plans: > >>* Plan A: The protocol insists on retinal scan or other biometric >>authentication between the "smartcard" used as the cryptographic keying >>device and the putative owner. The "Thunderball" plan. (issues: preserving >>anonymity with biometric authentication, spoofing of the channel between >>card and physical apparatus, theft of smartcard, etc.) > >In Demolition Man, Wesley Snipes plucks the eyeball out of the victim to >hold it up to the retinal scanner and escape. Hacked-off thumbs may provide >similar workarounds for fingerprint protection. Maybe what we want is Yep. part of the reason I dubbed it the "Thunderball" plan: in that movie, almost 30 years ago, a stolen nuclear weapon is armed by spoofing the retinal scanner with a stolen eyeball (or maybe it was fake contact lenses...it's been awhile). Given the stolen nukes theme, it's amazing that the debate has shifted so little in 30 years. (ObCrypto links: Gus Simmons, who most of you should know about via his "Contemporary Cryptology" book and his work on subliminal messages, was the *main guy* on the "Permissive Action Links" (PALs) used to secure American nukes. I asked Whit Diffie, a close friend of him, if it was true that Simmons and others leaked security info to the Soviets to help them to secure their own nukes against unauthorized use...apparently they did, with the approval of the U.S. government.) ... >I think this is where the tamper-proof wallet idea comes from; it is the >closest anyone has come to providing truly conserved digital cash. With >such a system you can get the benefits of on-line clearing even in the off- >line environment, just as people will accept cash today without taking it >to the bank first. As I remember the observer protocol (Chaum's "Scientific American" article, August of 1992, as I recall), a trusted manufacturer is needed. Tamper-resistant modules, etc. This still allows spoofing. I know that off-line clearing, in which I get my money at some time after the transaction, is a whole lot less satisfying that receiving confirmation from my own agents/bankers that the money has already been transferred into my account. I agree that various protocols will exist, at various prices, with various benefits. .. >I think this is the key point. All of our speculation about the relative >advantages of the various forms of cash is largely irrelevant, as long as some >form of privacy-protecting payments comes into existance. Then the details >of the implementations will determine the relative costs and the market >advantages of each approach. The hard part will be getting that first cash >system in place. Which a free-market person such as Hal agrees with, of course. The market will ultimately evolve various protocols. Provided that regulations do not stop certain approaches, of course. ... >>([...] My use of the term "claim" >>here is of the "You present the right number, you get access" kind. Like >>the combination to a safe. The train locker idea makes this clearer, and >>gets around the confusion about "digimarks" of "e$" actually _being_ any >>kind of money it and of itself.) > >Dollar bills got their start this way. At one time they were just "claims" >on the real dollars in the bank vaults. Yet most people find it more con- >venient to think of them as money, even back when you could still turn them >in for gold. I think it's useful to think of ecash as being money as well, >although granted it is money with its own characteristics different in some >ways from banknotes, checks, or coins. The plethora of financial instruments, derivative, etc., will be echoed with digital money (indeed, some existing instruments already overlap with digital money, albeit not yet of the Chaumian flavor). For example, traveller's checks evolved to fill a niche for a form of money which could be "lost or stolen" and yet still be replaced. Don't leave home without it. Lots of niches exist, and many new ones will be created. >One thing I think is clear is that off-line cash will not be issued to >anonymous recipients. Imagine a magic quarter which would reappear in >your pocket after you put it into the coke machine. How many people would >be willing to resist using it? That's what you'll have with an off-line >coin issued to a pseudonym. We agree. Protocols I've seen make off-line cash problematic. "There is no digital coin." But on-line cash can be, and hence will be, issued to anonymous recipients. It's already done, with numbered Swiss bank accounts (at least in the past), and with the train lockers I mentioned. People put money in train lockers anonymously, then give the key to others, in exchange for goods and services (drugs, return of kidnap victims, etc.). > >>And as networks get much faster, expect even off-line cash to fade. Depends >>on costs, insurance rates, benefits, and of course on regulations. > >This is probably right, although ironically the infrastructure for off-line >cash might be simpler. On-line cash needs 24-hour availability, quick >(nearly instantaneous) response, a fully automated cash validation system. >We have this now, with the Visa cards, but it didn't appear overnight. And >I doubt that the Internet is a suitable communications medium for it (due >to reasons of availability, reliability, and security). Off-line cash could >be handled with longer turnaraounds in a machine which is not on the net, >using manual intervention so pass words and such are not stored on-line. >Of course the disadvantage is that the off-line cash requires identity >authorization during issuing. Yes, it requires an infrastructure. But for reasonable-sized transactions, the few cents for a current VISA transaction would be lost in the noise. Even if more computations are needed (as they will be, presumably), on-line transactions will be manageable for the larger transactions. Very small transactions (buying snacks and newspapers) can be handled off-line. This is already done, as when people buy "subway cards" that are semi-tamper-resistant (we all know they aren't, but most people don't try to diddle them). Ditto for phone cards, parking coupons, etc. (But why bother with off-line cash for most purposes? Physical cash is convenient for such things. However, markets will decide.) >Tim's ideas about escrow agents and a credential-less society are very >interesting as well and I'll try to make some comments on them later. > >Hal I look forward to hearing these comments. Understand that I wrote that essay basically off the top of my head, pulling together some ideas that I think have been pretty obvious for a while. We don't often discuss these sorts of ideas, preferring (I guess) to correct each other on points of trivia about the flight range of the A-10 Warthog (;-}). Life on the Internet. --Tim May .......................................................................... Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay(a)netcom.com | anonymous networks, digital pseudonyms, zero 408-688-5409 | knowledge, reputations, information markets, W.A.S.T.E.: Aptos, CA | black markets, collapse of governments. Higher Power: 2^859433 | Public Key: PGP and MailSafe available. "National borders are just speed bumps on the information superhighway."

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RE: Golbal Econ.
by p.v.mcmahon.rea0803＠oasis.icl.co.uk 17 Dec '03

17 Dec '03

> >An "internet economy" needs a basis of trust, as well as security > >mechanisms appropriate for the current level of IP security. What basis > >of trust do you envisage? > Secure transactions are here already. ... for parties with established commercial relationships. > Most of this can be done in civil law. It's done all the time in the > securities markets. If you have certificate which is collateralized, by an But the contractual agreements upon which these transactions are based don't scale too well to the [small] vendor / casual purchaser sector, which I guess the term "internet economy" is intended to encompass. The most likely basis of trust for this sector is not going to be achieved through each transient buyer-and-seller pair-instance entering into an explicit contract to enable the seller to believe the buyer's electronic [proxy-]promissory note - but by an extension of the current mechanism for telephone or mail-order payment, with the trusted third parties being VISA, AMEX, etc. While CommerceNet is the most prominent make-the-internet-safe-for-business initiative, it still only expects to have 1 million customers within five years - a goal that is modest enough given today's Internet user base, and growth rates. Even so, industry analysts consider this goal ambitious. Expectations for an internet economy based on techniques above and beyond the ability to securely send one's credit/charge card details are unlikely to be fulfilled in the short/medium term. - pvm

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Re: Golbal Econ.
by p.v.mcmahon.rea0803＠oasis.icl.co.uk 17 Dec '03

17 Dec '03

> > All payment mechanisms require a basis of trust - so > > that the seller knows s/he will get paid . > The above bank/vendor/customer/mix scenario seems the > simplest to start out with on the Internet at this time. Indeed. But what I have still not seen in this thread is an articulation of a business case for existing financial institutions to support the putative [on|off]-line payment mechanisms - in particular as an alternative to charge/credit cards for one-off transactions. - pvm

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RE: Golbal Econ.
by p.v.mcmahon.rea0803＠oasis.icl.co.uk 17 Dec '03

17 Dec '03

> I would like to help get an internet economny going! For the internet > to become a source of greater revenue I'd like to see a system that > can securely make business transactions that we are all happy with. > The amounts should be small transactions compaired with selling a car, All payment mechanisms require a basis of trust - so that the seller knows s/he will get paid - and hence rely on trusted third parties (governments, banks, charge card company etc), and/or need to be supported by specific explicit seller-buyer contracts. Current (commercial) electronic business transactions are underpinned by contracts, and security mechanisms appropriate to the risks associated with the carrier of the transaction. An "internet economy" needs a basis of trust, as well as security mechanisms appropriate for the current level of IP security. What basis of trust do you envisage? - pvm

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Not me PGP-tweaking
by John Young 17 Dec '03

17 Dec '03

Responding to msg by tcmay(a)netcom.com (Timothy C. May) on Sun, 28 Aug 12:58 PM >My ire at John Young came from his apparently malicious >"tweak" at me in which he sent me PGP-encrypted mail Warn't me, Tim. Still too crypto-knobbie without the skill for PGP mail or post. I got lumped with other tweakers while trying say a humorous word on your behalf. Ah well, so much for humor in the midst of a spat. I'll duck next time. John

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Re: PGP fanatacism
by tcmay＠netcom.com 17 Dec '03

17 Dec '03

An anonymous (why?--afraid to use your own name?) person wrote: >Earlier, Tim May wrote: > >> Not only do many of us not do all this stuff (have you seen Eric >> Hughes signing his messages? How about John Gilmore?), but some people >> have decided to stop reading e-mail altogether. Donald Knuth, for >> example. A wise man. >> I'm happy that you PGP fans are thoroughly infatuated with using PGP >> for everything. Just knock off the clucking and sighing about those >> who don't see it as the end-all and be-all of today's communications. >> It reeks of fanaticism. > >Interesting. I wonder what this says though... cypherpunks promote >encryption, digital cash, dc nets, data havens... > >but wouldn't ever be caught actually using any of the above. > >Hell, that stuff is way too plebian. I'd rather advocate it that >actually be in the uncomfortable position of following my own advice. Anonymous flames are one thing, but incorrectly characterizing points of view is another. I and other Cypherpunks clearly use PGP at times. I just don't like having to jump throught the hoops of downloading my mail to my home machine and then decrypting it....I do most of my casual mail reading in "elm," on Netcom, as I am online for several hours a day, and downloading is an interruption. (There's also the issue of "on-line" or immediate clearing vs. "off-line" or delayed clearing....I see an encrypted message to me while I'm reading my mail in elm....I have two main choices: log-off, fire up Eudora, download my mail, decrypt the PGP message, or, defer the reading until the next time I download my accumulated mail. I often forget about PGP-encrypted mail until I happen to see it again, which may be never.) "All crypto is economics." And too often the effort of reading encrypted messages turns out to be not warranted. My ire at John Young came from his apparently malicious "tweak" at me in which he sent me PGP-encrypted mail immediately after my post explaining why PGP-encrypted mail takes me longer to read. That his message was utterly banal and was not worth decrypting was the proximate cause of my anger. (He claims it was an "accident." Maybe. But seeing that it was the first PGP message to me ever, and it came shortly after my comments, and was banal, I have to conclude he thought he was jabbing me in some way, making some meta-point.) Many Cypherpunks are running shell scripts and the like to make running PGP easier. Mostly on machines outside their control, where the secret key and the passphrase can be captured any number of ways (as others have also explained). This is illusory security. OK for playing around, but to lecture people like me that we should not be bothering with using PGP only on our secure machines is folly. PGP and mail both have a long way to go. In the meantime, I prefer to concentrate on the things I do pretty well, like writing and thinking. I'm not a Unix jock like many of you college students or C programmers, and I like it that way. To each their own. I don't have a Unix box at home, only a Unix account on Netcom's machines (and this is a 14.4 dial-up account, not a SLIP or PPP connection). That's life. Anonymity is OK, but I encourage critics to come out from behind their wall of anonymity and give their actual names, or at least use a digitally-signed pseudonym, so we can know we're talking to the same person. (I suppose Mr. Nobody will use this to claim that "Cypherpunks are against anonymity.") --Tim May .......................................................................... Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay(a)netcom.com | anonymous networks, digital pseudonyms, zero 408-688-5409 | knowledge, reputations, information markets, W.A.S.T.E.: Aptos, CA | black markets, collapse of governments. Higher Power: 2^859433 | Public Key: PGP and MailSafe available. "National borders are just speed bumps on the information superhighway."

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New Cypher ListServ (part 2) **REVISED**
by David Downey 17 Dec '03

17 Dec '03

The Cryptography-Politics-PGP-L ListServ is in operation.(We just finished up with the majordomo scripts and the like). Here is what you need to do to join. BTW, this list is a digested list. Please do not freak if things do not go right straight from the get go. I hope to have this as painless as possible, yet we all know that Murphy wrote Murphy's Law just for this instance. Please bear with me. Once again, ANY suggestions, short of flames, will be listened to 100%! Now for the nitty gritty. SUBSCRIBE/UNSUBSCRIBE TO Cryptography-Politics-PGP-L ===================================================== Subscribing ----------- To subscribe, send the message subscribe Cryptography-Politics-PGP-L to majordomo(a)cyberspacetechnologies.com Unsubscribing ------------- To unsubscribe, send the message unsubscribe Cryptography-Politics-PGP-L to majordomo(a)cyberspacetechnologies.com Posting ------- Messages sent to Cryptography-Politics-PGP-L(a)cyberspacetechnologies.com will be posted to the entire list. Digests ------- When subscribed, send message to majordomo(a)Cyberspacetechnologies.com with get Cryptography-Politics-PGP-L-digest as the message body. ______________________________________________________ Get Your Private, Free Email at http://www.hotmail.com

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