December 2003 - cypherpunks-legacy

No Subject
by Anonymous 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- Hal <hfinney(a)shell.portal.com> said: Hal> Why don't we brainstorm a bit to see if we could come up with a way Hal> to take this digital cash software and do something useful and interesting Hal> with it. To re-work a notion expressed earlier, why not use the digital cash to purchase (legitimate) access to systems? This provides good protection against double-spending, as the act of ownership would be to change the login password. Hal> (There may also be some problems in advertising these services. ... (skipped) Hal> Folks, if you want to sell something, make sure people know Hal> what you're selling.) Perhaps we need an advertising server. -----BEGIN PGP SIGNATURE----- Version: 2.3a iQCcAgUBLcb+07hnz857T+PFAQEsvAQ0CWluaOPn6eHVl1YFwwBdu6u00Eq8bhx8 if+OmZGnUSyagVaiIiGCLuxSHCINiUO0voBSsfPBlVocSmTAtRqE7/zbDSOW1LcA gb/jJEQMGynZcCcV50Autrkgi7yLsHk7b9ksoWzVKOZxPlGNZg36ruFo6pCkDdup bBjiWGZNMsONERAZL7/J =xEaF -----END PGP SIGNATURE-----

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Re: Digital Cash
by rah＠TIAC.net 17 Dec '03

17 Dec '03

>Robert Hettinga, Shipwright Development Corp. said: >> Is it possible to see instantaneous settlement happen in the financial >> markets with digital cash? > and "Perry E. Metzger" <perry(a)snark.imsi.com> said: >In theory, yes, although one would also need to move all securities >being traded to book entry or "digital bearer certificates". >Presumably the current securities laws would require some changes. > >This of course has the potential to dramatically lower transaction >costs in these markets. I'm trying to remember the name of the guys who "buy" trades from large institutions like Fidelity. Their transaction clearing costs are supposed to be radically lower because of the automation they use. . . Something about making their money in the bid/asked spread. I'm sure the tax man will want to trace things like this (they might worry about bearer securities after they killed them off already), but there's probably a way to cut them in enough to keep them and the other regulators happy. It might be a way to institutionalize (so to speak ;-)) strong crypto somewhere with enough clout to keep the other Feds out of normal people's business. Your reference to book entry reminded me about the book value for some reason, and the flap about FASB mark-to-market initiatives. That kind of ratcheting down of the time horizon might make the financial markets try to reduce their costs, and be more open to a reduction of transaction costs. Perry, how would some one go about demonstrating the "potential to dramatically lower transaction costs in these markets"? cheers, Bob ----------------- Robert Hettinga "There is no difference between someone Shipwright Development Corporation eats too little and sees Heaven and 44 Farquhar Street someone who drinks too much and sees Boston, MA 02313 USA snakes." -- Bertrand Russell (617) 323-7923

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Who's got Tacky Tokens?
by greg＠ideath.goldenbear.com 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- I must confess that I, too, let the initial wave of interest in Tacky Tokens pass me by, and I find myself without any - and without any memory of where one gets them. I assume that once upon a time, they were available from the bank for free ..? So .. does anyone want to own up to having any? What do you want in exchange for them? Can/will the bank operator reveal how many tokens have been distributed, and how many transactions are processed per day? Are people interested enough in data havens or postage-based remailers that they'd actually use them? (And, re data havens - AT&T plans to offer "virtual storage areas" and archival storage as part of its "PersonaLink" online service allegedly to be introduced this summer. While AT&T may not be privacy-friendly, if this works it will set both technical and economic examples for other, more pro-privacy, services.) -----BEGIN PGP SIGNATURE----- Version: 2.3a iQCVAgUBLcb0v33YhjZY3fMNAQGJ6wQAkDOgix3p8dQysAHoGS8qGiZk/eQB4dJz P8p9Qmiwnl8i3WUaAGEZOjZryAA/G1w7VQG9RdYzywa9mOG9G5mpyb8pxm+/UfmY 4329r9mslLpf9vCab84XldJZB62EuEgr4rFOkqyeIkrima4F5kXAEvP/G23dGdU1 XNAsk4p8AdQ= =CJKZ -----END PGP SIGNATURE-----

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Re: Why Digital Cash is Not Being Used
by dmandl＠lehman.com 17 Dec '03

17 Dec '03

From: "Michael V. Caprio Jr." <mikecap(a)wpi.edu> > > So what is the natural currency to trade in on the Internet? What is the > medium that is most widely spread across the myriad nodes and networks that > crisscross the globe? Hot air? --Dave.

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RE: The American money capture
by Istvan Oszaraz von Keszi 17 Dec '03

17 Dec '03

Russell Nelson wrote: > > Would it be too complex and lengthy an explanation to provide to say > > how the money supply is decided in the first place; that is, how an > > appropriate amount of it is calculated initially? Is this in reference > > to the gold or other backing which gives each dollar its monetary value? > > Money supply is an arbitrary thing. We could have a money supply of > one dollar (and billionth cent coins) if we wanted. The Fed > supposedly *tries* to print up new money when new wealth is created, > so that the dollar stays at about the same level. If they didn't, > then cash would constantly increase in value, reflecting the new > wealth creation. Sorry, but cash in circulation is a very small, infinitesimally small portion of "money supply". No one in the system really has faith in M-1, M-2, and M-3 anymore, simply because they do not reflect reality. > In it's simplest form money is simply debits and credits kept on > certain ledgers. Let me present the most simple example. Alice > has a supply of money. Let's say a $1000. She deposits this in > her favourite bank. The bank then lends the money to Bob. Alice > has $1000, and now Bob has $1000. The supply of money is now > $2000. > > Nope. Alice can't spend her money. She's renting it to the bank. Sure she can, especially if she's depositted the money in a demand account. Let me simplify some more. Alice deposits her $1000, she then wirtes a check for a $1,000 and deposits it to her business account. She then writes a check on here business account and deposits it in another account, and so on, until she finally writes a check back to herself to cover her original check. Throughout the process, she has created money. Money which she can use to collect interest. This is known a s kiting and is illegal if an individual does it since they can use the created money to earn interest. As long as institutions keep accepting Alice's checks, she's creating money which she can use. > Central banks try to limit growth by using interest rates to > reduce the demand for money, and by requiring banks to post > reserves with their central bank on their deposits. > > Banks would have to do this anyway, because they have to deal with > people coming to get "their" money. They have to keep a certain > amount of liquidity. The term for that is "reserve", but it just > means very liquid investments, e.g. cash. Try a very simple experiment with your local bank. Go in unannounced and attempt to make a very large cash withdrawl. They will do everything in their power to give you a draft and not cash, since there usually is not enough cash on hand. Also call your local bank, and ask for foreign exchange. Get a buy/sell rate on sterling cash and sterling drafts. You'll be surprised to find that your sterling cash is worth less than a sterling draft. Generally, this is because cash is awkward. > So if Alice deposits $1000, and there's a reserve rate of 10%, > then only $900 can be lent, and then $810, and then $729, as the > money makes it's way through the economy. > > Right. Banks have to balance liquidity against uncertainty. > So the money went around, and around, growing and growing, until > it slowly became worthless. The only thing that keeps money > growth in check is market discipline and faith. The whole house > of cards doesn't come tumbling down, because Alice has faith that > she has $1000. In reality the emperor has no clothes. > > In reality Alice's investment is nowhere near as liquid as she thought > it was. Hers is only liquid if no one else's is. Eaxactly, most financial institutions tend to "borrow" from their customers (Depositors) on the very short term, and lend on the long term. So if all the Alice's wanted their money at once, the money would not be there. The problem in international banking was and continues to be Jumbo loans ($1,000,000,000+) which are generally syndicated. These loans when they went into default, or the risk of default trigger cross-default provisions in loan agreements which makes all loans to that borrower non-performing. Unfortunately, many institutions had a substantial amount of their capital and reserves, lent to single borrowers, so a default would make them bankrupt as opposed to insolvent. > No, most major currencies are not on the Gold Standard. They > float purely in relation to other currencies. So what gives > money it's value? Purely, the loans which back it up. This is > why it is practically impossible to stop, eco-disasters from > continuing. If the countries that have "borrowed" this money > default, the whole thing collapses. It collapses everywhere, > simultaneously. > > Well, no. As long as banks can keep collecting and paying interest > and *some* of the principal, they're mostly okay. They can rebuild > the lost principal through lower profits. The place where the "faith" > comes in is the confidence investors have that their investment in the > bank is as liquid as they thought it was when they made it. Yes, except the way banks collect interest on Jumbos is simply to lend them more money, so they can pay the interest. Look at the U.S. The entire nation simply keeps borrowing money to pay the interest on the money they borrowed. This gets added to the principal and the amount of the debt compounds. This means that next year, more money is owed, and so more money has to be borrowed to pay the interest on the money which was borrowed before. Not a pretty sight. Here in Canada, our Government actually has an operating surplus on it's program spending. But the interest costs on our accumulated debt, keep piling up, each year taking an ever greater chunk out of revenues. Now, we are cutting health care, deindexing pensions, closing schools, closing hospitals, doing whatever we can to keep our heads above water. All to pay the interest on our debt, which keeps growing and growing. > Now we get to the problem with digital money. It's a stand alone > system with no "faith" in it and with no growth built in. Faith > is the only thing that keeps things working, that and legislating > paper as legal tender, so people are forced to accept it. > > Not really, not at all. I can start issuing my own wealth receipts > (digitally or not) as long as I can show people that I actually have > the wealth that I'm issuing the receipts for. And yes, I'm subject to > keeping a reserve, otherwise how would people trust me? The trust issue is fungible. If you trust Yankee greenbacks, and my receipts rank pari-pasu, with them, then you trust my receipts. No reserve is necessary, because I don't make loans. And since I don't make loans, and don't pay interest, I'm not a bank subject to banking regulations. All I am is a trustee. > Obviously, legislating digital money as legal tender is outside > our power. Putting growth into the system without destroying > faith is also very difficult. The only logical step is to make > digital money repesent something. It must be convertable into > something that people already have faith in. Otherwise I fear, > that digital money may not fly. > > In the end, you have the right of it. Digital cash must be > convertible to be accepted. Exactly, except convertible to what? Do you want Swiss Francs? Yen? Sterling? Canadian? Australian? Gold? Oil? It depends on what you're going to use the cash for. My view is that it is up to the client to decide how they want their funds held. Personally, I have a Canadian Dollar account, which I use for my day to day purchases, and I keep a US Dollar account for when I travel south of the border. I also keep an account in Schillings.

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Re: Why Digital Cash is Not Being Used
by jim＠bilbo.suite.com 17 Dec '03

17 Dec '03

Perry E. Metzger says > Currency needs to be fungible -- your time and my time and > the time of a brain surgeon are not the same. Furthermore, > I can't verify that you are actually giving me your time. > It would be a nightmare. > I see that my post was ambiguous. I didn't mean that "time" would be the currency, rather, "time" would be the "good" purchased. For a given task, one person's time would be more valuable than another person's time. Online reputation services would be necessary. I guess what I'm really trying to say is that I believe anonymous digital cash is currently more suitable for purchasing services (time) than for purchasing goods (software, information, bananas, etc). This might change in the future when the use of anonymous digital cash becomes wide-spread. Jim_Miller(a)suite.com

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Cypherpunks *are* Coding
by Duncan Frissell 17 Dec '03

17 Dec '03

What with all the fascinating political arguments on the list these days, casual observers might accuse us of having lost momentum. Not I! Look at the progress made this Spring. We (and others not on the list) have produced not 1, not 2, but 3 encrypting file systems for DOS machines. (Where are you MAC types? I guess DOS' spastic and primitive file system has *some* advantages.) These are: Secure Drive 1.3D, Secure File System 1.0, and the new Secure Device 1.0(?). I SecureDrive and SFS are stable implementations which encrypt DOS volumes. Secure Device creates an encrypted file that DOS sees as a drive (like DoubleDisk or Stacker but without the compression). I will try out Secure Device as soon as I can get into the FTP site which has been busy. Anyone on this list with a DOS machine should have one of these running every day. DCF "3 Billion people x 50 transactions/day = A real headache for control freaks." -- DCF --- WinQwk 2.0b#1165

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Lobbying/Politics/Etc.
by Gary Jeffers 17 Dec '03

17 Dec '03

On this thread, someone expressed outrage at the idea that a terrorist incident could be staged to encourage gun control legislation. -That this was a "smear" on "bleeding hearts". Its not as simple as that Recently, Walter Williams has popularized a wonderful term used by the Communist Party - "USEFUL IDIOTS". A USEFUL IDIOT was a person who believed the propaganda of the inner circle &, so believing, worked for the Party without knowing the hidden agenda. It seems that in America, when the state does a power grab, we find at least two groups involved in pushing for the state - a ruling elite & the useful idiots. The useful idiots are a well developed group for the state gun control plan. The state is now working to develop useful idiots with regard to encryption. Useful idiots would probably not sanction terrorist incidents to further their political views & could certainly not be trusted to be involved in any such incident. I don't believe that the ruling elite would have any qualms against such an incident - only practical re- servations. Yours Truly, Gary Jeffers PUSH EM BACK! PUSH EM BACK! WWWAAAYYY BBBAAACCCKKK! BBBEEEAAATTTT STATE !

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Re: PC-Expo
by rarachel＠prism.poly.edu 17 Dec '03

17 Dec '03

> (quit, not retired :-), technician, programmer, etc. If you don't want an > editorial article, let me know what you'd like. Anything you can write will be file. Letter or Op-Ed or slap the NSA kinda article. Just keep one thing in mind. Assume they know nothing about crypto or the NSA or clipper.. Add tons of Fear Uncertainty and Deception. Make'em want to rise up and bitch to Uncle Sam.. If you can include quotes from various "Info Liberated articles", please do! > Or, I can do this. Anything you can help. Please. You don't have to do just one thing. :-) > Or, I can do this. (hey, I'm flexible, and wanna help :-) Welcome aboard and loads of help. Just send me whatever ideas you have in email to my other account rarachel(a)photon.poly.edu and I'll see if I can help you with ideas or provide some "liberated" articles. :-) Really appreciate your willingness to help.

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Magic Money at pub/mpd
by anonymous＠extropia.wimsey.com 17 Dec '03

17 Dec '03

Magic Money DOS client is at /pub/mpd, not /pub/mpj, on Netcom.

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