December 2003 - cypherpunks-legacy

Remailer Standards (was Economic Assumptions)
by rjc＠gnu.ai.mit.edu 17 Dec '03

17 Dec '03

Eric: > Enough of this. I'd rather discuss lowering transaction costs. rjc > comments on my list: > >>-- Finding out that remailers exist and what they do. > > build a remailer "who" server into each remailer > I point out this doesn't help if you don't know where the first > remailer is. What I was specifically referring to was public > education. Were remailers ubiquitous, there would be a chapter on > them in each of the latest rage of 'how to use the internet' books. > They could be a well-used service, like archie. But this has nothing to do with writing code. There are plenty of people on this list who aren't writing code, who most likely have better writing skills than CS/Engineering majors, and who have the time to write remailer faqs and evangelize remailer use. This type of project can be done in parallel with remailer development. I don't see why any priority scheme is needed. Cypherpunks, as often repeated, are not a monolithic group governed from the top-down who obey directions to focus all their efforts on one priority. > In fact, they are not. There are numerous reasons for this, some of > which are self-referential (as in, there aren't a lot of remailers > yet) and some of which are not. For example, there's no FAQ for > comp.mail.remailer, because there's no such group. Why shouldn't > there be? Maybe because it would get voted down or maybe because no one has RFD'd it yet. Nothing is stopping anyone from going ahead and doing this. An alt group would be better. > >>-- Finding a remailer to use. > > ditto > I specifically made this a separate item because it has a different > solution. Let's assume the potential user has some beginner's > document about remailers. How do they go about finding out what > remailers exist? > Well, the document could have a list of them, but that doesn't exactly > work well in the face of rapid changes. Some centrality in the > initial query seems called for. That could be a stable machine, or > some stable name, even. What the query actually looks like is less > important. This is already included in my new remailer, but I proposed a "remailer server" for keeping an up to date automatically generated list of working remailers almost a year ago (I even hacked up some partially working code for it) when it became obvious that Karl's list of remailers weren't good enough (although it was a good effort) The biggest problem is getting a stable machine or a stable network of 'DNS'-like machines. There is already a similar mechanism for MUDs. Besides the static list of running muds there is a MUD "mudwhod" server which maintains a list of running muds and who is logged into them. > There is, also, the question of trustworthiness. That mythical beast > the reputation system might be applicable, but I know of none to judge > for suitability. More generally, there are questions of policy. > What, for example, is the policy of the remailer in case of > administrative request for mappings? Are there liquidated damages > available to someone whose privacy is breached? These legal issues > are not so easily made into syntax. This type of standardization is only likely to spontaneously evolve after a remailer network is already up and running and these policy issues come up. I don't think we can centrally draft some kind of Constitution/Bylaws for remailers which covers all possible future problems. Remailer politics and legal systems are an unexplored area. I think we should leave it up to the remailer operators for now since they will have to deal with these issues first hand. > >>-- Figuring out how to use a particular remailer. > > standardize remailer help system, standard remailer command format > > (but not neccessaily the commands themselves) Sorta like an SGML for > > remailers > I think the commands ought to be standardized, just like RFC-822 > standardized on the To: field. I realize this is going to create a > little havoc for the half-dozen or so remailer developers who have all > chosen not to talk to each other during their developments. All someone needs to do is write up an RFC and submit it. > >>-- Formatting a message for a remailer. > > see above > Personally, I don't think we need multiple algorithms for this. Is > there any compelling reason, other than to avoid wasting existing but > not yet deployed code? It could be that the best encapsulation method for remailer messages hasn't been developed yet. I certainly think the recursive-pasting token method needs a lot of work. A method should be general enough to work with any RSA/Pkey system and not rely on PGP's standard format. Cut lines definately needed to be standardized abstracted away from the underlying cryptosystem. > >>-- Receiving mail through a remailer. > > Get/Creating a nice client. > There's a transaction cost to switching clients which is huge. It's > completely unrealistic to expect everyone to use a particular client > for remailers. It just won't happen. Far better is to rework > existing clients to support remailers and to get those changes into > the main distributions. Either way works, and the actual method used will probably be a combination of both. However, getting cypherpunk software installed in existing distributions will require some politics and lobbying on behalf of cypherpunks. (e.g. getting remailer mods into something like Eudora might be really hard) > >Reducing complexity cost: > > All of this could be lowered by creating an easy-to-use > >remailer client which is compiled (or perl/tcl interpreted) and > >installed with every unix out there so it becomes ubiquitous. > The dream of universal software. When I can unpack some software and > type 'make', and do nothing else except read the man pages that 'make' > caused to be formatted, I'll call that universal software. And not > before. Already exists. Almost every Unix system I have encounted comes with atleast Perl4, and many come with TCL. Perl is a standard environment and any correctly installed Perl should run a correctly written Perl script. I'd say that one can create a remailer/client in Perl that can be installed by almost anyone. (as long as you don't rely on "absolute" paths which change, or non-standard environment variables) > I'm glad lowering these transaction costs garnered a response. But > what I really want to see is, what did I forget about transaction > costs to use remailers? The biggest thing you're missing is the fact that many users can't even understand how to use LISTSERVs or run mail(1) To many people, typing "::\n request-remailing-to: xxxx" and encrypting it, then adding "Encrypted: PGP" is a huge transaction cost. I don't use remailers for similar reasons. A simple mod to the elm script, "mailpgp" which detects a remailer in the To: address, prompts you for "mail anonymously to? " and then does all the underlying remailer commands and chaining stuff automatically would be a huge benefit. Even better would be a script which asks you "Mail anonymously?" and if answered yes, it would automatically pick a remailer and do the nasty stuff. Emacs and Elm are pretty standard, plug in elisp/perl scripts would work fairly well to encourage remailer use but some evangelization would be required also to encourage use and educate. I once suggested that someone set up a porno-server on the remailer network as the ultimate carrot-and-stick method for getting people to use remailers. I still think this is a good idea. (after all, the two biggest uses of Julf's system I see are in the sex newsgroups and in IRC phreak/warez trading) -Ray -- Ray Cromwell | Engineering is the implementation of science; -- -- rjc(a)gnu.ai.mit.edu | politics is the implementation of faith. --

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PGP mail disabled ???
by danisch＠ira.uka.de 17 Dec '03

17 Dec '03

Hi, someone in Germany was posting a message about his friends mail problems: He (the friend) very often has mail contact with another friend, but sometimes mail was lost. They found out that normal mail always works well and pgp encrypted mail always gets lost. Did anyone hear about machines which don't transport pgp encrypted mail? Hadmut

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RE: Cyberspace, Crypto Anarchy, and Pushing Limits
by tim werner 17 Dec '03

17 Dec '03

>From: Blanc Weber <blancw(a)microsoft.com> >Date: Mon, 4 Apr 94 22:18:07 PDT >Actually, some of us could become quite bored and decide to go to the >beach, instead. I'd rather be riding my bicycle. The beach is boring to me, and dangerous, what with all that UV. >Sometime, someday (when you least expect it), you'll have to come out >and do some 3-dimensional living. You mean like Doom, or Castle Wolfenstein, right? :) tw

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Re: Cyberspace, Crypto Anarchy, and Pushing Limits
by Jeff Davis 17 Dec '03

17 Dec '03

I was getting laid last night and I kept thinking, "Detweiler..." So this is getting a little weird for me. I got a proposition for you guys, just to cut down on the suspicion around here, (and it's justified suspicion). I live in Laramie, Wyoming- a mere 60 miles from Detweiler in Ft. Collins. Any time I get a notion to do so, I will go down to Ft. Collins, hunt down Detweiler like a crippled dog, and spit on him. Any time I get a notion to do so. That's what anarchy is all about. BTW- I'm up and around and headed for that Fed Reserve showdown at 10:00. -- PGP PUBLIC KEY via finger! JAFEFFM Speaking & Thinking For Myself! * eagle(a)deeptht.armory.com email info(a)eff.org * *** O U T L A W S On The E L E C T R O N I C F R O N T I E R **** ***** Committed to Free Public Internet Access for World Peace *****

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Psychological Warfare Primer
by Jeff Davis 17 Dec '03

17 Dec '03

Since we are engaged in Revolutionary War in Cyberspace, it would behoove us who are actively participating to have a delineation of strategy, tactics, and operations of guerilla warfare eidetic to this medium. Our Guerilla Warfare Operating Area, (GWOA), is the internet, with its peculiar strategic advantages and vulnerabilities. The genius of Patton's campaign in North Africa was the result of simple reading comprehension skills; he read Rommel's book. This primer on psychological warfare is prepared for your perusal offering fundamental intelligence to increase the probability of success in engagements with the competition. It's been said that every revolutionary was a patriot. Our competition has different ideas about patriotism and vastly superior resources. Little is known about the operations of the US intelligence community. If one is going to play hard ball with the big boys, one needs a general understanding of the game before the first pitch is thrown. The DOD view of Vietnam was essentially to train men and test new weapon systems. In this respect, the Vietnam War was quite successful. This point was reiterated ad nauseam during the Gulf War on a daily basis via a sharply censored 4th estate for the duration of conflict. The contrast of censorship in the interest of National Security between the Gulf War and Vietnam is quite marked. The DOD official statement the day of the initial bombing of Iraq made no mention of B-52 strategic bombing missions. Only the tactical missions were announced publicly. Bernard Shaw's awestruck reports from his hotel window in Tehran were broadcast live on CNN. With heightened exclamation he reported a new sound of the ensuing battle, a sustained roar like thunder that refused to quit. From the ground, a conventional B-52 strike is a quarter mile wide, 200 feet high, and travels at 700 mph. There is no sound on earth like it. Having known Pentagon spokesperson Pete Williams since high school, I found it vaguely amusing that he saw fit to inform the rest of the world of B-52 involvement in the bombing several days latter. In Vietnam, we had the grunt's down in the #10 latrine stepping on cockroaches piped into our homes by the US networks nightly. Occasionally the hands playing Cowboy's and Indian's, (LURP's- reconnaissance, locate and identify missions, as opposed to search and destroy), got some air time. Then there was the Harvard/Yale game. The public knew it existed, but heard very little about it. Spooks have their own language. The first principle of psychological warfare is to dehumanize the enemy. Everything is a football game to them. The Administration's policy decision on Clipper, 4 February 1994, would be a, "Double Whammy End Around." The FBI Digital Telephony Bill would be a, "Forward Pass." These analogies were expressed to the public by pilots returning from Persian Gulf combat missions during interviews. No big deal folks, just another football game, and we all know what fun football is! Surgical is not synonymous with random evisceration of innocent men, women and children. Remember the luckiest man in Iraq? Swartzkoff stood by a screen with laser guidance cross hairs centered on a bridge. As a vehicle entered the picture he drew our attention to it with his pointer and followed it's path directly through the center of the bull's eye. "And in his rear view mirror-" Stormin' Norman gloated, the entire bridge was annihilated. The truth of the Gulf War is just now leaking to the public. Let's take a look at the roster of the competition's coaches and quarterback strings. The heavy weights are the DIA, NSA, and CIA, in that order. The CIA is a central clearing house informed on a need to know basis. The NSA obviously has a clearer channel of classified access. The Defense Intelligence Agency, as has been published, is composed of several independent operations reporting to a specific Admiral or General, each with their own S-2 sections. Thus, operations are very difficult to compromise. The CIA is prohibited by its charter from engaging in domestic operations. The DIA is not. These folks are the best on the planet. The other day I was logged on in a friends account at an educational site showing her the ropes of Cyberspace. Out of curiosity I ran an arbitrary finger on the American Embassy in Moscow. Unbelievably, it worked famously. User names and real names of everybody logged on scrolled by on the screen. It's nice to live in an open society. Another friend stopped by and I attempted to demonstrate the phenomenon again. I swear to God, this time I popped up in the San Diego State educational computer. The third time I was dead in the water. The last log on in SDSU's computer was "COSOC Just Passing Through". If I remember my history correctly, this whole EFF thing started over the 911 codes being posted to Usenet. Instantaneous caller location identification capability became generally known. The idiot kid who threatened the president got an autoresponder from Whitehouse.gov that traces the message. Minimal leg work produced the actual perpetrator. The competition is hot, but our apparent vulnerability is our greatest strategic advantage. This is like being on Acid in 1964. We are doing nothing illegal! Cyberspace, in its present state, is a very wild and free place, not unlike the Wyoming high country a few miles from me. With diligence and fortitude, it will continue to be free. The spooks can tie up a tremendous amount of time and resources gathering intelligence on Cyberians rather easily. At present, an analysis of our actions boils down to private citizens well with in their rights doing nothing illegal. One would have to be completely brain dead not to have considered the populist power of the internet. It's guaranteed we will pry power from the intelligence community with much wailing and gnashing of teeth by minuscule increments. Our greatest tactical advantages are the speed of light and non location specificity. We are highly mobile in the field and wired as well as the competition. We are by nature decentralized and deployed for maximal survivability from nuclear attack. We are virtually immune from censorship due to the internal survivability architecture of the net. We're on our own turf. We've chosen our own battle ground, brought nothing unnecessary with us, and are ready to make our last stand here and now. We are defending our homeland from invasive attack, and the 4th estate is fully aware of this. Thomas Jefferson said, "When the press is free and every man able to read, all is safe." Our operations are multifaceted and independently organized. The CPSR petition and the EFF letter campaigns work in concert, yet have not the vaguest resemblance to a Civil War Pincer attack. They more closely resemble the jump and run tactics of the Viet Cong and NVA that gave the DOD fits on the battle field and in the press. We have the ability to concentrate a great number of people on a specific operation with the added fluidity of multiplicity of tasks. The concept of truly democratizing not only the United States but the entire planet is a tremendous vision. The collapse of a Union that built its SS-18 and SS-20 missile systems on what are essentially ripped off Pac Man chips has thrown a list to the global economy. Homeostasis is a principle of the universe. Time will restore a natural balance to everything. One small voice in Cyberspace becomes global interpersonal communication at the speed of light as the net grows geometrically. Global interpersonal communication is the greatest tool for world peace our species has ever known. We have the technology to achieve virtual collective consciousness on a planetary scale. The potential of the Electronic Revolution is awesome. Instead of electing an aristocracy who's choices are packaged by mass media marketing to govern us, we have the ability to transcend the physical limitations of deceptive appearance, and illuminate the truth of being through the digitized reflection of intelligence. As it stands now, the Russians pay an information tariff on every bit they transmit or receive. Their phone system is archaic. The infrastructure is neanderthal in comparison to the US. The closest approximation to a backbone they have is an Estonian site hanging by a 80Km fiber optic thread to Helsinki, and the Glasnet site in Moscow linked by a T1. I know what this net is capable of. Consider the invention of digitized satellite navigation. The first bird the Air Force sent up could simultaneously locate 4K automobiles on America's highways. The second bird up could simultaneously locate every single vehicle on the interstate highway system. I'm one small voice in Cyberspace speaking only for myself. Psychological Warfare is the way to fly in the Electronic Revolution. When the competition has been playing hardball with the big boys globally without equal, we would to well to play Medicine Ball with the Gods instead. Keep your personal visions of justice and reciprocity tempered by altruism in your hearts, and fare you well, my compatriots. -- PGP PUBLIC KEY via finger! JAFEFFM Speaking & Thinking For Myself! * eagle(a)deeptht.armory.com email info(a)eff.org * *** O U T L A W S On The E L E C T R O N I C F R O N T I E R **** ***** Committed to Free Public Internet Access for World Peace *****

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Re: Economic assumptions
by Duncan Frissell 17 Dec '03

17 Dec '03

F >There's a piece by Kevin Kelly called "Network Economics" in the F >latestWhole Earth Review, about how better communications tech and F >changed business practices lower transaction costs and (along with F >competition and the pace of things these days) are pushing down the F >optimum size of businesses. F > F >-fnerd F >quote me Likewise "The Incredible Shrinking Company" from THE ECONOMIST of DECEMBER 15, 1990. "Computers were supposed to centralise decision-making and produce ever, bigger firms. They seem to have done just the opposite Peering into its crystal ball in 1958, the Harvard Business Review said that computers would revolutionise American business. By the end of the 1980s they would ensure that American business would be concentrated as never before. The economy would be dominated by a few giant firms. Within each firm important decisions would be made by a handful of executives with access to the firm's single, big computer. The exact opposite has occurred. In America the average number of employees per firm has been falling since the late 1960s; but more and more of those employees have a computer on their desk." DCF --- WinQwk 2.0b#1165

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Re(2): Economic assumptions
by Harry Shapiro Hawk 17 Dec '03

17 Dec '03

Evil Pete says: > > I can imagine that bandwidth in the fibersphere for text transmission > > will be too cheap to meter, which means that the cost of metering ------ From: imsi.com!perry(a)panix.UUCP, Tue, Apr 5, 1994 ------ @ Abeen some years since I noticed the cost of my electric bill. Now, @ admittedly, I'm a fairly well off person, but were my communications @ costs for a very wide band fiber connection, even if usage based, as @ low as that for my electric usage, I would never notice the cost. Interesting to note here, is that if you are paying by the bits for an Movie (full lenght feature film, etc.) and its TOTAL cost is around 3 or 4 dollars, than the cost of voice phone calls and test transfer would be ALMOST to cheap to calculate. It has been discussed that one results is your "network provider" may effectly GIVE you free long distance service if you, for examply, buy your movie "rentals" from him/her. Harry Shapiro Hawk Manager of Computer Services Warwick Baker & Fiore habs(a)uucp.warwick.com

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Re: Economic assumptions
by hfinney＠shell.portal.com 17 Dec '03

17 Dec '03

From: hughes(a)ah.com (Eric Hughes) > I point out this doesn't help if you don't know where the first > remailer is. What I was specifically referring to was public > education. Were remailers ubiquitous, there would be a chapter on > them in each of the latest rage of 'how to use the internet' books. > They could be a well-used service, like archie. > > In fact, they are not. There are numerous reasons for this, some of > which are self-referential (as in, there aren't a lot of remailers > yet) and some of which are not. For example, there's no FAQ for > comp.mail.remailer, because there's no such group. Why shouldn't > there be? There is alt.privacy.anon-server. BTW, while reading some postings in that group just now I noticed that yesterday was the first birthday of the jarthur remailer's key. Happy Birthday! Actually, I don't think most people are interested in remailers yet. Most people can't even use encryption. I view encryption as being a first step towards privacy, with remailers being a second step, protecting the destina- tion of a message like encryption protects its contents. Also, without encryption the protection provided by a remailer is not very great. OTOH, I could see someone arguing that remailer use, even without encryption, is an important privacy technology in its own right, as we have seen with anon.penet.fi. The privacy provided by that system may not be defensible against a powerful agency which can tap network links, or even for hackers who can forge mail, but it is enough for most people, most of the time. Eric spoke of transaction costs in using the remailers, but to me the biggest problem is obvious: there is no system that I know of that allows me to send or post a message pseudonymously, such that no one person knows the mapping of my pseudonym to my true name. I know that a lot of people have been talking about new systems lately, so maybe I am wrong about this. Ray's proposal would allow it, with his virtual encrypted addresses, but that is not running yet. I think this is the biggest barrier to using pseudonymous communications. Another thing worth noting is that pseudonymity has a terrible reputation on the net. Look at the complaint we saw here from Stewart Brand a few days ago. And unfortunately, it does seem that most anonymous postings are of very low quality, at least in the groups I read. Perhaps we need a concerted effort to make high-quality anonymous/pseudonymous postings in order to improve the reputation of this technology. Maybe then the books will start writing about it. (The recent newspaper article posted here was as favorable a treat- ment of the topic that I have seen.) Hal

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The AntiCash
by Duncan Frissell 17 Dec '03

17 Dec '03

To: cypherpunks(a)toad.com T >Does this system provide _any_ protection against fine-granularity T >monitoring of payer identity? Most current phone card systems allow the cards to be purchased for cash. The French VISA electronic purse smartcard assumes an account relationship with the bank as does the Nat West Monex system proposed for the UK. T >Scary Scenario: This could be the vehicle for the long-rumored T >"banning of cash." (Just because conspiracy theorists and Number of T >the Beast Xtian fundamentalists belive it doesn't render it T >implausible.) Since none of the proposed systems involve physiologic identification, they could function as cash just by giving the card+pin to someone else. Depends on what you have to do to refill them. Can they be refilled from any account or only from one account. Is it economic to just throw them away when empty. The Monex system allows two "purses" to make an exchange without an intermediate device. More cashlike. Since in America, today, one can obtain a (secured) VISA card in a nome de guerre, use phone cards bought for cash, and (soon) use VISA's own "electronic traveller's cheques" ( basically a throw away VISA card), I don't see vast privacy problems with these forms of payment. T >Make no mistake, this is not the digital cash that Cypherpunks T >espouse. This gives the credit agencies and the government (the two T >work hand in hand) complete traceability of all purchases, automatic T >reporting of spending patterns, target lists for those who frequent T >about-to-be-outlawed businesses, and invasive surveillance of all T >inter-personal economic transactions. T > T >This is the AntiCash. T > T >Beware the Number of the AntiCash. T > T > T >--Tim May Time for one of my screeds on why it doesn't matter. "Jim" our tame FBI agent at CFP '94 said that the FBI did 500 wiretaps (that they'll admit to) and one datatap in 1993. He said that they can only find someone willing to do about one datatap a year because it takes an incredible amount of time to go through the logs and there's rarely anything interesting. (Pause while hundreds scream that they will be able to deploy fabulous AI programs to scan everything and arrest everyone and convict everyone and throw everyone in jail.> 1) They don't have the fabulous AI programs yet. 2) AI programs can't bust anyone until Robocop arrives on the scene and Robocop can't (easily) bust people outside of the jurisdiction. 3) If you run AI software against something as complex as human society, you get loads of hits. So you tighten your parameters until you only get the number of hits that you can handle. 4) The feds can only investigate, bust, convict and imprison a comparatively few people a year. (The US couldn't even pull off a decent version of The Holocoust these days. It would cost too much. WACO was 80 some odd dead and it must have cost the feds $millions.) 5) AI programs *can* be used to "punish" people by withdrawing government "benefits" automatically from miscreants. This is a form of "punishment" that we can favor because it adds to the pool of those living independent lives. 6) Communication itself is the most dangerous activity driven by modern technology and it is very hard to outlaw. Communication=trade=society. 7> Communication leads to dangerous economic and social changes like action at a distance, multiplication of entities, and the ability to homestead new "space" in territory unclaimed (because uncreated) by any national state. These are generally not illegal, however. 8) Peasants bound to the soil have very few "communications sessions." They are restricted to just a few options in life yet Machiavelli had to write a whole book about the challenges involved in ruling a society in which 95% of the population was stuck in place. 9) In a few years, 2-3 billion people will be wired and capable of scores of transactions/day with other people/entities anywhere on earth. Who will/can control that volume of transactions. 10) As artificial entities/agents proliferate, it seems likely that the "average institutional size" (natural persons per organization) will be *less* than 1. If I deploy 7 software "agents".... 11) Market Earth (and the "Cybermarches" that will be its constituent parts) is too complex to rule. Duncan Frissell "We're going to free you sons of bitches whether you want to be freed or not." --- WinQwk 2.0b#1165

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VISA Electronic Purse
by Duncan Frissell 17 Dec '03

17 Dec '03

To: cypherpunks(a)toad.com For personal use only as directed... Heading #1 Search: 04-05-1994 10:09 ^S/^Q: start/stop; ^C/<ESC>: interrupt; ^T: Paging ON/OFF 2185964 PERSONAL FINANCE - Seeking the Card That Would Create A Cashless World. The Washington Post, April 03, 1994, FINAL Edition By: Albert B. Crenshaw, Washington Post Staff Writer Section: FINANCIAL, p. h01 Story Type: News National Line Count: 105 Word Count: 1164 Now that credit cards are in the hands of virtually every living, breathing adult in the country-not to mention a lot of children and the occasional family pet-and now that almost as many people have ATM cards, card companies are wondering where future growth will come from. At *Visa* International, the answer is: Replace cash with plastic. Last month, the giant association of card issuers announced it had formed a coalition of banking and technology companies to develop technical standards for a product it dubbed the "Electronic Purse," a plastic card meant to replace coins and bills in small transactions. A second coalition of manufacturers and suppliers will seek to develop low-cost equipment for use with the card. The concept is much like a Metro Farecard. Consumers would prepay-or electronically "load"-the card with a small sum, typically $40 or less, according to *Visa* officials, and carry it with them to use in pay telephones, highway toll booths, vending machines, parking meters and thousands of other small-ticket transactions. Unlike a Farecard, though, the card would be reusable. It would contain a memory chip that could exchange information with bank ATM terminals for "loading" and with terminals at vending machines and other places for payments. *Visa* envisions it both as a stand-alone product and as a feature that could be incorporated into credit or ATM cards. "There are a number of benefits to different players" in the market, said Albert Coscia of *Visa*. In theory, machines that would take the "electronic purse" would be used with small-change kinds of devices, such as phones and parking meters, so for consumers, it would eliminate the problem of having the right change. In addition, depending on what consumers want and what the technology can accomplish, the cards might have other features, such as the ability to remember specific transactions so that a consumer could keep track of exactly what he or she spent the money on and where. Budget-conscious individuals or business travelers doing their expense accounts might find that very appealing. For vendors, the card would cut the need for sorting and counting coins and carting them to the bank. The day's transactions would be totaled instantly. Also, vendors would be less likely to lose sales because a potential customer didn't have change. Since transactions would be electronic, it would be tougher for employees or others to dip their hands into the till. But while the idea certainly has appeal, it is far from certain that *Visa* and its allies can make it fly. People have been talking about a cashless society for years, but the number of cash and check payments continue to dwarf those made on plastic. Robert B. McKinley of Ram Research Corp., a Frederick research and publishing company that tracks the credit card market, noted that putting in all the terminals and other equipment "has a horrendous price to it." In addition, he said, "smart cards," those with chips in them, have in the past proved expensive to make and easy to break. Also, a smart card that replaced all your credit and debit cards as well as checks and cash would become "a gateway to your entire financial being, and without some kind of safeguards," loss or theft of the card could be a disaster, he said. Putting in safeguards such as a personal identification number (PIN) would make the card cumbersome to use for small transactions and require more elaborate equipment at the point of sale. The card "certainly (could be) a personal financial management tool" and might evolve into a global payment system-*Visa*'s goal-but it has a long way to go, McKinley said. "It's all pretty much concept stuff right now." *Visa* concedes that there are major technical and market hurdles to overcome. Coscia said the company expects that the concept will spread faster in other countries where telecommunications and on-line systems-that allow instant credit checks and debit transfers-are less developed and less established. Where such systems are not as advanced, off-line systems such as the Electronic Purse are more appealing because they offer the merchant the assurance of payment without external verification. Cards containing microchips cost anywhere from $3 to $8, depending on the sophistication of the electronics, but *Visa* officials said they think that with the volumes they envision, the cost would drop to around $1. Coscia also said that pilot programs in Europe indicate that the physical durability of the cards is improving. "Dropping it won't wipe it out," he said. He indicated that some of the apparent conflicts might be resolved through technology; perhaps it could require a PIN for credit and debit transactions but not for those that tap the prepaid funds carried in the card. As chips become more and more sophisticated, more alternatives become possible, he said. Coscia said *Visa* doesn't expect the Electronic Purse to come into widespread use for years. The purpose of the alliance is to develop standards that would ensure that cards and terminals could talk to each other no matter who makes them or country they are in. "We want to eliminate the possibility that someone gets too far down the road" with a system that is incompatible with others, as happened in videocassette recorders with the VHS and Beta formats, he said. He said the consortium hopes to have its first pilot application of its new standards operating by the end of next year. Besides *Visa*, the consortium includes two large U.S. banking companies-NationsBank Corp., based in Charlotte, N.C., and Wachovia Corp., based in Winston-Salem, N.C.-as well as Electronic Payment Services Inc. of Wilmington, Del. The non-U.S. members are Banksys of Brussels; Financial Information Systems Center of Taipei, Taiwan; Groupement des Cartes Bancaires of Paris; Sociedad Espanola de Medios de Pago of Madrid; and Sociedade Interbancaria de Servicos of Lisbon. The consortium will accept other members in the future, *Visa* said. Both critics and proponents of the Electronic Purse point to the debit card as instructive. The technology to use debit cards at the point of sale-that is, to transfer payment from the customer's bank to the merchant's bank right on the spot-was around for years before they came into widespread use, such as at many grocery stores. It was the growth of one form of debit card-the ATM card-that finally pushed them into general use. Proponents look at that history and say it is only a matter of time, while critics argue that unless some particular use comes along to give it a shove it may never go anywhere. Ultimately, *Visa* hopes to become a true international payments system. Consumers could use its cards for credit or debit transactions or in place of cash and get a single statement with all the currency conversions already done. "If you look at payment alternatives, with a credit card you pay later, with a debit card you pay now, and with a prepaid card you pay before," Coscia said. CAPTIONS: CHANGING PURCHASE PATTERNS (Graphics are not available.) Jerry Edwards helps Isabel Ernst use a credit card at the Georgetown Safeway. Card issuers are now looking beyond credit cards to a card to replace coins and bills in small transactions. ORGANIZATION NAME: *VISA* INTERNATIONAL DESCRIPTORS: Credit cards; Banking industry; Money --- WinQwk 2.0b#1165

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