December 2003 - cypherpunks-legacy

LD's "Contest"
by W. Kinney 17 Dec '03

17 Dec '03

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Coming Soon From A Tentacle Near You...
by nobody＠rosebud.ee.uh.edu 17 Dec '03

17 Dec '03

This message was posted here a while ago, describing all of the nasty things we have in store for us. Right now we seem to be enjoying Operations SQUISH and Octopus. What else do you suppose he has in mind? From: smtp%"an12070(a)anon.penet.fi" 3-JAN-1994 02:01:08.99 To: smtp%"cypherpunks(a)toad.com" CC: Subj: Current Operational Status We (operation Cyberanarchist Repression and Poison) thought you might like an update of our current status and future plans. We have been extremely busy! So much has happened lately! Remember when we said, > You have 24 hours before we >launch our next cyberspatial strike. That was a reference to Operation Tick-Tick-Tick. We were really delighted with the outcome of this attack, we made very significant gains in our campaign, and there were some stellar fireworks. The sequence of Usenet posts equating cyberanarchists with drug users and Sodomites found great response. The Cyberanarchist glossary was unchallenged! We nailed the szabo(a)netcom.com tentacle mercilessly, and he is afraid to show his sickly green face any more. The Pit Bull (His Royal Eminence) showed up to make a fatal mistake in exposing the Szabo tentacle, and we nailed him some too (his brilliant smear tactics give us more ideas ourselves!). As usual, Emminent Eric has been rather quiet. We did spoof him spectacularly with that Apology feint. `I never wanted a brainwashed follower.' `Democracy stinks.' `I am the anti Christ.' Ha, ha. Tantalizing Timmy showed up a bit `out there' to further whine, evade, and threaten, and tell us that he doesn't know anything about drugs! He says he has a gun, and isn't afraid to use it! Fantastic! `The rumors about high level conspiracies and drug use are false' he says. Ooops, have you talked to Ingenuous John? (hee, hee). You guys really have to work on getting your stories straight. It's pretty pathetic. As for the BS, we don't know who it is you saw at your last Cypherpunk party and their California IDs. Must have been some cardboard cutouts! Oh, what fun. This is all in addition to the shrapnel wounds on the public lists (we have no comment on the private ones!). We appreciate your feedback in all areas. What did you think of the delightful poetry? How about the Nazi Espionage story? That brought tears to our eyes when we thought how much your own Big Macs have surpassed the Fuhrer in their own present glories and future ambitions. Perhaps the people `out there' on Usenet will be similarly impressed ... ? === Nevertheless, the Big Macs don't seem to understand that we have long since lost interest in the tentacle exorcisms, although we like to continue to play to keep our practice. We have graduated to the Big Leagues and they are still scratching their crotches in the minors. Full fledged exposure! The Cypherpunk Credit union for money laundering! the black markeeting! the tax evasion! The lies in the media! The secret mailing lists! Thank you so much for finally coming clean (or at least opening a few windows to diminish the stench) in some key areas. Our next projects should help encourage you to continue this wonderful Glasnost, where before we had the KGB. Once again, we remind you that you can relent and surrender at any time. Some of the things we are interested in at the moment: 1. Further information on the media deceptions in Wired and NYT. These are very difficult to unravel. 2. A complete status report of the TX bank and CA credit union. Maybe some more info on the `real' Chaum link. 3. A complete comment by the Big Macs on their knowledge and involvement in pseudospoofing and all the `quasi-legal' activities. 4. A complete list of all the secret mailing lists. Your subscribers to this list would probably be interested in this too, why not post it publicly? After all, they don't know that all the *real* development is being done under the table. Kind of ironic, too, how long people were asking for a `list split', not knowing that it had already been done in secret. Ah, a pity, but that is your modus operandi. But, since in the true spirit of warfare we must be prepared for any eventuality, including the continued persistence and tenacity of the enemy. So you know, here are some of the operations we are planning over the coming weeks and months, listed in scale of seriousness and potency. Operation SQUISH - a very sophisticated and comprehensive simultaneous attack on many fronts that will involve a `grass roots' approach vs. the last `top down' attack in the newsgroups. Medusa keeps asking for our complete knowledge. This will lay it all out on the table for everyone to examine -- a complete list of tentacles, Small Fries, Big Macs, Poison Needles, Medusa Sisters, and Medusa. It will also be a bit disorienting for you in the spirit of our favorite tactics of `polymorphic paragraphs'. You really seem to get a buzz from that. If you think that the last Usenet strike was bad, wait 'til you see what happens with this one! Operation Octopus - this is the multiple pseudonym and agent project. We plan to have at least a dozen (hence the name) posting simultaneously to many different lists and the newsgroups. But the overhead on this is very significant, and it will take us awhile to gear up and build the infrastructure to the point we can `engage'. You have seen more of these agents lately `out there', but our coordinated attack will take some more planning. Hopefully, these operations will crack the nut. It is already wobbling, splintering, chipping, and shaking. But this is a tough nut to crack. The following operations are far more insidious and devastating. We have been hinting about them in various places. They are our `secret weapons' -- the will require some further developments, but will be immensely effective in destabilizing your technology and `movement'. Operation Duplicity - extremely top secret. Let's just say, you will be seeing double, and triple, and quadruple, and ... Operation Apocalypse - extremely top secret. Let's just say, Robert Morris and Richard Depew would be proud ... Of course, in the meantime your list will be subject to the same drizzle of froth that has you so excited lately. And we'll probably recycle some of our better artillery to strategic positions `out there' on Usenet some more. We wish to thank T.C.May personally for all the stellar ideas in Reputation Assault and Cyberspatial Sabotage. What's good for the criminal is good for the police, so to speak! Finally, just to let you know, we are going to take a momentary breather here and scale back all the current operations somewhat to reorganize and retrench before the next onslaught, so enjoy the respite. Happy New Year! p.s. you might want to see this below. This software and attack report was part of our last strike, Operation Tick-Tick-Tick. The software for the new operations is far more complex (you know how difficult it is e.g. to track multiple identities well), partly the reason for the delay. [Long shell script and its output deleted] Key ring: 'pubring.pgp' Type bits/keyID Date User ID pub 1024/9C0865 1993/10/12 W.Meredith <Genie w.meredith(a)genic.geis.com> W.MEREDITH <GENIE> Bill Meredith BILLM3 pub 1024/2DF719 1993/08/11 Raidar <nowhere - use encrypted address> Do not send this key to key servers! pub 1024/77308D 1993/08/05 WhiteBeard 77308D <pool0(a)extropia.wimsey.com> pub 1024/7C06F1 1993/04/05 J. Michael Diehl, 3, <mdiehl(a)triton.unm.edu> pub 1024/EB2B0D 1993/07/28 Victor A. Borisov aka blaster <blaster(a)rd.relcom.msk.su> pub 1024/C0EA49 1993/08/30 Anonymous Remailer <catalyst(a)netcom.com> pub 1022/ABFBB3 1992/12/02 remailer03 <> pub 1024/69464F 1993/09/11 Sameer's Remailer <sameer(a)soda.berkeley.edu> pub 1024/9E3311 1993/09/02 Sameer's Remailer <sameer(a)netcom.com> pub 1024/567449 1993/09/01 Sameer's Remailer <cs60a-qu(a)cory.EECS.Berkeley.EDU> pub 512/606225 1993/08/11 Zaphraud (Zaphraud(a)usa.805.445.9630) pub 1024/569A09 1993/07/31 Mike Ingle <mikeingle(a)delphi.com> 12 key(s) examined.

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Re: PGP's e exponent too small? Not!
by hfinney＠shell.portal.com 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- Matthew J Ghio, <mg5n+(a)andrew.cmu.edu>, argues that low public exponents such as are used by PGP are unsafe in the RSA public-key cryptosystem. I think his analysis is mistaken, although there were a fair number of typing errors which make it hard to be sure I am understanding him correctly. > Here's why > you shouldn't use low powers of d: The issue is not whether the d power should be low; of course it should not be, since that is the secret exponent, and choosing a small one will make it easier to guess. The question is whether small e values are unsafe. I think this is just a typographical mistake. > Remember that d and e are factors of (p-1)(q-1)+1. This is the fundamental error in his analysis. The correct equation is d*e = 1 mod (p-1)(q-1) or, in other words: d*e = k(p-1)(q-1) + 1 All of Matthew's reasoning about putting bounds on d*e (he often writes of bounding p*q, but I'm pretty sure he means d*e) is based on this false assumption that d*e is a factor of (p-1)(q-1)+1. Actually, the true relation is that (p-1)(q-1) is a factor of d*e-1. The concern about low values of e in the Schneier book relates to the issue of RSA-encrypting the same value with the same low e value and different RSA moduli. This might be done if you were using "pure" RSA (which PGP and PEM do not) and encrypting the same message for multiple recipients. Kaliski is right that adding random padding to what is encrypted will eliminate this attack. PGP and PEM do add such random padding, following RSA's Public Key Crypto System standard. Hal -----BEGIN PGP SIGNATURE----- Version: 2.3a iQCVAgUBLTnW4agTA69YIUw3AQFPOAP9Hk+bwFCgF6F16Cl+WUh0ZfoUvHXLQGuV +pGVySmTe1yftSUq4NQTVMFmzHXc16MvxJjMBYgH445qpwn9EgHVHISG/YdaDsFs 9AA7c5lcgLxUPwzwkOLlUhICXyFLy+Hz9kWqE90ypd+7RFk0UiCwtIT9EsVywC0c 3GM8BKtJNJI= =/BA8 -----END PGP SIGNATURE-----

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Crypto and Taxes
by hfinney＠shell.portal.com 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- I'll just briefly recap some of the points: Hal> I don't agree with the extreme position that cryptography will lead to Hal> the failure of the income tax and the destruction of the government. Perry> No one is arguing, by the way, that all the economy will go black. I'm Perry> merely noting that whereas right now its hard to lead a normal life Perry> entirely in the black economy (you suffer from a myriad of Perry> inconveniences), an anonymous offshore banking system that you have Perry> free access to changes all that. It's not clear to what extent Perry and I disagree here. I agree that some people will exploit the new opportunities. My doubt is whether the vast silent majority on which the government depends for its taxation revenues will do so. I read the other day that the government gets something like 70-80% of its tax revenues from people making less than $35,000 a year. These people are not financially sophisticated. Duncan> In traditional Black Markets, the transactions are illegal. In future Duncan> Black Markets on the nets, most of the transactions will be legal. Duncan> Legality certainly encourages transactions relative to illegality. I agree with the last point about legality helping, but I don't understand why most transactions will become legal in the future. I thought we were talking about ways to evade laws via cryptography. My assumption is that governments would actually crack down when faced with lost revenue, similar to what was described as happening in Italy: ??> Customers are fined for leaving businesses without a receipt. Your car may ??> be stopped and searched for undocumented merchandise at any time. Imputed ??> income taxes for self-employed people are at ridiculous levels (i.e. a ??> large degree of evasion is assumed). Taxes are levied on everything (car ??> radios, the width of your driveway, electric lighters for gas stoves). So I'd think even more transactions would be illegal in the future. The main issue, I thought, was whether people would widely risk violating these laws in order to save on their taxes, and whether cryptography would let them do so with impunity. Duncan> You left out a few information purchases: education, much of medicine, Duncan> all of financial services, design, marketing, supervision, and Duncan> management. Duncan is pointing out that more of the economy is in the form of information than I was counting. Even if we count these things as information, though, the question is still to what extent the providers of these services will be able to escape taxation. Take medicine as an example. I should be able to go to a doctor today and pay him cash, off the books, at a greatly reduced rate, for my medical services. Yet no doctor I've ever seen, and I've probably seen twenty or thirty in my lifetime, has ever suggested that. I don't see how cryptography will change this. Duncan> Once the interface is good enough, virtual offices with full workgroup Duncan> interaction built of pure information will spring up and the Duncan> "information" component of much of what we think of as physical work Duncan> will become apparent. Is this the key, people working for virtual businesses? No one knows the true name of anybody else, so no one is afraid of being caught? I am still skeptical. A whole nation of people tele-commutes to work for companies whose name they don't know, with co-workers protected by aliases, all so they can be paid in cash for their services. I find this notion implausible in the extreme. Joe and Jane Sixpack aren't going to want to work for a boss who wears a mask. Duncan> If you wander down the shopping street of a future MUD/MOO and you Duncan> buy or sell things, what nation has jurisdiction for tax purposes. Duncan> What if the MUD/MOO exists as a set of cooperative processes spread Duncan> around the globe. This may be uncertain now, but I don't see why it would always remain that way. There is nothing to stop governments from declaring, say, that residents in their boundaries are subject to their taxation, or that their citizens are subject to their taxes regardless of where they do business. More interesting from the crypto perspective would be the case where the business in the MUD refuses to disclose its true nationality or location. There again, though, I think running an anonymous corporation will pose many practical problems. Sandy> You don't need to Sandy> *own* a car, to have the *use* of a car. Imagine leasing a car Sandy> and using your cyberspace bank digital checks, digital money or Sandy> credit card to pay the monthly rent. No audit trail, and no Sandy> asset to be seized. Similar techniques can be used for virtually Sandy> all of your assets. How does this bear on the issue of government collapse due to failure of income tax? This example actually strikes me as an unobjectionable use of cryptography, one in which individual privacy is protected. The only tax consequence I see is possible avoidance of sales tax, which is col- lected only at the state level and not the national level. Sandy's example shows that car rental agencies might be able to operate on a cash basis, like the local fried chicken outlet. I don't see how this brings down the government. Sandy> I think Hal hasn't been reading Duncan or my posts very closely. Sandy> Here's a hint: A Cayman Islands corporation is a non-US citizen Sandy> even if it is owned by an American. Sandy is replying to my question about moving out of the country to avoid taxes. I gather that he is suggesting that people could set up corporations in the Cayman Islands and somehow divert some of their income to them, so that the income would be shielded from taxes. Can this be done today? Can I go to my boss and ask him to start sending my salary to this numbered bank account in the Cayman Islands, and to stop troubling the U.S. government with information about how much he is paying me? Sounds great. Why doesn't everybody do it, and why will everybody start doing it in the future? To sum up, I am willing to accept that people will be eager to avoid paying taxes, but I still doubt that cryptography will bring down the United States government. Particularly when we consider the lack of sophistication (both financial and technical) of the vast middle class who provide the bulk of tax receipts, I think that virtual corporations and offshore tax havens are not likely to become widespread enough to seriously endanger the government. (In response to John Kreznar's comments about my use of the term "cheating" to refer to violation of tax laws, I accept the thrust of his comments but I'll just observe that while preparing a false set of books may be justified and in some circumstances even honorable, it is not honest.) Hal -----BEGIN PGP SIGNATURE----- Version: 2.3a iQCVAgUBLTnMY6gTA69YIUw3AQHqlgP/d6GTpNrK3c4B/jfxT5tQqAJ0uBkvc5Y7 fh1dtj16QrR/CmAHEJVV+JWXUjwaTnjqO1RdgPJfjjG1U7CaSiuy84OVlyQPSpAc JeIC7qa1HfqXRCK/bQmxcJMhbOULMKkk2plphcwDvL2Tlxe8DXvmgDLS21DUV6r+ bOT9RBf2U3c= =p55w -----END PGP SIGNATURE-----

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Applied Cryptography Disk via FTP?
by jkyser＠netcom.com 17 Dec '03

17 Dec '03

I just purchased a copy of Schneier's Applied Cryptography, and am interested in obtaining the source code disk set that accompanies the book. Does anyone know if these disks are available via FTP? Any pointers would be appreciated. Thanks, Jeff -- Jeff Kyser PGP 2.3 public key available via finger jkyser(a)netcom.com

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Re: a modest proposal
by Nikolaos Daniel Willmore 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- Greg Broiles <greg(a)goldenbear.com> offered, "I suggest that remailer operators might find it useful to redirect remailing requests originating from Detweiler directly to postmaster(a)lance.colostate.edu." Here are results of a somewhat unfair but curiosity driven experiment. I have got to admit I agree with the postmaster, but I figured it was worth a try. They are reproduced without permission. - From steved(a)longs.lance.colostate.edu Sat Jan 15 00:31:44 1994 To: Nikolaos Daniel Willmore <ndw1(a)columbia.edu> Subject: Re: Detweiler fan mail. Reply-To: postmaster(a)longs.lance.colostate.edu Date: Fri, 14 Jan 94 22:31:40 -0700 Sender: steved(a)longs.lance.colostate.edu >Hi, coming from your site are the worst abuses in rants and rave I have ever >seen on Usenet. Like it or not, this is a free country where the right to free speech is highly valued and protected. I will neither endorse nor censor anything posted to a public forum by any user from this site. Unless some law is being broken or some other user's individual rights are being violated, I don't want to hear about it. >I will help you keep informed by mailing to you each and >every one of these to you until you tell me to stop. You may stop now. >Lance Detweiler is >talking to himself over and over again all day long. I believe the best way to deal with net.pests is to ignore them. When they realize they are talking only to themselves, they will go away. BTW, his name is not Lance. ==================================== Engineering Network Services Steve Dempsey Colorado State University postmaster(a)longs.lance.colostate.edu Fort Collins, CO 80523 ==================================== +1 303 491 0630 - -Nik -----BEGIN PGP SIGNATURE----- Version: 2.3 iQCVAgUBLTnVomQa8GyiAZrpAQHQWQQAqljWmUyMkgShJWvnBHAo4Y/dbvTIBzds O/PG70FxEMTTYMvz+m0zDXh5ipJzCiFQPEkGaw8+nLkBWgRDYaJ02FNojm9el5X0 /JtjjEvgutKpukV7w/aP8+QDQHLNCKoE8KEV9OrMvglAWwHm+muJYoF1nhUi1RTx Wi0oB155A80= =avk4 -----END PGP SIGNATURE-----

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Re: MEDUSA *LIVES* IN CYBERSPACE!! (fwd)
by Peter shipley 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- I just got this emailed to me at the technical and administrative contact for the dis.org (where a remailer is mainiained). Since cypherpunks is given credit for the contence I figgured I would forward the complaint... -Pete Shipley - ------- Forwarded Message Return-Path: lwright(a)cac.washington.edu Return-Path: <lwright(a)cac.washington.edu> Received: from remarque.berkeley.edu by merde.dis.org (4.1/SMI-4.2) id AA19742; Sun, 16 Jan 94 13:49:07 PST Received: from ucbvax.Berkeley.EDU by remarque.berkeley.edu (8.6.4/1.31) id NAA02945; Sun, 16 Jan 1994 13:49:02 -0800 Received: from shiva2.cac.washington.edu by ucbvax.Berkeley.EDU (5.63/1.43) id AA27381; Sun, 16 Jan 94 13:47:01 -0800 Received: by shiva2.cac.washington.edu (5.65/UW-NDC Revision: 2.29 ) id AA22478; Sun, 16 Jan 94 13:48:54 -0800 Date: Sun, 16 Jan 1994 13:48:54 -0800 (PST) From: Linda Wright <lwright(a)cac.washington.edu> Subject: MEDUSA *LIVES* IN CYBERSPACE!! (fwd) To: shipley(a)ucbvax.Berkeley.EDU Message-Id: <Pine.3.89.9401161301.C22450-0100000(a)shiva2.cac.washington.edu> Mime-Version: 1.0 Content-Type: TEXT/PLAIN; charset=US-ASCII You are listed at the technical and administrative contact for the dis.org domain. I would appreciate it if you would let "remailer" know that this announcement was completely unappreciated by the 730 members of the CLASSICS list and that we do not want this to happen again. Thank you. - - -Linda Wright University of Washington CLASSICS Listowner - - ---------- Forwarded message ---------- Date: Sat, 15 Jan 1994 21:14:40 PST From: remailer bogus account <remailer(a)DIS.ORG> To: Multiple recipients of list CLASSICS <CLASSICS%UWAVM.BITNET(a)uwavm.u.washington.edu> Subject: MEDUSA *LIVES* IN CYBERSPACE!! INTRODUCING === ##### #### ## ## #### ##### ## ## ### ## ## ## ## ## ### ## ## #### ## ## ## ## ## #### ###### ### ## ## ## ## ## ### ## ## ##### ###\\ #### #### ##### ## ## ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Introducing the SECRETLY QUIZZICAL UNIFIED INTERNET SNAKE HUNT! * THOUSANDS OF CONTESTANTS * HUGE CASH PRIZES * * FASCINATING DISCOVERIES * HEDONISTIC DELIGHTS * * FANTASTIC FUN FOR EVERYONE * ENDLESS ENTERTAINMENT * CONTENTS ======== - - - INTRODUCTION - - - UPDATES - - - DEADLINE - - - THE CASH PRIZE - - - MORE ABOUT `SQUISH' & `FACE' - - - QUESTIONS === The recent WHITE HOT interest by multiple groups and individuals in the CYBERANARCHIST TENTACLE INFILTRATIONS into the Internet have inspired an EXCITING NEW CONTEST and COMPETITION! we, the Federation of Associations of Cyberspace Everywhere (FACE), announce the SUPREMELY QUACKY UNIFIED INTERNET SNAKE HUNT! (SQUISH) * THOUSANDS OF CONTESTANTS * HUGE CASH PRIZES * * FASCINATING DISCOVERIES * HEDONISTIC DELIGHTS * * FANTASTIC FUN FOR EVERYONE * FAMOUS PARTICIPANTS * UPDATES === updates on the SQUISH contest will be posted regularly. Send in notice of the more spectacular point accumulations with proof for verifications immediately and the Halls of Fame and Shame. Unverified points are not valid toward the cash prize. DEADLINE === TIME IS RUNNING OUT! AVOID INQUIRING FURTHER OR WAITING FOR FURTHER INSTRUCTIONS. START IMMEDIATELY! MONTHS OF PARTICIPATION ARE REQUIRED TO ACCUMULATE COMPETITIVE STANDING. SOME PARTICIPANTS ALREADY HAVE A HEAD START. THE CASH PRIZE WILL BE AWARDED APRIL 1, 1994. FURTHER INCREMENTS WILL BE AWARDED AT YEARLY INTERVALS THEREAFTER. MORE ABOUT `SQUISH' AND `FACE' === The Federation of Associations of Cyberspace, Everywhere was founded in 1994 as a group that coordinates the activities among the many different online organizations. We have played a very low-profile role to date, and wanted to find some way of promoting our newfound alliance. We have groups combined from BBSes, local area networks, the Internet, and other global and local networks around the world (see below). We have built up some membership funds from the contributing organizations and private contributions to provide the prize money for SQUISH, and some private individuals have donated significant amounts. The contest was inspired by S.Boxx, who was the architect of point classifications and the current opponent lists. S.Boxx has also promised to provide any funds necessary for the successful completion of the contest. We hope that recent interest into snakes and tentacles by many on the Internet will make the contest spirited entertainment and a strong success. We encourage reporters and the media to use this announcement as our official press release. Feel free to redistribute or comment on this announcement in any forum. QUESTIONS === Address further questions to cypherpunks(a)toad.com, gnu(a)toad.com, tcmay(a)netcom.com, or hughes(a)ah.com. Some additional information is available in RISKS 15.25, 15.27, 15.28x: ftp CRVAX.SRI.COM, login anonymous, directory RISKS: (include the colon), file RISKS-i.j === ///// //// // // //// ///// // // /// // // // // // /// // // //// // // // // // //// ////// /// // // // // // /// // // ///// ///\\ //// //// ///// // // ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Introducing the STELLARLY QUOTABLE INTERNET SNAKE HUNT! === Brought to you as a coordinated effort between the individuals * S.BOXX * MEDUSA * INFOCALYPSE * THE EXECUTIONER * PABLO ESCOBAR * DEADBEAT and the Federation of Associations of Cyberspace Everywhere (FACE) * ILF (INFORMATION LIBERATION FRONT) * BLACKNET (INTERNET ESPIONAGE COORDINATION HEADQUARTERS) * BLOODNET (CYBERSPATIAL BLACK MARKETEERING AND LIQUIDATION SQUAD) * CRAM (CYBERSPATIAL REALITY ADVANCEMENT MOVEMENT) * CRaP (CYBERANARCHIST REPRESSION AND POISON) * CY{B,PH}ER{PU,WO}NKS === * THOUSANDS OF CONTESTANTS * HUGE CASH PRIZES * * FASCINATING DISCOVERIES * HEDONISTIC DELIGHTS * * FANTASTIC FUN FOR EVERYONE * CRIMINAL CONVICTIONS * * GRISLY DEATH TORTURE * JUDGEMENT DAY * APOCALYPSE NOW * - ------- End of Forwarded Message -----BEGIN PGP SIGNATURE----- Version: 2.3a iQBVAgUBLTof3XynuL1gkffFAQE21wH+JYX/bsJvaIpTApsOjNqaeQFBAdkeCpOZ kXYx4yabmOPSDaUoUBTXV3t45GYGFfadILaT/IX8SMjOcJbqW+RXwA== =AhwP -----END PGP SIGNATURE-----

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Crypto and Taxes
by Duncan Frissell 17 Dec '03

17 Dec '03

H>I agree with the last point about legality helping, but I don't H>understand why most transactions will become legal in the future. I H>thought we were talking about ways to evade laws via cryptography. Legality is a matter of time and place. The nets let us pick our time and place. A non-economic example: It is a crime for someone in Germany to produce, possess, or transfer "Nazi Material." It is legal for someone in the US to produce, possess, or transfer "Nazi Material" (substitute other jurisdictions and other "material" to taste). If I am in Germany and I download "Nazi Material" from the US, no crime has occurred in the US. A crime may have occurred in Germany but discovery and proof will be very difficult. Encryption will help here. Info contraband (which also include things like "unregistered securities" or "American Movies in France") can be produced and accumulated where legal and acquired anywhere else. Production and distribution remain legal. In some cases the possession may be illegal but in others (unregistered securities) it won't. H>My assumption is that governments would actually crack down when faced H>with lost revenue, similar to what was described as happening in Italy: If 90% of GWP is on the nets, cracking down will be difficult because there is nothing to seize. What is happening of economic value on a private, encrypted net? Who knows or can know? Enterprise networks (properly designed) will only respond to their owners. No one else can have a say. Governments will be reduced to taxing the remaining physical parts of the economy. Meanwhile, people will be learning what it's like to live in a free society for part of the time (on the nets). They will not put up with restrictions in their physical life. They will have assets and attitudes that they can apply to freeing the rest of their lives. When people turn away from obedience, governments disappear (see the DDR) or at least weaken. God fights on the side with the heaviest artillery. Unless you can suggest some sort of artillery that governments could use over fiber optic cable, they will be disarmed in that environment. In the early 80's when Continental Illinois Bank was going bankrupt, these fun telexes used to arrive every day from Tokyo. "CANCEL OUR OVERNIGHT DEPOSIT OF $10,000,000.00 EFFECTIVE TODAY". Suppose that the Feds had sought to seize this money (as governments have in the past). How do you seize an overnight deposit? It is gone when cancelled. Simple bookkeeping entry in Tokyo. Similar problems everywhere in cyberspace. H>Is this the key, people working for virtual businesses? No one knows H>the true name of anybody else, so no one is afraid of being caught? I H>am still skeptical. A whole nation of people tele-commutes to work for H>companies whose name they don't know, with co-workers protected by H>aliases, all so they can be paid in cash for their services. I find H>this notion implausible in the extreme. Joe and Jane Sixpack aren't H>going to want to work for a boss who wears a mask. They can know each other. They can be paid in digital drafts (checks) drawn on the First Internet Bank. Cash not needed. Their *nationality* need not be known and will be irrelevent. Taxation is geographically based. H>Duncan> What if the MUD/MOO exists as a set of cooperative processes H>Duncan> spread around the globe. H>This may be uncertain now, but I don't see why it would always remain H>that way. There is nothing to stop governments from declaring, say, H>that residents in their boundaries are subject to their taxation, or H>that their citizens are subject to their taxes regardless of where they H>do business. Try to enforce this requirement. In any case, foreigners will not be covered which will give them a real competitive advantage if residents of the high tax nations don't "cheat." In practice even in our current physical world, small businesses only report 48% of their revenue, the self employed have the lowest rates of individual tax compliance, and 61% of expat Americans do not file US tax returns. When almost everyone is self-employed or a small business and when regulators can be excluded from transactions by the simple application of crypto technology, compliance will suffer. H>More interesting from the crypto perspective would be the case where H>the business in the MUD refuses to disclose its true nationality or H>location. There again, though, I think running an anonymous corporation H>will pose many practical problems. It can admit that its location is Grand Cayman. After a short period of social development time, it will be able to admit that its location is on a street in a MUD commercial center. Virtual communities can be as real as a skyscraper (an artificial environment.) H>To sum up, I am willing to accept that people will be eager to avoid H>paying taxes, but I still doubt that cryptography will bring down the H>United States government. Particularly when we consider the lack of H>sophistication (both financial and technical) of the vast middle class H>who provide the bulk of tax receipts, I think that virtual H>corporations and offshore tax havens are not likely to become widespread H>enough to seriously endanger the government. Once we get a better interface... People will be drawn to the nets for the games and the thrills (no censorship). They will start by buying legal and forbidden items there. Some entrepreneurs will locate there. Any government restrictions on info will be market opportunities. Porno almost everywhere, the Asian WSJ in Singapore, non-government TV in India, US movies in France, etc. The last vestiges of control over money and investments will die. These sorts of restrictions create market opportunities that traders can arbitrage. The nets almost eliminate transaction costs. Government regs on banks, stock markets, telecoms companies, etc. will end. Once restrictions on types of info or types of money are smashed, the now flush markets on the nets will start to arbitrage the tax structures of nations. If a transaction costs more because it occurs in a particular jurisdiction and is taxed, people will be able to make money by transferring the transaction (or part of it) to a non-taxed area (the nets). Why hasn't this been done as much before? Transaction/transportation costs. Duncan Frissell "Good will and artillery will get you more than good will alone, anytime." -- Artillery officer's saying --- WinQwk 2.0b#1165

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Re: MEDUSA *LIVES* IN CYBERSPACE!! (fwd)
by jdwilson＠gold.chem.hawaii.edu 17 Dec '03

17 Dec '03

Should you tell her? I don't know. This whole subject is a lose/lose issue. If you react to it you may be feeding the need for attention, and if you don't you might be tacitly allowing it to continue. It's a shame that the list is equated with the message. -Jim

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Re: MEDUSA *LIVES* IN CYBERSPACE!! (fwd)
by Matt Thomlinson 17 Dec '03

17 Dec '03

since she's in my domain (.washington.edu) I sent her a note explaining the detweiler affair and asking her to please respond to the postmaster, etc. I'll try and take care of this. matt Matt Thomlinson Say no to the Wiretap Chip! University of Washington, Seattle, Washington. Internet: phantom(a)u.washington.edu phone: (206) 548-9804 PGP 2.2 key available via email or finger phantom(a)hardy.u.washington.edu

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