December 2003 - cypherpunks-legacy

Re: Digital Cash
by wcs＠anchor.ho.att.com 17 Dec '03

17 Dec '03

Black Unicorn <unicorn(a)access.digex.net> writes: > So has anyone tried to solve the problem of double spending and > the online requirement of digital cash? > Is there any way to take cash offline? Or is this merely the copy > protection problem rehashed? Double spending is one of the main problems digicash systems try to solve, since digicash can obviously be copied easily. Online systems make the double-spending relatively easy to prevent, but, besides inconveniences, the online transaction has a transaction cost that may make the system unusable (e.g. a 5 cent telephone message unit costs too much for a newspaper, though it may be fine for paying for contraband tobacco at $5/pack.) There are two main approaches to off-line systems that I've seen: - making the hardware expensive or contractually limited (e.g. subway farecards, phone cards, postage meters) (It's intellectually unexciting, but works fine economically for small transactions.) - using tamperproof trusted hardware that embeds enough information about its identity in each digicoin that double-spending reveals the identity, or multiple spending reveals the identity with increasing probability. Much of this work has been done by Chaum's folks in the Netherlands, using "observer" smartcards; somebody posted a paper about it on sci.crypt recently. It's harder to use these approaches for applications like emailing credit card numbers, but they're ok for tollbooths. I worry somewhat about the privacy issues - in order for revealing a cheating userid to be effective, either the bank needs to have a registry of who the user is, which is a privacy problem for people who really want anonymous money, or else there needs to be some system for distributing bad userids, analagous to the inconvenient books of bad credit-card numbers that small shops used to use before phone verification became widespread. (Obviously they'd be digital, but I'd rather not have to carry a CDROM drive or gigabyte hard disk in my wallet...

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Re: Virtual Cash
by wcs＠anchor.ho.att.com 17 Dec '03

17 Dec '03

> >[...] but noone (as far as I've seen) > >has come up with an "economic model" within which they could use them. > > Denominate digital money in dollars in a demand deposit account in a > US bank. > Why reinvent the wheel, or, in this case, the unit of value? The two common models are either to denominate private currency in some convertable currency, like dollars or rubles (useful for providers of financial services trying to add digicash to their services), or for a service provider to denominate digicash in some unit of their service, e.g. subway trips, road tolls, phone calls, email shuffles. The latter approach is easier to bootstrap (the service provider can just do it, there's no problem with learning banking laws, etc.), but it's less convertible unless lots of people want the service, so it tends to be localized use.

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

17 Dec '03

>On Tue, 3 May 1994 Duncan Frissell <frissell(a)panix.com> > >>On Tue, 3 May 1994 smb(a)research.att.com wrote: >> >> This underscores what I've said in the past about anonymous digital >> cash: it's not going to go anywhere unless folks are willing to pay >> a premium for privacy. There are too many sound reasons for keeping >> audit trails (debugging, fraud detection, marketing analysis, etc. -- > >Something overlooked in the real world that encourages the maintenance of >private payment systems (cash) is th existence of a large number of people >with bad credit. > [etcetera, etcetera] >Thus, we see the recently introduced computer phonecards which you can use >to buy long distance phone service in advance for cash. No hassles with >telephone account which tend to require a fixed address in any case. > >Note also the popularity of secured credit cards which are now issued by a >score of financial institutions. > >There will continue to be a big market for "cash" to serve this market. > >DCF > Ahhh. My lurking pays off! So good to see talk in earnest about "Cyphercash" (I noticed from my reading of the imp-interest archive that Digicash(tm) is taken already ...) I have been looking for a sound business reason for digital cash. I think you folks may have found it. Something to beat over the head of my B-school trained pals anyway... I think the primary reason that utilities put up with the float on checks is because they have no choice. Credit card fees are too onerous, and there were too many ways to cheat the old coin-operated electricity meter down the hall. There was a discussion in Forbes a while back (if anybody wants me to go find it, let me know) about how electric utilities somewhere were running pilot systems of prepaid electricity cards, which would get rid of meter readers and their attendant overhead, and replace it with commissioned "agents" (the local corner liquor store) ;-) in some of the higher-risk neighborhoods. I think there might be other reasons for using digital cash, but I'll take cash in advance for a pornography feed for a start. Anybody else out there with less draconian advantages to digital cash? -Ad<thanx>vance, Bob Hettinga ----------------- 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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list active?
by Brian D Williams 17 Dec '03

17 Dec '03

I haven't received any mail from Cypherpunks today, did I get accidently removed? I did receive Norman Hardys reply however..... Brian D Williams help!

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digital cash
by daily%cbpi.UUCP＠DMC.COM 17 Dec '03

17 Dec '03

This is my first post here, please be gentle! I'm no crypto specialist, so the public key part I refer to may be totally out of line, I hope not. I've been reading this list for a month or so and I'm drawing my conclusions about the key from that. Let's break anonymous digital cash down into two problems. 1. Anonymous place to store funds. 2. Ability to get funds out of anonymous account to either any other account or any individual/company. 1. You will need a place that not only you trust, but that the people you are dealing with will trust. This place must be accessible physically as well as electronically. Physically so I can walk in and deposit money anonymously (so there is no electronic trail), and also so that I can give money to people who have no computer. I want to be able to give something to someone and they will be able to take that to this place and get money for it. I won't get into why it has to be accessible electronically. I'll call this place a bank. The only way to get money out of the account would be with a PGP like signature. I set the private key when I open the account. The public keys would be designed to incorporate the amount of the e-check I'm writing. When you go to the bank to cash in your key, the key is recorded so it can't be used again, and the bank gives the money to the key holder. The keys would have to have something built into them to make them unique so that you could write a key for the same amount more than once. 2. So now I've got this anonymous source of funds, I want to buy something. If I'm buying it over the net, I could send an order for something via an anonymous account to the provider using PGP. It's important to protect the money key, because whoever has the key, can get the money. Now the service provider sends me my stuff via a reply to the anonymous e-mail. I get my stuff, they get their money and there is no way to determine who is who. The service provider can be known or unknown, doesn't matter. All that matters is that they get my order and my money key. Obviously, this only works if you are dealing in person or electronically. I can't send you a request for a box of rocks and not tell you where to send them. But I could use my pocket electronic check book to write a key for the amount of a purchase at a store. The cash register could read that key and confirm it's validity and amount and actually complete the transfer of funds immediately. I think banks would go for this because they get the float on our money, they don't have to pay interest, and they don't have to send monthly statements. They are already in the business of moving money, so I don't believe there would be any additional expenses to set this up other than the key readers. Safe, as convenient as a check, and anonymous. Have I missed anything? -- Jim Callen Voice: (617) 275-3427 Collaborative Biomedical Products FAX: (617) 275-3436 Becton Dickinson Internet: jim(a)cbpi.com Two Oak Park Bedford, MA 01730

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Why Digital Cash is Not Being Used
by tcmay＠netcom.com 17 Dec '03

17 Dec '03

Hal Finney asks us to think about and comment on the important issue of why digital cash, in its myriad forms, is not in wider use. Especially on this list, where the Magic Money/Tacky Tokens experiment has not (yet at least) produced widespread use. This question also goes to the heart of several related questions: 1. Why aren't crypto protocols other than simple encryption, digital signatures (both implemented in PGP as the de facto standard in our community), and remailings (implemented in Julf's anon.penet.fi remailer and in the various Cypherpunks remailers) being *used*? Why no DC-Nets, no data havens, no digital timestamping, etc.? 2. What *incentives* are there for creative programmers to devise and/or implement new crypto protocols if essentially everything for the past year and a half (since the fall of 1992, which is when PGP 2.0 and remailers became widely available) has languished? 3. What are the "killer apps" of crypto? 4. What platforms and user environments should would-be developers target? What machines? What networks? What languages? (An ongoing interest of mine. Objects, scripts, Visual Basic (!) VBX tools, TCL, perl, many platforms, etc. A tower of Babel of confusion is upon us.) Here is my first-cut analysis of the digital cash situation. I. Why is Magic Money/Tack Tokens, in particular, not being more widely used? - Nothing of significance on the List to buy, hence no incentive to learn how MM works. (Just because someone announces that their new article is available for 10 Tacky Tokens doesn't a demand make!) - Semantic gap. I confess to not having the foggiest ideas of how to go about acquiring Tacky Tokens, how to send them to other people, how to redeem them (and for what), etc. Having nothing to buy (no need), and plenty of things to occupy my time, I've had no interest in looking at MM. When I buy items like t-shirts from people on this list, I simply write them a check and send it. Very simple. The banks handle the complexities. And writing a check is a "prototype" (or script) that is learned early by most of us. Not so with any of the various digital cash schemes. In 10 or 20 years, sure, but not now. This is not to take away from the excellent work--I gather from comments by others--that ProductCypher put into MM. His greatest achievement may turn out to bring this issue to the fore, to wit, what will cause people to bridge this semantic gap (understanding) and actually begin to *use* these new constructs? - as others have noted recently (and this is a well-known issue), alternative currencies must offer some advantage over existing currencies, or at least be roughly on a par with them. For example, the airlines have their own currency, "frequent flier miles," which they pass out as an inducement for customer loyalty (repeat business)....it is generally not advantageous for them to allow exchange. (And really it's a kind of bribe, a transfer from the corporations which pay for the plane tickets, with the frequent flier miles accruing--despite futile attempts to halt this--to the individual passengers....this gives "ffm"s a built-in advantage.) (The proposal recently that vendors of products, like t-shirts, give a discount for MM payments is of course unworkable. This is asking real people to give up real dollars for an ideological cause of marginally little significance to them. The advantages of MM must be real, not phony.) II. Other Experiences with Digital Cash in Some Form - On the Extropians list a while back (I've since left that list), there was an interesting experiment involving reputations of posters and "shares" in their reputations. Brian Hawthorne introduced is "Hawthorne Exchange," HeX, with eventually a few hundred or so reputations trading. The unit of exchange was the "Thorne," with each new list member given 10,000 Thornes to trade with. Trading was very sparse, with most people apparently never bothering to learn to trade (a la my own experiences with Magic Money). I downloaded the docs one night, tried a few trial trades, and then proceeded to make dozens of trades, trying to buy cheap and sell dear. Between my trades, the reputation attached to my posts (and to my "nom du humor," Klaus! von Future Prime) I amassed a sizable fortune in Thornes. I even offered to exchange real dollars (checks) for Thornes, the better to amass a fortune (for reasons I won't go into here). Edgar Swank offered to sell me his Thornes for $20, I think it was, and I sent him a check immediately. (No one else did.) But I think the system was ultimately a failure. Nothing interesting was for sale, and Thornes had a ridiculously low value (reflecting of course their "toy" nature...my $20 bought 20,000 Thornes, as I recall). By "low value" I mean that the number of Thornes given to each participant (Hint: "given" is the important word) was worth nominally $100 (by Brian's sales price--probably none were ever sold at this price), worth $10 to me and others (by my offer of $1 per 1000 Thornes), and probably worth much _less_ as the HeX market languished and, probably, ultimately folded. (Does anybody on the Extropians list know if it is still operating? And what happened to by shares when I left the list?) - Similar barter schemes have been described elsewhere. "Mother Jones" had an interesting article last summer about a barter scheme in New England, and other folks have mentioned here the articles in "Utne Reader" and so forth. III. What Markets Might Make Use of Digital Cash - phone cards, subway cards, parking garage cards...all are examples. But these are mainly to reduce the need for customers to carry coins and bills, to reduce the dangers of theft of coins and bills (and the need to collect them frequently from payment points), and to speed up processing by not having customers fumble for change, etc. - toll roads...this is a market that Chaum's DigiCash company has been targeting for several years now. Privacy is a concern (don't want Big Brother tracking your movements), and the infrastructure may allow considerable investments in remote sensing of IDs and pseudonymous IDs, online clearing, etc. Read the Chaum stuff for details on this. - illegal markets, for transferring wealth in fairly large amounts. Not at all clear how this will happen, and it sure won't happen with some fly-by-night hackers and/or students offering a new service. (I didn't mention that one of the persistent concerns about learning new crypto protocols here on this list is the epiphenomenality (transience) of it all...remailers appear and then vanish when the students go away or lose their accounts, features added make past learning useless, and so on. Life is too short to spend it learning crufty details that will go away in a matter of months. I'd hate to buy $300 worth of TackyTokens and then find that their value went away when J.Random User graduated!) - betting markets, the "Internet Casino in Cyberspace," etc. Nick Szabo was once championing this, and I think it could be an interesting, and very real, market. Lots of issues here. - Digital Postage. This remains my favorite. There's a _need_ for untraceable payments (else why use a remailer?). I've written about this extensively, as have others. If remailers offered robust (see above point about crufty, flaky, hobby remailers) services that they operated as _businesses_, with reasonable attention to reliability, interconnectivity to other remailers, overall robustness, and carefully articulated policies about logging, privacy, etc., then MM or something similar could have a real value. IV. Is there Any Hope for Cypherpunks Software Use? The remailers (of Hughes and Finney, with other contributions) came in the first few _weeks_ of existence of the Cypherpunks group. Julf's system already existed. Remailers were the "low-hanging fruit" that got plucked fairly easily (not taking anything away from Eric, but he himself says he learned enough Perl in one day to write the first, crude remailer the _next_ day!). Later protocols have not fared as well. Why this is so is of great importance. That's a topic unto itself, and one which I hope to write about soon. Lots of important questions and interesting issues. --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: list active?
by Brian D Williams 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- Thanks to Paul Ferguson, smb(a)research.att.com,Harry Bartholomew, and Norman Hardy for replying. >From bart(a)netcom.com Tue May 3 09:13:27 1994 >From: bart(a)netcom.com (Harry Bartholomew) >Subject: Re: list active? >To: talon57(a)well.sf.ca.us (Brian D Williams) >Date: Tue, 3 May 1994 09:14:25 -0700 (PDT) >MIME-Version: 1.0 >Content-Type: text/plain; charset=US-ASCII >Content-Transfer-Encoding: 7bit >Content-Length: 132 > Yes same as normal. And majordomo says you're still on the list, >so NSA is gobbling your messages specifically, en route! Hmmmm, I guess someone is doing something, cause I'm still not getting any traffic today, any other WELL-beings having a problem? ...---... ...---... ...---... ...---... ...---... ...---... Brian Williams Extropian Cypherpatriot "Cryptocosmology: Sufficently advanced comunication is indistinguishable from noise." --Steve Witham "Have you ever had your phones tapped by the government? YOU WILL and the company that'll bring it to you.... AT&T" --James Speth -----BEGIN PGP SIGNATURE----- Version: 2.3a iQCVAgUBLcacytCcBnAsu2t1AQGDUQQAjZ9r8V2Af1Aw7HZmJCGUlRHz1RmSC7dO qM3g7PZNh+DkkOolR90E6A66DA3usDjDIIUFZI1wIbP47xD37HDzJKEJCNRgLhTj dCNBdpIWgdyZKQDKSjMqQaJB4kYO50TLWAUo4g73J2gVycBlDnPPjeydGt6HrQZt 7sEKOBmAYuI= =KTZj -----END PGP SIGNATURE-----

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Re: Digital Cash
by jamiel＠sybase.com 17 Dec '03

17 Dec '03

At 11:05 AM 05/03/94 -0700, Eric Hughes wrote: >>About 20% of the US population has neither credit cards nor checking >>accounts. Some of this is because of personal preference but a lot of it >>is because these people can't handle something as abstract as a checking >>account without wrecking it. > >A significant part of this is that banks have simply moved out of a >lot of neighboorhoods, and checking accounts are simply not easily >available. Many people grow up without interaction with the banking >system, and therefore don't get electronified. And another big reson is that on a low income it doesn't make any sense to use a bank, let alone credit cards. Been there myself- If I have to worry whether there is anough money in the account to not go negative when the monthly fee comes around, why not pay bills by postal money order and save what little cash one can, instead of handing it to the banks? Opps. Not crypto. Sorry. -j >Eric

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

17 Dec '03

>>Anybody else out there with less draconian advantages to digital cash? > >Immediate and final clearing. > >Eric I think I see that... If your accounting systems were tightly coupled enough, (and you were completely cash based) you could get your pro formas on 12:01 am the day after the quarter ended. Of course you wouldn't have a chance to back-pedal the results so well, either. . Your comment about clearing reminds me of something else, though. I know that options are settled much faster (Next-day, if I remember. It's been too long since I was in a cage.) than equity and fixed-income (5 days) securities. Is it possible to see instantaneous settlement happen in the financial markets with digital cash? I keep remembering that Edison made his first real pile by inventing the stock ticker, though I'm not sure how crypto-anarchist libertarians (syntax-error?) would make theirs here. ;-) OTOH, would "immediate and final clearing" in a peer-to-peer clearing mechanism be a useful enough benefit that a market's participants would pay to use it? -Bob Hettinga ----------------- 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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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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