December 2003 - cypherpunks-legacy

Re: What backs up digital money?
by FRank O. Trotter, III 17 Dec '03

17 Dec '03

> Date: Tue, 2 Apr 1996 08:11:21 -0800 > From: Hal <hfinney(a)shell.portal.com> > To: cypherpunks(a)toad.com > Subject: Re: What backs up digital money? > From: "Frank O. Trotter, III" <fotiii(a)crl.com> > > Ecash is a means of transferring value, currently USD at Mark Twain, > > betweeen parties. Ecash, however denominated, is not a currency in > > itself. > > I am curious to know why you say that ecash is not a currency. One of > the main points of my original posting was to challenge this view. > > Do you simply mean that this is a matter of definitions, that ecash isn't > a currency because it lacks some property X that, by definition, a > currency must have (such as, it must be issued by a national government)? ===== I think I tried to cover too many bases at once. Ecash _is_ currency, it is not _a_ currency. This means that outside of the formal definition acording to BSA which says that currency is the stuff we carry around and nothing else, that ecash generated coins function as a currency in that one can make purchases on a peer to peer basis, and appears to have the migration path necessary to exist in an offline world as well. To me this makes it currency. It is not a currency. One sees many articles and posts (not yours) that refer to ecash as though it were not USD or some other store of value. In this case I mean that ecash is the software that moves and stores money like a check, or more precisely like a money order, but is not in itself _a_ currency. > > Or are you saying that there is an important functional difference, that > ecash cannot be used as we normally use currency (that is, the dollar > bills and coins in our pockets) because of reason X? If so I would like > to hear what you think that reason is. The one I have seen mentioned > previously is transferrability, so I discussed this in my original > message. > > > The value unit or currency has value because people agree it has > > value. CyberBucks were (and still are) somewhat convertable to > > tangible goods - they are for sure convertable to intrinsic goods as > > demonstrated by the CyberBucks trial. USD and DEM have value only > > because we all accept them as payment - as fiat currencies there is no > > formal backing. Gold has value because ... > > The whole issue of why dollars have value is one which is poorly > understood, IMO. There are several reasons, which are inter-related. > One of the big ones is that they are legal tender. This term does not > mean what a lot of people think it does, but at least it means that > your dollars carry certain legal weight if you have a debt that you > need to pay off. Another reason dollars are accepted is because you > know you can pay your taxes with them. This is something that most > people have to do, and dollars are something they can do it with. > > Another factor is that there are long term contracts, such as > mortgages, which are denominated in dollars. You can use your dollars > to pay off your debt at the bank, and the bank is contractually bound > to accept them (even apart from legal tender considerations), and grant > you title to tangible property in return. Interestingly, the volume of > outstanding mortgages is of the same order of magnitude as the > circulating money supply. I know someone who claims that this is the > most important factor in giving dollars value. > > And finally, the reason that most people think of, the fact that > everyone around them accepts dollars, and presumably will do so in the > future. I don't actually think this is as strong as the others, since > there is no guarantee that people won't change their minds, and in fact > there have been historical situations where due to hyper inflation > merchants have come to view government money as almost worthless. So > since these people haven't committed to accept the money, this > grounding is not that strong. I think the earlier examples are more > important as an ultimate grounding, although they are not cited as > frequently. Exactly - I agree. Take a look at contracts like loans until Roosevelt closed the gold window in the early thirties. They said things like "you owe $100 or the equivalent of X.xx ounces of gold. With the revaluation of the US currency in terms of gold in the 30s there was a specific potion of the bill that disallowed these terms in contracts since the devaluation could not effectively take place otherwise (ref - Jim Grant). > > > Ecash puts banks back into the business of being banks - acting as a > > storehouse of value, and as a means to transfer this value, all for a > > fee. The early bank models were exclusively along these lines, with > > the various lending and investing functions added later. > > I would expect that an ecash issuing bank would make ecash loans just as > it makes other forms of loans. So I don't see ecash as making this > kind of difference in a bank. Just because a bank issues ecash it's > not going to roll back the clock to the 18th century. No quarrel here - but I think it is easier to build a competing lending institution where the business gives you money and you promise toi give it back, than it is to build confidence in a deposit institution where you give money and hope to get it back. I take my original commnet as a positive. > > One of the big advantages of multiple ecash currencies is that it turns > out that there is automatic control of inflation. A bank which issues > too much currency (relative to its reserves) will find it becoming worth > less because it is trusted less. There is an automatic balancing act. > Sure, this is like free banking in the 1800 - Fed KC traded at a discount to Fed NY or vice versa depending on attitude at the time. > We see the same thing in the international currency markets with > government currencies. In the olden days, when international trade was > less important, a government could inflate without feeling much pain. > But today its currency will lose value, which will hurt its balance of > trade and make it hard to acquire foreign goods. So this puts a brake on > the ability of governments to play games with the money supply. The same > factor would be expected to occur with private currencies. In the old days there was an automatic balance when a government inflated - the metal standard attached. If inflation got out of hand people would show up at the window with bills asking for the gold or silver equivalent - when the government gave out too much metal it had to behave. I would like to note that I am a big supported of private currencies. We have had many discussions on the topic and I have had the academic side covered by folks who wrote papers as far back as the 50s on how to do it. As ecash is accepted in the mainstream by multi-issuing interoperable banks I expect to spend more time on this topic - for now I need to get on with the conventional version. Great ideas! Frank > > Hal > > Frank O. Trotter, III - fotiii(a)crl.com www.marktwain.com - Fax: +1 314 569-4906 --------------------------------------------

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FC: CDA Court Challenge: Update #4
by Declan B. McCullagh 17 Dec '03

17 Dec '03

----------------------------------------------------------------------------- The CDA Challenge, Update #4 ----------------------------------------------------------------------------- By Declan McCullagh / declan(a)well.com / Redistribute freely ----------------------------------------------------------------------------- April 3, 1996 NEW YORK -- This afternoon the action shifted to a Manhattan courtroom, where a panel of Federal judges tried to decide what to do with a CDA challenge filed after ours. The lone plaintiff is Joe Shea, who declined to join the ACLU/ALA coalition lawsuit and is suing on behalf of the American Reporter. Shea has been pressing the NYC court to rule on his case before ours is decided. While we've taken pains to net.educate our judges with live -- albeit buggy -- demos and six days of hearings, Shea is relying on hardcopy to argue his case. This strategy is dangerous: if a relatively ill-educated NYC court upholds the CDA, that precedent can hurt our case. In court today, U.S. Second Circuit Court of Appeals Judge Cabranes proposed that Shea and the assistant U.S. Attorney defending the CDA adopt the record of the Philadelphia case to avoid duplication of evidence, testimony, and exhibits. Shea's attorney, Randall Boe, was reluctant to agree, even though he would be allowed to present additional evidence. (The DoJ's crack civil team declined to show today.) The court wasn't happy with Boe's response. It gave Shea and the government until April 17 to decide to include the entire record of the Philly lawsuit -- and said that if they don't, the court would appoint its *own* computer expert to demo the Net and blocking software on April 30. Another possibility is that the New York court could stay its decision until the Philly court issues its opinion. At the request of the Pennsylvania three-judge panel, Marjorie Heins from the ACLU was in NYC today to describe the latest in our case; she also suggested that the Judge Cabranes' court had the option to wait. This could happen -- my friend Eric Freedman of Hofstra Law School tells me it is by no means unusual for one Federal court to defer to parallel proceedings in another. No matter what the panels of judges decide, the two cases will be consolidated on appeal to the Supreme Court. (If we lose, we have 60 to 90 days to file our appeal. If the DoJ loses, they have 20 to 30 days to file theirs.) Bruce Taylor has a unique perspective on the hearings. He's the guy who helped *write* the be-damned CDA and he's been its most vocal supporter over the last year as president of the National Law Center for Children and Families. I met Taylor last week at the Computers, Freedom, and Privacy conference and we sucked down a few beers in the hotel bar before he went cue-to-cue with Brock Meeks. Taylor told me today that the assistant US atty for the Southern District of New York was "just parroting what's happening in Philadelphia" and had come down from NYC on Monday to observe the proceedings. A former porn-prosecutor, Taylor wears his successful convictions as a badge of honor: "Comstock was an amateur!" He says his side is doing well: "I've worked with the civil division before... They're very good litigators who do their homework." (Of course, Taylor conveniently has deluded himself into believing the CDA is constitutional.) Today we also officially learned the identities of the DoJ's two expert witnesses. Since the DoJ is calling only two witnesses and we're calling just one more, we should finish before April 26. (The DoJ's fax to our legal team today says: "At this point, defendants do not plan to call additional witnesses.") If this works out, we'll complete testimony on April 12 and reserve April 15 for rebuttal. As I reported in a previous dispatch, the first pro-CDA witness is Dan R. Olsen, Jr., the incoming director of the Human Computer Interaction Institute at Carnegie Mellon University. Currently the head of the computer science department at Brigham Young University, Olsen will testify about the "technical issues related to the 'safe harbor' defenses" under the CDA. Olsen will be deposed, probably in Washington, DC, on April 8. Olsen was unwilling to tell me much in email earlier today: "I understand your interest, having read your home page. I would be happy to go over all of this with you when I actually move to CMU in July and the case has completed. Until the case is resolved, it would be inappropriate to discuss it. Thanks for your interest." Note that BYU's rather Orwellian computer usage policies say: "DON'T: Use BYU resources to view or transmit pornography... All the activities and circumstances covered by this policy must comply with the University's standards of Christian living... The University community may direct questions or requests for exceptions to this policy, as well as report any instances of noncompliance or deviations to the Advancement Vice President." How appropriate that a faculty member at such a school would take a job as an administrator at equally-censorhappy Carnegie Mellon University -- which is considering a truly heinous speech code and still censors its USENET feed! I predict lots of cybersmut when the second government witness testifies. He's Special Agent Howard A. Schmidt from the Air Force Office of Special Investigations, and will "present a demonstration and testify concerning access to information, including sexually explicit material, that is available online, including through the Internet." Schmidt will be deposed on April 9. Brock Meeks reports that Schmidt apparently is a member of the High Technology Crime Investigation Association and has participated in a "Law Enforcement Panel on Computer Forensics" for the 18th National Information Systems Security Conference in Baltimore last October. He also likes boats and fishing; hiking and camping. It's a cinch that the April 12 hearing will be the best-attended. How often do you get a chance to see a DoD Special Agent pull up smutty GIFs on dual 8' projection screens in a Federal courtroom? The question is, of course, which GIFs? On the WELL, folks are betting that the salacious collection will include at least one snapshot of female genitals nailed to a table. At least, that the image that Bruce Taylor delights in using as an example of cybernastiness. Still no word on the true identity of Grey Flannel Suit. Stay tuned for more reports. ----------------------------------------------------------------------------- We're back in court on 4/12, 4/15, and possibly 4/26. Mentioned in this CDA update: The American Reporter <http://www.newshare.com/Reporter/today.html> Joe Shea <joeshea(a)netcom.com> DoD's Howard Schmidt <howardas(a)aol.com> MU's HCI Institute <http://www.cs.cmu.edu/~hcii/> Dan Olsen at BYU <http://www.cs.byu.edu/info/drolsen.html> BYU's censorship policy <http://advance.byu.edu/pc/releases/guidelines.html> Censorship at CMU <http://joc.mit.edu/> Brock Meeks on Howard Schmidt: <http://fight-censorship.dementia.org/fight-censorship/dl?num=2039> Brock Meeks' CyberWire Dispatch on Bruce Taylor: <http://fight-censorship.dementia.org/fight-censorship/dl?num=2040> Joe Shea's complaints about ACLU wanting to "stand alone in the limelight": <http://fight-censorship.dementia.org/fight-censorship/dl?num=2014> <http://fight-censorship.dementia.org/fight-censorship/dl?num=2036> <http://fight-censorship.dementia.org/fight-censorship/dl?num=2037> This and previous CDA Updates are available at: <http://fight-censorship.dementia.org/top/> <http://www.epic.org/free_speech/censorship/lawsuit/> To subscribe to the fight-censorship mailing list for future CDA Updates and similar discussions, send "subscribe" in the body of a message addressed to: fight-censorship-request(a)andrew.cmu.edu Other relevant web sites: <http://www.eff.org/> <http://www.aclu.org/> <http://www.cdt.org/> ----------------------------------------------------------------------------- (This CDA Update was compiled from various firsthand reports.) -----------------------------------------------------------------------------

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Re: So, what crypto legislation (if any) is necessary?
by Bill Stewart 17 Dec '03

17 Dec '03

At 10:25 AM 3/29/96 -0800, Jim Bell wrote: >At 05:49 AM 3/29/96 -0500, Black Unicorn wrote: >>I thought I would take the time to let everyone know that this is >>baseless as well. Most jurisdictions forbid third parties to reveal >>prosecution inquries to the principal for which they are holding >>documents or other information. A VERY few have laws on the books that >>require this disclosure. Switzerland is no longer one of them. > >As usual, Unicorn is FOS. Not entirely in his facts, but in his >conclusions. To "forbit third parties to reveal prosecution inquiries" is >an obvious violation of freedom of speech, and in fact is PRIOR RESTRAINT. >Maybe Unicorn can't see what's wrong with that, but I can. It is unclear >whether this has ever been tested in court, or whether that test occurred >recently. Black Unicorn is absolutely correct that this is generally the law. Jim Bell is absolutely correct that laws like this are offensive and outrageous. Unfortunately, Jim then rants at Unicorn for suggesting that this would be the case; you'd think he'd be the first to realize that there are laws out there that are offensive and outrageous and enforced. >For example, if I ask my ISP to send me an anonymous, encrypted message with >the word, "Rosebud" in it to me if he receives any requests to tap my >connection, he can do so with no fear of being discovered, because no third >party can decrypt the message, know who is is from, or know the real meaning >of the word, "Rosebud" in the context of an encrypted, anonymized message. >Further, since the whole thing is by pre-arrangement, even I cannot prove >(to the satisfaction of a third party) that the message really meant what I >would interpret it to mean. The message is useful to me, as a warning, but >it could never turn around and "bite" the ISP. Now that's an interesting wrinkle to the problem. I suspect that, as you suggest, there will be ISPs, especially in non-US jurisdictions, that are willing to send out "Rosebud" messages to anonymous remailers, or to fail to send "Remarque" messages, or to debit anonymous accounts for data retrieval services rendered while also supporting billing-status checking by anonymous remailers. From a crypto-anarchist dogmatic perspective, it'll definitely happen, though there may be a rough transition until there's enough critical mass to make it undetectable (and note that "undetectable" is a tougher standard than "untraceable"...) # Bill Stewart, stewarts(a)ix.netcom.com, +1-415-442-2215 fax-2527 # # Spam. It's what's for dinner.

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Re: "unsubscrive" again!
by Bill Stewart 17 Dec '03

17 Dec '03

At 10:10 PM 4/3/96 -0800, Timothy C. May wrote: >Yet another "unsubscrive"? Is this some weird alternate spelling? Or are we >being trolled? My gut feel is that it's a troll. Don't know if it's a Medusa with tentacles all over the world subscribing and asking to undescrive, or whether somebody's been forging subscription requests and sending along bogus instructions for getting off. Sigh.

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e$ Signorage
by rah＠shipwright.com 17 Dec '03

17 Dec '03

At 3:50 PM 4/3/96, Hal wrote: > Or do you mean that people who receive > ecash will not want to deposit in their bank accounts, but just turn > around and spend it? Yes. Or maybe even invest it there. I was just finished a little 800 word blurb for Wired's Idees Fortes section on, (guess what?) "Geodesic Capital", which talked about just such a scenario. I believe money which is never redeemed back at the bank is called signorage in the currency biz. Whatever signorage *actually* is, Kawika Daquio of the ABA (B for "Banking"), the Fed makes $20 billion a year on it. Not much against a trillion dollar federal budget, but, hey, every little bit helps... Stuff that doesn't get returned also useful for other stuff, like the reputation of the currency. When was the last time someone went in and cashed in their dollars for gold, or silver, at the Fed? It's legally impossible now, but the French did it until Nixon stopped it by floating the dollar, in the early seventies, if you remember, and it used to be done by normal people all the time. Pierpont Morgan had to bail out Presedent Garfield?, Cleveland? with a European treasury bond flotation because there was a run on the treasury at the turn of the century. > I will point out that with regular currency, most merchants who receive > it just deposit it at the bank, save for a bit passed out as change. Unless, of course, they're in Russia (remember the money plane?), and other places. That's where that $20MMM comes from, I think, but I'm not sure. > Supermarkets don't actually take the cash their customers give them and > hand it to their suppliers. They deposit it and pay with checks. So > the "life cycle" of a $20 bill is pretty much from the bank, to the > customer, to the merchant, and back to the bank, only to repeat the > cycle. Maybe I'm talking about net balances on the net. e$ in circulation overall. I'm really starting to stretch here, you can tell. My guess is in the old days before book-entry stuff like credit cards, and even pervasive checking accounts, cash had to be more physically robust, because it probably stayed out longer. Remember those old double-eagles? Gold is certainly durable. More probably people just exchanged worn-out bills for cleaner ones, but that meant that the money stayed in cash. > Ecash, it seems to me, is already able to circulate to this > extent, although of course it is not yet widely used. Indeed. On both counts. :-). If my WAG about digital cash certificates eventually replacing demand deposits comes about (my claim is that they'll eventually be cheaper, and maybe more secure someday), then money would tend to stay on the net. That's when I figure we'll have actual e$-currency. On the other hand, one of the best deterrents against someone cracking or stealing the bank's key is to "expire" your currency issues, so there might be some "rolling over" of the the money on the net, expecially if it's anonymous. Just like they traded in worn-out bills in the old days. Hmmm. As usual, I seem to be loosing my wiggle room here. Welcome to quibble-punks. ;-). (Me! Not you, Hal!) Cheers, Bob Hettinga ----------------- Robert Hettinga (rah(a)shipwright.com) e$, 44 Farquhar Street, Boston, MA 02131 USA "Reality is not optional." --Thomas Sowell The e$ Home Page: http://thumper.vmeng.com/pub/rah/

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Re: National id already here?
by Bill Stewart 17 Dec '03

17 Dec '03

At 04:35 PM 4/3/96 -0800, Yap Remailer <remailer(a)yap.pactitle.com> wrote: >http://www.aamva.net/AAMVAnet_New_Systems.html says: > Coman said [police] officers can use "CDLISCheck" to access commercial > driver license status, history and AKA information. She noted that > the new service was developed in response to a Congressional mandate > that requires access to commercial carrier and driver information by > at least 100 roadside sites by 1996 and at least 200 locations by 1997. > >There's a congressional mandate for nationwide online id??? There are a lot more regulations on interstate truckers than on most people; it's somewhat within the Constitutional guidelines.

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"unsubscrive" again!
by tcmay＠got.net 17 Dec '03

17 Dec '03

At 12:51 AM 4/4/96, Batman wrote: >unsubscrive * batman(a)internet.infomaniak.ch >unsubscrive * batman(a)ns.infomaniak.ch >unsubscrive * batman(a)mail.infomaniak.ch Yet another "unsubscrive"? Is this some weird alternate spelling? Or are we being trolled? Apparently Batman has not been reading any of the recent posts on this subject--which is not surprising, for correlative reasons--so I doubt he'll even read this message. But in the hopes that he comes out of his Batcave long enough to fire up his Batcomputer: How to subscribe to the Cypherpunks mailing list: send a message to "majordomo(a)toad.com" with the body message "subscribe cypherpunks". To unsubscribe, send the message "unsubscribe cypherpunks" to the same address. For help, send "help cypherpunks". Don't send these requests to the Cypherpunks list itself. And be aware that the list generates between 40 and 100 messages a day. --Tim May Boycott "Big Brother Inside" software! We got computers, we're tapping phone lines, we know that that ain't allowed. ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay(a)got.net 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^756839 - 1 | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."

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unsubscrive * Peter.Posch@koeln.netsurf.de
by Peter N. Posch 17 Dec '03

17 Dec '03

unsubscrive * Peter.Posch(a)koeln.netsurf.de

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Rebuttal to Dvorak
by David K. Merriman 17 Dec '03

17 Dec '03

Letters to the Editor, PC Magazine RE: April 23 issue I found Mr. Dvorak's name-calling and finger-pointing sufficiently inspirational that I have posted an editorial rebutting his April 23 column on our Web server at http://www.shellback.com/editorials.htm (yes, the 'l' is missing at the end :-) Permission is hereby granted to reprint and/or repost the article in total. David Merriman webmaster(a)shellback.com Amarillo, TX ------------------------------------------------------------- "Giving money and power to government is like giving whiskey and car keys to teenage boys." P. J. O'Rourke (b. 1947), U.S. journalist. <><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><> http://www.shellback.com/personal/merriman/index.htm

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Fascinating troll with forged newgroups
by Rich Graves 17 Dec '03

17 Dec '03

Looks like the Nazis forged newgroup messages for rec.fag-bashing, rec.org.kkk, and 100 RFD'd groups in order to get their little messages across. How entertaining. What a marvelous new form of net.vandalism they've discovered. Or is this not new? The clearly forged Date: header and the cover newsgroups are pretty transparent, if you ask me. -rich

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