December 2003 - cypherpunks-legacy

Re: Taxes in the digicash world
by Bill Stewart 17 Dec '03

17 Dec '03

SUMMARY: A: Quotation. B,C,D: usual rehash E: Interesting conclusions A) At 06:17 AM 7/30/96 -0500, ichudov(a)algebra.com (Igor Chudov) wrote: >The question is, how can the government TECHNICALLY collect taxes? .... >Let's say, maybe this tax would work: every time someone verifies that >a piece of digital cash is valid, s/he has to pay the government a little >percentage of the amount. Since digital banks are easier to control than >other participants of the market, this kind of tax legislation is easier to enforce. .. >Another alternative that I see is property taxes and poll taxes, or >taxes on some commodities such as oil. But incomes seem to be hard to track. B) Basically, you can either tax income, consumption, transactions, ownership, and the right to do business. Ownership of land and easily traced tangibles, like houses and cars, still works, but isn't a big enough source of revenue for current government appetites, and taxing consumption (i.e. purchase) of these items is also revenue-limited. US-based corporations are regulated - by taxing profits, they're given an incentive to report all their consumption, generating a recording stream that fingers employees, contractors, and other corporations, making their incomes more visible. Similarly, business licensing raises the visibility of people who might otherwise engage in profitable services (typically in the name of protecting the consumer through quality control), and often creates transaction records such as building permits. C) Taxing bank _transactions_ isn't realistic - it encourages people to use offshore banks, and it's a major change in the way US taxes work. Even with payee-and-payer-anonymous digicash, when the digicash gets stored in an account for translation to treecash, the bank can tell which account, though they can't tell when and from whom you got the digicash, and if they pay interest they must report it, so that tells the IRS your average balance, letting them play the traditional game of "you received $X in your bank account, prove that it wasn't taxable income" (again, unless you're banking offshore.) D) As long as you're buying physical stuff, it's generally either small-volume (e.g. handicrafts and artwork) or made by corporations that are relatively traceable, because they're forced to report their incomes, or else it's material that's purely black-market anyway, like dope. But today's economy is moving away from manufacturing and mostly into services; the low-paid stuff like lawnmowing and babysitting helps support poor people, but isn't a big revenue impact. The interesting problems occur when both your source of income and most of your consumption are communication-based intangibles - consulting, electronic paperwork, writing software, writing entertainment, selling electronically-delivered wares, laundering money, laundering software, laundering entertainment, buying software, buying entertainment, buying consulting for your business. Since the services and payment can both be delivered invisibly, that _can_ let lots of people get under the radar. E) I think the battleground for taxation and control over the digital economy will be fought in two or three areas. One is wiretapping, of course, to protect us from narco-porno-taxevaso-terrorists; attempting to control the key management structure will be a big part of this, since it lets you trace the players as well as the money. (Even if they don't get your private keys, and can only force registering of, say, snail-address along with public keys, that gives them much of the game.) A related push is censorship, probably with mandatory authorship identification ostensibly to enforce content labelling. But the other big push will be for licensing of computer practitioners and software - there's been some attempt at this already, partly from the serious safety folks and partly from the state-level business-licensing meddlers, but I think we'll see far more of it as the government realizes that it's a big hook for retaining tax visibility. Because the software business is extremely portable and geography-independent, much of the tracking will be from the demand side. Software for some reasonably large fraction of use may need to be certified by either a licensed practitioner or a corporation that can be liable. After all, we _need_ to protect the integrity of the National Information Infrastructure to preserve American jobs and protect our kids! # Thanks; Bill # Bill Stewart, +1-415-442-2215 stewarts(a)ix.netcom.com # <A HREF="http://idiom.com/~wcs"> # Dispel Authority!

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Re: fbi, crypto, and defcon
by Chris Adams 17 Dec '03

17 Dec '03

On 30 Jul 96 08:42:26 -0800, ceridwyn(a)wolfenet.com wrote: >making laws). The question was rephrased: "How do you personally feel >about exporting strong crypto", and again they refused to answer on the >grounds that they were there as spokesmen for the FBI, but people could >talk to them later and ask any questions they liked, and "the answers may >surprise you". Evidence that maybe some goons really do have a clue, but ^^^^^ >are still too afraid to do anything about it... //cerridwyn// This probably isn't the most accurate phrase. Generally, goons wouldn't even have said *that* much... I'm really starting to think this is a confirmation of a corollary of the Dilbert Priciple: incompetence rises to the top. // Chris Adams <adamsc(a)io-online.com> - Webpages for sale! Se habla JavaScript! // Automatically receive my resume or PGPKEY by sending email with a subject // of 'send PGPKEY' or 'send resume'. Capitalization counts so be careful!

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Re: TLAs on cypherpnks (was R
by Deranged Mutant 17 Dec '03

17 Dec '03

A story I heard: During a privacy conference back when Clipper was first proposed (about 3 yrs ago) people were questioning an NSA rep about escrow. He started off his rebuttal by asking "Is Sternlight here?" and then contined his reasoning as to why Clipper was a good thing. Don't know if this actually happened, but I'm sure if it did some here would remember it. --Rob On 30 Jul 96 at 5:35, pjn(a)nworks.com wrote: > In> Is this the first confirmed report of TLA cypherpunk-monitoring? > > Might be the first reported, but many people probably thought it was... > I did... --- No-frills sig. Befriend my mail filter by sending a message with the subject "send help" Key-ID: 5D3F2E99 1996/04/22 wlkngowl(a)unix.asb.com (root@magneto) AB1F4831 1993/05/10 Deranged Mutant <wlkngowl(a)unix.asb.com> Send a message with the subject "send pgp-key" for a copy of my key.

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RE: Let's Say "No!" to Single, World Versions of Software
by frantz＠netcom.com 17 Dec '03

17 Dec '03

Someone asked a few days ago what US companies are doing to oppose ITAR. many of them are taking public positions on the ProCODE bill. Another of the things they are doing is deploying strong crypto domestically. (Arun Mehta and Tim May have detailed the mechanisms why this domestic deployment will have world-wide impact.) Here is a start at a list of such companies: Community ConneXion - Too much to mention, Thanks Sameer IBM - The Anarchistic Key Authorization system (from U of Texas), see 6th Usenix Security Symposium proceedings Netscape - SSL PGP Inc - 'nuff said Sun Microsystems - SKIP implementation, PGP v3 implementation Please add to the list. We should recognize and remember our friends. ------------------------------------------------------------------------- Bill Frantz | Cave ab homine unius lebri | Periwinkle -- Consulting (408)356-8506 | [Beware the man of one | 16345 Englewood Ave. frantz(a)netcom.com | book] - Anonymous Latin | Los Gatos, CA 95032, USA

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Re: Let's Say "No!" to Single, World Versions of Software
by shamrock＠netcom.com 17 Dec '03

17 Dec '03

At 3:02 7/31/96, Timothy C. May wrote: >This point has been raised by us many times. And, to be fair, this point is >not lost on the NSA/Freeh/Denning/Gorelick crowd, I am sure. That is, they >would not countenance the importation into the U.S. of "Iraq-GAKked" and >"China-GAKked" programs, for example. > >So, what's the deal? The resolution of this quandary almost certainly lies >in an "international agreement," along the lines of the various key escrow >meetings which have been held (Karlsruhe in '93, Washington in '94, etc.). >A "New World Order" solution, with complicated reciprocal agreements about >whom the trusted key authorities might be, how nations could gain access, >etc. (These relationships are too complicated for my brain to handle...how, >for example, would one come to an agreement with Libya? What about Cuba, >given that many of our nominal allies trade freely with Cuba and chafe when >we try to get them to join our boycotts?) I don't see a global agreement on GAK happening anytime soon. But that doesn't mean that a less ambitious agreement can't be reached. Perhaps it will come out of OECD, perhaps it will be limited to G-7. We will see an agreement on GAK amongst the major players, with the exception of Japan. After all, the players are faced with the same dilemma: how to best control the behavior of their citizens. -- Lucky Green <mailto:shamrock@netcom.com> PGP encrypted mail preferred. Defeat the Demopublican Unity Party. Vote no on Clinton/Dole in November. Vote Harry Browne for President.

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G7 Anti-Terrorism Reports [BRIEF]
by karl_marx＠juno.com 17 Dec '03

17 Dec '03

Cypherpunks: At 1735 CDT on Tuesday, July 30, 1996, CNN Atlanta during World News Tonight reported (in a _very_ brief flash) several "resolutions" adopted by the Group of Seven (G7) trade meeting in Paris. At the bottom of the list of resolutions was to "prevent terrorist from using the Internet" (quote from CNN anchorwoman). No further explanation was given in regards to that statement, but methinks that in wake of recent terroristic activities in this country, Pro-CODE in Congress, and Netscape Navigator 3.0b3 in the hot little hands of Americans everywhere, there could be a complete retreat from the "progressive" attitude of legislators in this country towards strong crypto. John Young has already requested further information about the G7 meetings, and it would probably behoove us all to know precisely what it was that was said before such a resolution was agreed upon. Or, better yet, whose idea it was to attempt to "prevent terrorists from using the Internet." Apologies to all if this is redundant information, and apologies to the purists for intruding with this newsflash. ObCrypto: Anyone have any more information on Royal Dutch Shell apparently the first customer of TIS' firewall package with key escrow ? Has such a purchase been confirmed, and if so, does it still entail an agreement with the British government as an escrow agent ? -J. Malcolm +-=-+-=-+-=-+-=-+-=-+-= j malcolm summers / karl_marx(a)juno.com / summersj(a)southwestern.edu ignorance is not bliss +-=-+-=-+-=-+-=-+-=-+-=

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RE: A Libertine Question
by frantz＠netcom.com 17 Dec '03

17 Dec '03

At 8:13 PM 7/29/96 -0400, Duncan Frissell wrote: >Perhaps the communitarians in the audience will have to fall back on >disfellowship as the ultimate sanction (like the early Christians). They >won't be able to apply any more advanced weaponry. Just as the ultimate net sanction is excommunication (usually via the ISP, killfiles etc.), the ultimate communitarian sanction is shunning. Anything more takes force, and government reserves the use of force to itself. ------------------------------------------------------------------------- Bill Frantz | Cave ab homine unius lebri | Periwinkle -- Consulting (408)356-8506 | [Beware the man of one | 16345 Englewood Ave. frantz(a)netcom.com | book] - Anonymous Latin | Los Gatos, CA 95032, USA

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Taxes in the digicash world
by ichudov＠algebra.com 17 Dec '03

17 Dec '03

Hi Suppose that digital cash becomes easy enough to use and becomes the mainstream medium in most [or at least many] economic transactions. The question is, how can the government TECHNICALLY collect taxes? I do not mean to start `libertarianism vs. socialism' discussion, I am more interested in the technical aspects of tax collection when transfers of money are protected by strong crypto.. Let's say, maybe this tax would work: every time someone verifies that a piece of digital cash is valid, s/he has to pay the government a little percentage of the amount. Since digital banks are easier to control than other participants of the market, this kind of tax legislation is easier to enforce. Of course these banks may be offshore, and then such collection becomes problemstic. Another alternative that I see is property taxes and poll taxes,or taxes on some commodities such as oil. But incomes seem to be hard to track. What else? - Igor.

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Re: NBC
by Martin Minow 17 Dec '03

17 Dec '03

>So how was the tv hacker presentation? I was one interveiwed and was in >las vegas at defcon when it aired. I never saw the final product. > >se7en About what I expected: "We're only exploring, we're not trying to damage anything, etc." -- I didn't tape it so I can't give you more than that impression. Since I've been in this business for well over thirty years and, about ten years ago, had one of my systems infested by Kevin Mitnick, I'm not particularly sympathetic to the "we're just trying to learn" mentality -- if you want to learn, buy a PC and a Linux CD, write some code, give it away, and make a real contribution to the community. Martin.

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Paranoid Musings
by frantz＠netcom.com 17 Dec '03

17 Dec '03

Sometimes paranoia strikes. Since these musings are crypto related, I thought I would share them. (1) Now everyone knows that 40 bit RC4 is weak, but just how weak is it? We know that a university CS student can break one message in a week using the universities farm of workstations. But, our foremost reputation agency for crypto strength, the ITAR, allows systems with RC4-40 to be exported. What does this mean? I combine the above with Whit Diffie's observation that, while crypto users are interested in the security of *each* message, organizations which monitor communications want to read *every* message. A TLA interested in monitoring communications would need to crack RC4-40 much faster than 1/week. Now expensive specialized cracking equipment can certainly speed up the process, but there may be a better way. If cryptanalysis of RC4 yields techniques which make the process much easier, then it is the ideal cypher to certify for export. The paranoid conclusion is that there is a significant weakness in RC4. (2) What did Microsoft give up to export its crypto API? Well, if you were a TLA, what would you want. I think I would want an agreement to be able to insert my own code in that vendor's products. Then I would be able to have widely distributed Trojan horses signed by the vendor. I would have the opportunity to significantly weaken standardized crypto systems installed world wide. Conspiracy theorists, start your mailers. ------------------------------------------------------------------------- Bill Frantz | Cave ab homine unius lebri | Periwinkle -- Consulting (408)356-8506 | [Beware the man of one | 16345 Englewood Ave. frantz(a)netcom.com | book] - Anonymous Latin | Los Gatos, CA 95032, USA

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