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Digital content spurs micropayments resurgence
by R. A. Hettinga 07 Sep '04

07 Sep '04

<http://zdnet.com.com/2102-1104_2-5347513.html?tag=printthis> Digital content spurs micropayments resurgence By Matt Hines CNET News.com September 7, 2004, 4:00 AM PT URL: http://zdnet.com.com/2100-1104-5347513.html Think small. With its meteoric rise to success, Apple Computer's iTunes digital music service not only changed perceptions about whether consumers were willing to pay for online content, but it also highlighted the rising promise of micropayments. On Tuesday, 2-year-old BitPass, a payment company in Palo Alto, Calif., is expected to announce $11.75 million in venture capital, along with the news that former American Express Chairman James Robinson III will join its board of directors. Robinson is also a partner in one of the firms investing in BitPass, New York-based RRE Ventures. News.context What's new: The success of digital music sales has purveyors of micropayment services humming a happy tune. Bottom line:Micropayments have failed to become a macro-business, but the increasing popularity of digital content could bring a cloudburst of pennies from heaven. More stories on micropayments While credit card companies and online transaction specialists like PayPal are ringing up bigger sales online, business models aimed at helping e-commerce vendors facilitate smaller deals, or micropayments, are getting a boost from digital content sales. If this sounds familiar, it should. But the so-called Internet currency vendors of the dot-com era, companies including Beenz, Flooz and DigiCash, failed to generate enough business fostering micropayments to survive. Fast-forward a few years, and news that iTunes topped 125 million downloads last week is more evidence that digital content may hold the key to unlocking the low end of e-commerce. Micropayments are typified by the 99 cents that iTunes charges to download a song or the $2.99 users might see on their Cingular Wireless phone bills after buying a custom ring tone. According to recent research published by TowerGroup, the total market for Internet and wireless micropayments, led by demand for digital content, will increase by 23 percent annually over the next five years to reach $11.5 billion by 2009. TowerGroup, based in Needham, Mass., charted the micropayments market at just over $2 billion in 2003. Bruce Cundiff, an analyst with Jupiter Research, thinks the e-commerce market is in its third or fourth wave of development of micropayment technologies. The success of iTunes, coupled with continued growth of broadband, will make digital content the catalyst that pushes the sector forward rapidly, Cundiff said. "What it comes down to is that there simply must be a viable transaction model for smaller-cost products to make a dollar off e-commerce sales, but I think with what we've seen already in digital media, it's clear that people are figuring out how to make it work," Cundiff said. Tuning up for takeoff Web shoppers have historically preferred to pay with credit cards. But because credit card companies typically charges fees for processing and customer service on every transaction, credit cards can be an extremely inefficient way of making a small purchase, with the fees often eating most of the profit margin. Still consumers have begun to get used to the idea of buying small items over the Net. Growth of the digital content market seems almost a certainty, based on the projected expansion of segments including music services, Internet publishing, and applications for mobile devices, such as custom ring tones or games. Cambridge, Mass., analyst firm Forrester Research has predicted that music downloads alone will become a $1.4 billion business by 2006, accounting for nearly 10 percent of annual music sales in the United States. Jupiter Research estimates that revenue from online content will reach $3.1 billion by 2009, driven by an increasing number of broadband-ready homes spending money on Web-based music services, games and e-books, among other things. Industry experts agree that iTunes deserves a lot of the credit for opening consumers' eyes to the option of buying online in micro-size increments, and most seem to feel that digital content will continue to dominate the market for small Web-based transactions. "Micropayments don't just represent buying low-priced items. They can also can be used to get people to test new products, or try out a service that charges a lot more for a subscription." --analyst Nick Holland, Mercator Advisory Group According to Nick Holland, an analyst with Shrewsbury, Mass.-based Mercator Advisory Group, growth of the micropayments market will be almost completely dependent on music, ring tones and games, specifically, at least for the next several years. The analyst estimates that such content will constitute a $2.3 billion market in the United States this year alone, and while Holland said subscriptions will remain consumers' favorite method of payment for digital content, wider use of micropayments will increase opportunities for vendors to lure new customers. "Micropayments don't just represent buying low-priced items," Holland said. "They can also be used to get people to test new products, or try out a service that charges a lot more for a subscription. There's certainly demand for downloads, ring tones and pay-as-you-go gaming, but it remains to be seen how profitable this market can be using micropayments." For officials at eBay's online transaction subsidiary, PayPal--who say the company is already handling millions of low-dollar transactions--it is clear that digital content represents the most promising opportunity for immediate growth in micropayments. Peter Ashley, director of business development for San Jose, Calif.-based PayPal, believes that with iTunes, Apple drew up a template that many other companies will try to emulate. "Once there is ability for more companies to facilitate smaller charges, going as far down as pennies, nickels and dimes, without incurring the same sort of credit card transaction fees you see today, new businesses will open that simply could not exist in the past," Ashley said. The executive envisions transaction systems soon allowing e-commerce companies to process any transaction, no matter how small, letting people creating new kinds of digital content, such as games or ring tones, to more profitably market their wares. Ashley said that PayPal's role as an established leader in online transaction processing will give it the ability to watch other firms test the waters with different micropayment systems before it begins more actively pursuing the market. PayPal parent eBay is already piloting a program that lets a select group of people auction digital music via its site, a test which could illustrate how profitable it can be for individuals or smaller companies to execute the smaller deals inherent to digital music sales. "We've already had to develop a unique product for the music pilot, and we're excited about seeing other areas of the market develop," said Ashley. "The opportunity is huge, say, if you consider how many wireless customers there are out there. You get an idea of how significant the demand for content like ring tones or screen savers could become." How the deal is won The biggest question facing the micropayments market is just what method of transaction will appeal to consumers while allowing vendors to slice out enough profit to keep small-ticket sales lucrative. Apple has admitted that iTunes is not a major source of revenue. It works primarily as a sales tool for its iPod digital music players. Apple does a majority of its business with credit cards but also offers payments methods ranging from stored-value accounts to gift certificates. But smaller companies looking to build their core businesses around marketing digital content must have alternatives to credit cards--including subscriptions, prepaid accounts, merchant charge aggregation and direct-to-bill. In the wireless sector, direct-to-bill is expected to continue to lead. Mobile-service providers encourage customers to download content onto their devices, with the cost added to their wireless bills. Subscriptions remain preferable for content providers in other areas because they allow companies to more easily digest credit card transaction fees, because monthly or annual fees are typically larger transactions. "Subscriptions are what every vendor wants to sell, but you have to start somewhere with the consumer, and the other types of micropayments can allow companies to do get in the door with buyers," said Mercator's Holland. "A lot of content companies are going to look at micropayments as a stepping stone to future subscriptions." ""That first wave of payment technologies, the currency companies especially, were too early in the development of e-commerce to succeed." --BitPass CEO Michael O'Donnell Among the vendors vying for a place on the micropayments landscape with alternative payment technologies are firms including BitPass and Peppercoin, which are taking markedly different approaches to the sector. Peppercoin serves as a micropayment transaction aggregator that helps vendors save money on credit card charges, while BitPass markets stored-credit accounts and transaction processing to help facilitate both buyers and sellers. BitPass' system works much like the prepaid calling cards you can buy at many convenience stores. Customers put money into debit accounts and can use the funds at any site affiliated with the company. Vendors can begin accepting the BitPass cards simply by downloading a free software client provided by the company. "That first wave of payment technologies, the currency companies especially, were too early in the development of e-commerce to succeed, and the content companies weren't ready to handle it either," said Michael O'Donnell, chief executive of BitPass. "We're seeing an online payment evolution moving from free content, to subscriptions, and now per-item sales, with the options for vendors and consumers growing quickly." At Peppercoin, the emphasis is placed squarely on e-commerce vendors. The Waltham, Mass., company acts as a proxy between vendors and credit card companies, allowing its users to aggregate their small-value transactions into larger bills to cut down on the fees charged them by the credit card companies themselves. Peppercoin signed a deal with the Smithsonian Institute last year to help the organization begin marketing music files stored in its archives on a per-song basis. The organization had previously struggled to do so, based on the percentage of its income that was in turn headed back out to the credit companies in the form of transaction fees. According to Rob Carney, vice president of marketing at Peppercoin, increased demand for digital content is driving short-term growth of micropayments, but the potential for the market is far greater. "Online digital content sales, specifically for music, are generating more attention for micropayments than ever before, but it makes sense, because what are you going to sell for dollars online that you have to pay to ship?" Carney said. "Digital content is leading the way, but it's really just the thin edge of the wedge when you consider the possibilities in the physical world as well." -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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Re: What are the risks associated with partially know cipher keys
by Werner Koch 07 Sep '04

07 Sep '04

On Tue, 7 Sep 2004 13:24:39 +0800, Padraig MacIain said: > problem. However, does it offer a great risk for something like > OpenPGP if the passphrase used to access the secretkey is partially That depends on quality of the passphrase; it makes dictionary attacks easier. > compromised? And in turn if the passphrase is completely known yet the > secret key is still secured (physically) does knowing this passphrase > risk a complete compromise of the key pair? No. The protection of the private key is is independent of the key. They are in no way related. The key is based on a random string and only the protection of this key is based on the passphrase. This protection only helps against a lost (but protected) private key. Salam-Shalom, Werner

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Gilmore case: CNN
by J.A. Terranson 07 Sep '04

07 Sep '04

http://www.cnn.com/2004/LAW/09/06/airline.id.ap/index.html Government wants ID arguments secret Monday, September 6, 2004 Posted: 4:07 PM EDT (2007 GMT) SAN FRANCISCO, California (AP) -- The U.S. Department of Justice has asked an appellate court to keep its arguments secret for a case in which privacy advocate John Gilmore is challenging federal requirements to show identification before boarding an airplane. A federal statute and other regulations "prohibit the disclosure of sensitive security information, and that is precisely what is alleged to be at issue here," the government said in court papers filed Friday with the U.S. Ninth Circuit Court of Appeals. Disclosing the restricted information "would be detrimental to the security of transportation," the government wrote. Attorneys for Gilmore, a 49-year-old San Francisco resident who co-founded the Electronic Frontier Foundation, a civil liberties group, said they don't buy the government's argument and that its latest request raises only more questions. "We're dealing with the government's review of a secret law that now they want a secret judicial review for," one of Gilmore's attorneys, James Harrison, said in a phone interview Sunday. "This administration's use of a secret law is more dangerous to the security of the nation than any external threat." Gilmore first sued the government and several airlines in July 2002 after airline agents refused to let him board planes in San Francisco and Oakland without first showing an ID or submitting to a more intense search. He claimed in his lawsuit the ID requirement was vague and ineffective and violated his constitutional protections against illegal searches and seizures. A U.S. District Court judge earlier this year dismissed his claims against the airlines, but said his challenge to the government belonged in a federal appellate court. Now in his appellate case, Gilmore maintains the federal government has yet to disclose the regulations behind the ID requirement to which he was subjected. "How are people supposed to follow laws if they don't know what they are?" Harrison said. The government contends its court arguments should be sealed from public view and heard before a judge outside the presence of Gilmore and his attorneys. The government, however, said it would plan to file another redacted public version of its arguments. A date for a hearing on the matter has not yet been set.

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stegedetect - looks like "we" need better mice
by Sunder 07 Sep '04

07 Sep '04

http://freshmeat.net/projects/stegdetect/?branch_id=52957&release_id=172055 http://www.outguess.org/detection.php Steganography Detection with Stegdetect Stegdetect is an automated tool for detecting steganographic content in images. It is capable of detecting several different steganographic methods to embed hidden information in JPEG images. Currently, the detectable schemes are * jsteg, * jphide (unix and windows), * invisible secrets, * outguess 01.3b, * F5 (header analysis), * appendX and camouflage. Stegbreak is used to launch dictionary attacks against JSteg-Shell, JPHide and OutGuess 0.13b. Stegdetect and Stegbreak have been developed by Niels Provos. ----------------------Kaos-Keraunos-Kybernetos--------------------------- + ^ + :"Our enemies are innovative and resourceful, and so are we. /|\ \|/ :They never stop thinking about new ways to harm our country /\|/\ <--*-->:and our people, and neither do we." -G. W. Bush, 2004.08.05 \/|\/ /|\ : \|/ + v + : War is Peace, freedom is slavery, Bush is President. -------------------------------------------------------------------------

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Test - Ignore.
by Neil Johnson 06 Sep '04

06 Sep '04

Test. -- Neil Johnson http://www.njohnsn.com PGP key available on request.

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Remailers an unsolveable paradox?
by Nomen Nescio 06 Sep '04

06 Sep '04

-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 Are remailers an unsolveable paradox? We want to be able to provide the means for whistleblowers and others to communicate in a secure and anonymous fashion. Yet we need to make sure we're not abused too much since sooner or later laws will catch up with the remailers should abuse sky-rocket. Once upon a time all email servers were open relays. This was a friendly time and spam wasn't invented. As time changed the focus turned on securing the relaying procedures and has continued until this day. Yet as we know the flow of spam (most of it coming directly or indirectly from US) continued to increase, despite even existing legislation today. What are the possible solutions for the remailers? Make all remailers middleman only and adding the ability to opt-in for delivery outside the network? Having a network of middleman remailers and some nymservers that only delivers to other nymserver or opted-in servers will at least provide some means for people to communicate between themselves. It would in practise destroy the ability to contact anyone outside the network though, making the network an isolated place for a few. Using techniques like Hashcash should be more or less mandatory even today to make it harder to mailbomb or send large amounts spam? Why is it not? Regardless of what any hardcore cypherpunk or old-timers in the remailer community may think about any ideas imposing restrains on the useability of remailers something just have to be made about the abuse of the system. I also predict that the abuse will increase so time is ticking in a sense. Making sure we have robust remailing services in one shape or another and at the same time have some kind of at least indirect acceptance from legislators and also a low degree of spam flowing through are essential goals. The average naive and ignorant redneck will never ever understand the principal arguments for free speech that makes remailers useful. The average american do not think and analyze what is told to him. You will probably today find millions of americans who believe that Saddam and Al-Qaeda did business just because Bush and the administration lied about that initially, even though it's more or less confirmed today that those links were not there. The rednecks also vote however (to some extent) and that's why it will be a piece of cake to strike against the remailers if the politicians would like to. And they will, if and when serious abuse were to happen more often utilizing remailers. What would happen if it was found (or simply suspected or claimed) that some terror deed was planned using remailers? How long time would it take for us to see new laws being proposed? Not long. And don't forget that anyone (like Tom Ridge himself) could send bogues messages through the system trying to Since providing a true non-censoring remailing service and at the same time safeguard against spam and abuse are therotically incompatible I guess remailers are indeed a paradox waiting to be shut down sooner or later by politicians if we're not open to at least discuss some aspects of how these services are operated. Johnny Doelittle -----BEGIN PGP SIGNATURE----- Version: Tom Ridge Special v1.01 iQA/AwUBQTWdszVaKWz2Ji/mEQJlUwCfT/jWnw/p2ydTJTKMYKA5/hs+Dm8AoNoE r9bl2EtJ3CQpZPgfkSPfGBWB =B8dt -----END PGP SIGNATURE----- > Effective today, Lemuria will be going middlemen. > > Sometime around the middle of the month, Lemuria will go away. > > This is final. > > > The main reasons are that I've lost my faith in the usefulness of > the remailer network. I have indications that the remailer network > is > being massively abused, on the scale where the legitimate mails are > a tiny fraction that would be better served using other means. > > There are two main reasons for my thoughts. One is I have looked at > the bounces I receive, and compared their numbers to my statistics. > According to that data, without having run a statistically > significant analysis, the major traffic coming through Lemuria is > Spam, with > threats and harrassment a second. I realize that in the no-bounces, > the fraction of legitimate mails will be higher, but even assuming > a factor of 10, it is still a negligable part. > > Second, I've the mail attached below yesterday. In case you can't > read german, it is essentially spam advertising the mixmaster > software and some book and/or software I haven't tested, might be a > mixmaster > client, might be a trojan. This is a sign for me that the anonymous > remailer network is being used systematically for abuse, on a large > scale. I don't want to be a part of that. > > As mixmaster has no features whatsoever to prevent this crap, and > the "encrypted only" switch doesn't do what it should do, and > legitimate traffic is close to zero anyways, I'll be taking Lemuria > down and > leaving the remailer community. > > It was an interesting time, and between frog, the SciTol fanatics > (from both sides) and a couple really cool people, I've learned a > lot about society that I'm not sure I really needed to know. :)

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Vote for nobody
by Sarad AV 06 Sep '04

06 Sep '04

hello, the election commision of india had a proposal to the govt. that the voter should be able to vote for 'none of the above'. Though one can predict that such a proposal will never be approved by the government, it makes a lot of sense. Is any other democratic country seriously thinking of implementing such an option? Sarath. __________________________________ Do you Yahoo!? Read only the mail you want - Yahoo! Mail SpamGuard. http://promotions.yahoo.com/new_mail

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Re: Remailers an unsolveable paradox?
by Tyler Durden 06 Sep '04

06 Sep '04

Variola wrote... > > Making sure we have robust remailing services in one shape or > >another and at the same time have some kind of at least indirect > >acceptance from legislators and also a low degree of spam flowing > >through are essential goals. > >Any legislator seeking to control how people use a communications >medium needs killing. Well, although the sentiment is appreciated, I'm not sure it's well applied in this case. What this guy seems to be saying is that it's better to 'solve' the SPAM problem now rather than waiting for legislators to use Spam as a reason to try to shut down the remailers (and this seems distinctly possible particularly if George W makes it to his 3rd term!). I don't think the guy is looking for state-ish 'OK', but pointing out that things get a lot more difficult if/when remailers or their use is outlawed. Like back in the day when I used to toke on a regular basis...I sure was going to keep scoring nicklebags and whatnot, but my count would probably have been better at my potstore if it were legal. (And yes, a potstore...there's tons of them in NYC with plexiglass walls and a few canned food props lying around. You stand in line and order your nickel/dime bag just like buying tokens.) The hascash idea is OK, and obviously will work (as of now...the dividing line between human and machine is clearly not static, and smarter spam operations will start doing some segmentation analysis and then find it worthwhile to pay up). But the kind of person that may have legitimate need of a remailer may not understand and/or trust what would probably be necessary to use hashcash. And OK "that's their tough luck", but then I always feel there's safety in numbers. -TD _________________________________________________________________ Get ready for school! Find articles, homework help and more in the Back to School Guide! http://special.msn.com/network/04backtoschool.armx

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Private GPS tracking
by Major Variola (ret) 04 Sep '04

04 Sep '04

GLENDALE, Calif. - Police arrested a man they said tracked his ex-girlfriend's whereabouts by attaching a global positioning system to her car. Ara Gabrielyan, 32, was arrested Aug. 29 on one count of stalking and three counts of making criminal threats. He was being held on $500,000 bail and was to be arraigned Wednesday. "This is what I would consider stalking of the 21st century," police Lt. Jon Perkins said. Police said Gabrielyan tracked the 35-year-old woman, who was not identified, after she ended their relationship, showing up unexpectedly at a book store, an airport and dozens of other places where she was. Police said Gabrielyan attached a cellular phone to the woman's car on Aug. 16 with a motion switch that turned on when the car moved, transmitting a signal each minute to a satellite. Information was then sent to a Web site that allowed Gabrielyan to monitor the woman's location. The woman learned how Gabrielyan was following her when she discovered him under her car attempting to change the cell phone's battery, police said. http://story.news.yahoo.com/news?tmpl=story&cid=519&ncid=718&e=10&u=/ap/200… ----- Beslan, coming to a school near you

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University Students in California Warned of Possible Identity Theft
by R. A. Hettinga 04 Sep '04

04 Sep '04

<http://online.wsj.com/article_print/0,,SB109417629363709000,00.html> The Wall Street Journal September 2, 2004 10:03 p.m. EDT University Students in California Warned of Possible Identity Theft Associated Press September 2, 2004 10:03 p.m. LOS ANGELES -- California university officials have warned nearly 600,000 students and faculty that they might be exposed to identity theft following incidents where computer hard drives loaded with their private information were lost or hacked into. Since January, at least 580,000 people who had personal information about them stored in university computers received warnings they might be at risk. The latest instance of missing equipment occurred in June at California State University, San Marcos. An auditor lost a small external hard drive for a laptop computer. Personal data, including names, addresses, Social Security numbers and other identifiers for 23,500 students, faculty and staff in the California State University system were contained on the missing hard drive. At the University of California, San Diego, and San Diego State University, hackers broke into computers and obtained access to files of personal data for more than 500,000 current or former students, applicants, staff, faculty and alumni. Officials from the Cal State system and UC San Diego said they have no evidence any personal data were stolen. At the University of California, Los Angeles, a stolen laptop in June led officials to notify as many as 145,000 blood donors that their data might be in the open. A California law requires people be notified when they might be exposed to identity theft went into in July 2003. Officials say that might explain the rash of notices. "There's no reason to assume that suddenly in July 2003 all these computer security breaches started occurring," said Joanne McNabb of the Office of Privacy Protection in the California Department of Consumer Affairs. "It's just that we know about them now, when we didn't hear before." -- ----------------- R. A. Hettinga <mailto: rah(a)ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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