[I'm back to getting mail late, sometimes by days, as Netcom's overloaded servers bounce incoming mail, which means it gets resent some time later. For example, as I write this, I've seen Sandy's "HIT MEN" response to David Merriman, but not Merriman's post. This straggly situation puts me at a disadvantage, but I shall strive to overcome it.] Sandy Sandfort writes:
I don't buy it. Anonymous digital assassins, murder escrows and all that work fine in an artificial, abstract, game-theory world. I doubt we'll see much--if any--of it in the Real World. Why? Because the market is too richly textured not to come up with its own cultural, ethical and digital fixes.
Of course the real world will evolve complex, richly-textured constructs. We all know that. I never presented a claim that the exact, and simple, behavior could be predicted. Markets just don't work that way.
Would you do business with a escrow that was the bag man for contract murders? I wouldn't, you wouldn't and the vast majority of people in the world wouldn't. That wouldn't stop some escrows from performing that service, but it would run up the cost. When the costs rise high enough, profitable opportunities are created for false escrows to enter the business. That's just one problem that can interfere with such an odious endeavor; there are more.
I can't follow Sandy's logic here. That I wouldn't use such services, that Sandy wouldn't, etc., is hardly persuasive. Contract killings happen today, after all. Sandy says this "would run up the cost." But from what basis? I've made no predictions about the costs, either with or without the participation in such markets by Sandy or me! What the costs will be is unknown to me, and I don't plan to try to forecast the costs. All I claim is that anonymous escrow services "solve" the specific problem raised earlier about one or more of the parties welshing on the contract. A kind of 'clearing' mechanism. In any case, there are in fact "escrow agents" today for contract murders. Mob families act in this way, putting the "full faith and credit" of their organizations behind such hits. (I'm of course not saying that welshing never occurs, that snags never develop, etc. Like any market, imperfections exist.) The mob families are not cryptographically pseudonymous, naturally, but to the extent the code of omerta applies, the internal transactions and discussions are cut off from outside observation. Reputations matter. If it becomes known that Frankie the Lip took money and didn't make the hit he contracted to do, he'll not get many more jobs (and his Don may send him to sleep with the fishes, for undermining the market value of his own rep). And so on. I won't belabor the point about how organized crime works, except to say that contracts are routinely enforced by a mixture of things, with reputation an important constituent. Yes. the threat of ultimate violence is paramound, and this is of course lacking in the crypto case. So we have to examine areas where only "reputation" matters. I've done this in earlier posts on this very topic.
I think the best way to illustrate that the anonymous murder business is nothing more than a bugaboo, is to set the best minds on the planet--Cypherpunks--to work on the problem. Let's all put our thinking caps on, and come up with answers to the follow hypothetical situation:
Let us assume a world with totally anonymous communications and payments (strong crypto, remailers, digital cash, etc.).
1) How would YOU scam money from the system without actually knocking anyone off? Or in the alternative,
2) How would YOU use technology to address the problem from police/private investigator perspective?
I'm betting that with no more than a few moments of thought, Cypherpunks will come up with a ton of hacks. To get the ball rolling, here are two from me:
SCENARIO ONE
I set up a meat-and-potatoes escrow business. I keep my nose clean. I honor my obligations. I build up a good reputation. At some point, I'll be approached by a murderer and the person who is hiring him or her. I'll accept the payment. When the murder is committed, I won't pay off. The murderer will (a) sue me (I don't think so), (b) damage my reputation (I'll leave this one as an exercise for the student), or (c) murder *me* (ah, but first he has to find me; in the world we posit, that won't be
(a) The party to the escrow transaction posts a transcript of the communications from the escrow agent, including his digitally signed statements, and produces proof that he upheld his end of the bargain. He then says: "Al's Anonymous Escrow" announced they were holding money for this job, as you can see. I did the job, as you can see from the digitized images I took at the scene, and now Al won't pay up. I call him a liar. I plan to move my business to "Murder, Incorporated," which seems to have a much better attitude." Al cannot deny that the escrow arrangement was made, due to the digital signatures (all handled via anonymous pools or similarly untraceable means, it should be emphasized, despite the obviousness). Al can of course claim that the hit was not made, that the presenter of the evidence was not the actual hitter, etc. (if the party to the signed transaction is also the presenter of the digitized image of the murder scene, for example, that would be mighty compelling evidence that the party was in fact centrally involved). (b) damage to reputation. Sandy leaves it as "exercise for the student," but I think the point I just made shows that fully pseudonymous agents can still present evidence to the court of public opinion and have their reputations influenced positively or negatively. Reputations will still matter. (Again, nothing in my arguments presumes to speak to what the market costs will be, how long it will take reputations to evolve, etc. I have some ideas, but won't make them right now.) (c) retaliating physically against the escrow agent. This is straw man, as we all know.
very easy). If this scenario happens very often, it'll take all the profit out of the murder business.
If an escrow agent does this very often, he'll lose all his business. Opportunity for an agent who takes his reputation more seriously to then gain market share. Just as with Swiss banks who can claim an account was closed by the customer. Since signatures are so easy to forge, relatively speaking, this ought to happen a lot, right? Of course, it happens almost not at all (so far as I've ever heard), because of the points about reputations, future business, etc. Lots of points here, and I'm not planning to get into a massive discussion of why and how illegal gambling (bookies, for example) works this way. (I'll just make the aside that Sandy's arguments apply to bookies the same way: bookmaking can't thrive, because some or most bookies will cheat their customers and their customers can't sue them, can't affect their reputation, and can't physically attack them. The key is that cheated customers can and will "spread the word." This applies, with some minor (but interesting) wrinkles, to crypto-mediated bookies. They're all closely related issues...)
SCENARIO TWO
I set up a phoney murder-for-hire business. Someone contracts with me to bump-off their rich uncle. The client deposits my payment with a reputable escrow company, "Murder Escrows R Us." I go to the uncle and tell him the whole deal. Using digital technology, bribed coroners, etc., we fake his death. When the news hits the Net, the escrow pays me off. The uncle comes back to life, disinherits whomever he suspects wanted him dead. And I laugh all the way to the digital bank. I create a new pseudonym, place another murder-for-hire ad, and do it all again. Given our Brave New World, nobody can touch me.
This just says that standards of proof will be a factor, naturally, and that markets will take these into account. The phoney murder for hire business, call it "Sandy's Salvage Company," will start of with a very low reputation, as with any new outfit with little track record. The standards for proof, the fees paid, etc., will be proportionately affected. However, "Tim's Tribunal," which has had a 5-year record of "really and truly" offing dozens, and which has not been "caught" as being in any of the scams Sandy described, will demand and get a proportionately higher fee, and will face fewer delays in being paid. (Similar arguments apply to any of the parties, which is why I've followed Sandy's lead in switching the focus from how to handle cheating escrow agents to cheating contract killers.) I've written enough. I'm not persuaded by Sandy's arguments that the threat of cheaters is sufficient to derail these markets. It hasn't derailed them in the real world. It won't in the less traceable but even more reputation-critical crypto world. Again, I've made no claims to how ubiquitous such markets will be, or what the market dynamics will be. Only that strong crypto makes possible certain types of markets which are now very illiquid. The issue of "untraceable cheaters" comes up in many more areas than just contract killings: information markets, pseudonymous consulting, etc. This is why reputation, so important in the physical/legal world, is also so important in the crypto world. --Tim May .......................................................................... Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@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."