1.) Chaum's e-cash coupled with WWW/Mosaic is a de facto internet mercantile protocol. Hardly. The announcement just says it's available, not that anybody's using it. Since the information came from a press release, we can assume that lack of mention of an important customer, like a bank, means that there are no such customers right now. What that says to me is that DigiCash has looked for customers, and not found any. They've certainly had the time. Furthermore, it's not clear that this software can be both legally and usefully deployed in the USA. The Foreign Bank Secrecy Act of 1974 requires the microfilming of all checks of value over $100, with administrative provisions for extending the required recording keeping. Other check-like transaction accounts have since been added. So can a bank avoid this? First, they can limit transaction amounts to less than $100. That violates my criterion of usefulness; it would have some utility, to be sure, but just as surely would be a severely crippled utility. Second, they might be able to record the transaction as a "cash purchase". The problem here is that this accounting technique may be ruled non-compliant by the regulators, which would make the transaction _illegal_ (since there's not way to comply by recording both parties). The regulators have been authorized to move activities across the boundary of legality by legislative action. Now, one cost of deploying any such system would be the expected (negative) value of the risk taken in losing the whole development investment to an adverse regulatory decision, let alone possible actual penalties. Even beyond this, there's the IRS $10K cash reporting limit, and the attendant restrictions on structuring. Detection of structuring becomes much more difficult, and banks are held responsible for at least some of the enforcement. Here's another set of risks, like above. Just how big is the potential Internet market (in, say, two years), compared to other banking segments? Precious small right now, really. Just plain profitability is also an issue. Add to that costs of licensure and costs of risk and you're left with some significant barriers to USA deployment. 2.) It seems to me that that e-cash, contrary to the status quo's thinking, is *critical* to internet commerce. No, it's not critical. Some form of transaction mechanism is critical. Privacy is not critical to the bulk of the economy, though. Face up to it. If it were, it would be so obvious that we wouldn't be discussing it on a mailing list. In fact, _we_ wouldn't be discussing it, but rather a whole bunch of bank vice presidents. An anonymous cash market is most unrestricted and efficient market there is, because privacy/security (more than trust, I think) is the capstone of any serious transaction mechanism. Is anonymous cash really the most efficient? No, not in all cases. When no one is looking, the anonymity is irrelevant, and identifier-based schemes work fine. Is, for example, anonymity the most efficient for the Federal funds transfer network? No, because the values of money are so large that default on a transaction would case serious systemic problems. Cash does have some advantages, in particular its immediate and final clearing. These can reduce transaction costs in certain markets. Anonymity, however, is not a panacea. Characterizations of where anonymity is _already_ practiced indicate potential places for initial deployment. Negotiation for trades in the foreign exchange market are frequently anonymous, even though the trades themselves are not. There is a gold and silver exchange in Shanghai, I think it is, where the exchange keeps no records and all transactions are settled between traders. Motivated list members may wish to hit the libraries and look for more. 3.) Since a big pile of the discussion on this group lately has been about our collective concerns about an RSA-approved version of PGP, I think there is a real parallel here in e-cash. PGP only requires the cooperation of your email correspondent in order to function. The risk of a patent infringement suit is small, since the parties involved are small. Digital cash requires the participation of many more parties, some of whom have, almost of necessity, deep pockets. The parallel does not extend very far. Without the creation of an entirely black market which can remain completely unexposed (and this is more difficult that it appear even on second or third thought), it is unlikely that digital cash technology will be usefully deployed independently. Eric