cyphrpunk wrote:
In the electronic cash literature, governance issues have rarely been raised, let alone properly addressed. Systematic treatment of transparent governance in digital payments begun, AFAIK, with the research of Ian Grigg.
One example is the Sander and Ta-Shma paper I mentioned earlier: http://citeseer.ist.psu.edu/sander98auditable.html
I wasn't aware of this paper, probably because it was published in Crypto rather than FC. Quickly flicking through it, I stopped at the end of section 3.2 which raises some interesting claims. On the face of it, it would seem that in order to operate the system, * merchants have to update frequently * merchants cannot accept real-time generated Tx, where "real-time" is inversely related to "frequently" in the first point * users have to likewise update many times per coin While the solution may be elegant, I can't see how that would work in real life. The goal for a transaction is quite simple: send one message, get one message back. (In practical engineering terms you can't get much more efficient than that.) But, the real point here is that users will use the cheapest system in preference to anything else, so a more efficient system will dominate a less-efficient system, in the long run. Sander and Ta-Shma's solution seems to propose something remarkably expensive in message terms. (Mind you, if he has done what he has claimed, that is a remarkable result!)
In short, the basic idea is for the issuer to _publish_ in an undeniable manner the responses (with some additional info) to exchange requests instead of sending the information back to the requesting party using a private channel. I do think (in agreement with several reviewers of my work) that the setup proposed in the discussed paper, where the communication between the users and the issuer is such that the issuer's responses to users' requests are broadcast and archived in public records is novel.
It will be interesting to see more details of how this works. Sander and Ta-Shma also had the server publish information for every issued coin, and then used zero knowledge techniques for the depositor to show that the coin was on the list. This added great complexity to the system.
Ah ok. So we concur on the cost aspects. As an aside, Sanders did pay a lot of attention to these areas. However, what he was focused on was "regulatory" issues, as distinct from "governance" issues. Now, some would call them the same, but I would not. Governance is about the system looking after itself and its users, where as "regulatory" issues bring in a grab bag of wider issues which have little to do with the system, other than their presence having threat effects. Hence for example, the bank robbery problem is included in governance because it steals money from in the system and threatens system collapse, whereas money laundering is an exogenous threat that only effects the system via regulation and can never damage the system or users endogenously. iang PS: it was never necessary to pay attention to ML issues any more closely, because all digital cash (including anonymous ones) systems generally had much stronger AML capabilities in comparison with classical banking systems, so it wasn't as if there was much point in improving them.