-- On 25 Apr 2003 at 22:56, Tim May wrote:
I think it may just not be possible for some bright programmer to develop a solid digital money (henceforth, DM) system and deploy it while still making money, avoiding some kind of prosecution or lawsuit (civil lawsuits for many different reasons).
[...]
* Real DM will likely be introduced in a guerilla fashion, much as Pr0duct Cypher anonymously released Magic Money a decade ago.
The mint cannot be anonymous. Needs reputation, and sizable wealth. Mint probably employs programmer, or is programmer. If the code is public domain, then there will be multiple mints, with some more willing to disregard hostile governments than others. I suggest the following introduction: Introduce for micropayment services (identity is too expensive for small payments, which is why credit cards fail below five dollars) Useful for antispam email charge, remailer user fees, file sharing networks (solving the free rider problem), pornography by the minute, and tips for videocam performers. Need some legal and profitable application to get the software fully developed, debugged, and people used to it. When people are using it for dimes, they will want to start using it for large sums, and then things get interesting. Dubai is currently the banker for people evading third world currency exchange restrictions. Once it is working in the micropayment ghetto, where credit cards are uncompetitive, there will be demand to break out of that ghetto, and where there is demand, there will be supply. Of course there have been many attempts to fill the micropayment niche, all of them miserable failures. I think this is due to the inherantly high costs of identity and revocability. If your payments are revocable, then you need identity, which costs, and you get involved in arbitration, which costs, and you cannot possibly afford to do that on a micropayment service.
* In my view, not necessarily the view of everyone in the DM community, the Big Win for solid DM is in illegal markets, e.g., buying and selling child porn, bestiality, snuff images, etc.
Child porn and bestiality are, like MP3s, a micropayment market. My hard drive keeps getting usenet child porn on it even though I try to prevent it. I download what I think is a Hellsing cartoon, and guess what? Among the many unviewed videos and images on my hard drive, there is probably enough child porn to put me away for fifty consecutive life sentences. My email spam is full of bestiality, even though I have numerous filtering rules designed to delete it. Surprisingly, I do not think I have seen any snuff spam -- which does not mean I am not getting it, it may be filtered by my anti porn spam rules. Just target file sharing, a legal market, according to the most recent judicial ruling, and some significant proportion of the files shared are going to be child porn etc. That is the users issue, not the banks.
* Anyone releasing such a strong DM system should be targeting the high end applications, where the needs for untraceability are very high and the willingess to pay the costs (in training, in network resources) is also high.
I disagree. Micropayments are legal. Useful if the same software has legal and illegal uses. Strong anonymity and consequent irrevocability has accepted legal, moral, and economic purpose in the micropayment field.
* In my view, most who have looked to enter the DM market (such as Digicash, Mark Twain Bank, etc.) have shied-away from precisely the areas where untraceability meets a real market need.
Mark Twain bank crippled their cash so they could stop pornographers from using it.
A digital money system where the DM may be "cancelled" will not fly. For various reasons. (Imagine your bank telling you that if they think you are violating their use policies they may simply seize your money and you'll be out of luck.)
Revocability. The various digital gold currencies are compelled to have an AUP and seize the money of people using their system when this AUP is violated, even though they very much do not want to, because of the very high costs involved.
* It may be that pioneers in this area just won't be able to make any money. This is not new. Many discoveries did not enrich the discoverer. Sometimes they were recognized in their lifetimes, sometimes not.
No money then crap software, crap software then lack of critical mass of users. Has to make money or no one will write software the ordinary end user will accept. --digsig James A. Donald 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG WeQL5KAm368l/BB5FhdV3HRZwi0tcIoVVHe9WyGK 4JEJhGr9vM1Becp1QdyRiI3U4tkF26wqs75DTGtQA