At 2:19 pm -0400 on 5/4/97, Hal Finney wrote:
It is hard to understand why a system where it is impossible to track payments (Chaumian anonymity) is cheaper than one where it is possible to do so, but we choose not to. If avoiding tracking payments is cheaper than tracking them, why wouldn't participants just not bother to track them even when they theoretically could?
I believe Greg Broiles and others have answered this sufficiently for now. I'll vamp a little by saying, of course, that there's no way to tell until the two methods of digital cash are actually measured. However, I'd, um, bank, on the Chaumian variety, if the patents were ever unencumbered by Digicash's unfortunate business model. I'll also comment on the "information exaust" issue by saying that I agree with Hal's hypothesis that one of the reasons that the information is there is because of the non-repudiation requirements of government enforcement. It behooves marketers to then leverage the cost distortion of the finance department's data collection engine by adding in, at the margin, a little additional data for processing. On the net, there will be no requirement for this. The only people who need to keep books will be the meatspace net-affiliated banks. The only books kept in putting money on the net or taking it off, would be an aggregate number at the trustee, and the withdrawls and deposits of people taking money on and off the net from their respective personal and business bank accounts. The underwriter and every transaction on the net, particularly those for information (everything from music to surgery), do not need any transaction information storage. A lot of incentive to keep money on the net, over time. Also, the smaller the transaction size, the more important freedom from transaction storage becomes. Again, the idea of micromoney "mitochondria", a micropayment-settlement system for various internet resources, like SMTP, or even bandwidth, comes to mind. So, Tim and Ray also have right idea when they talk about how most small businesses don't need all the information they're forced to collect by the government for one reason or another. And, again, I claim that the net and Moore's law creates *dis*economies of scale, probably to the microbusiness, bot-sized, level, someday. And, the smaller the business entity, the less information it really needs to operate. As you subdivide a market, the more you trend towards perfect competition. (Of course, I mean "perfect competition" in the commodity-price use of the phrase, where one soybean is as good as any other. Fungible, in other words.) Branded soybeans are an oxymoron, which is why you can buy and sell futures in them. Finally, with the most abject apologies to the superior (with a brick, sir) financial knowlege of Mr. Chrispin, the very best piece of information about an efficient market for something is its most recent price. No, I don't think this represents the end of the "marketing concept" as a business model, but certainly when transaction cycles can be measured in the microsecond range, a swarm of autonomous entities will probably do a better job of fulfilling consumer wants than a multi-month top-down market analysis by an MBA. Cheers, Bob Hettinga ----------------- Robert Hettinga (rah@shipwright.com), Philodox e$, 44 Farquhar Street, Boston, MA 02131 USA Lesley Stahl: "You mean *anyone* can set up a web site and compete with the New York Times?" Andrew Kantor: "Yes." Stahl: "Isn't that dangerous?" The e$ Home Page: http://www.shipwright.com/