At 12:20 21.10.95, Adam Shostack wrote:
Michael Froomkin wrote:
| i would like to propose the following radical idea: Chaumian digicash is | a nice curiosity. The future in the mdeium term (10+ years) for better | or worse belongs to Mondex.
Deploying hardware is VERY expensive.
Expense of deployment for this type of scheme does not seem to be a consideration for banks; they stand to make a ton of money as a result. There are areas where banks will resist spending money on new hardware, but smart-card stuff isn't one of them.
30m internet users at $100 (half hardware, half tech support) is 3 billion dollars to deploy today. Secure commerce on the internet would drive that 30m figure (which will probably double this year anyway) way up.
Adding hardware to a personal computer to read from and write to smart cards will cost money, but the majority of bank customers will not be interested in Internet-based transactions for quite some time. So while the potential market of Internet consumer financial transactors seems large, it is dwarfed by the sum total of bank customers who are likely to wind up with some form of non-pilot smart card-based payment system within the next 2 years. I've been told that a PCMCIA card that reads smart cards would around $30ish; I've not had the time to follow this claim up, so it could be off by a bit. Assuming it's accurate, the price doesn't present a significant hurdle to the typical PC-based consumer. And if there is enough demand, I'm sure that smart card readers will find their way into desktop and laptop machines over time. For example, Catapult's XBAND modem for Genesis and SNES has an ISO smart-card reader/writer in it; such a consumer device's manufacturing cost is sensitive to even a few pennies, so it can't've cost much to put it in there. I consider it much likelier that non-Internet specific payment systems will adapt to the Net, instead of Net-specific payment schemes seeing broad deployment. To clarify: I consider CyberCash and FV to be Net-adaptations of conventional schemes, rather than brand new payment systems.
Digicash doesn't need observer cards, which gives them a huge advantage. If they ever sign with a real bank.
There is a US law called the Bank Secrecy Act that defines the responsibilities of banks with regard to audit trails, record keeping, and disclosure of financial transaction information. After talking to quite a few people both in the regulatory and business realms recently, I am convinced that truly anonymous e-cash simply isn't going happen in the US. And the US is going to have considerable influence on how things go in the rest of the world; whether this is a good thing or not is, unfortunately, an unrelated and purely philosophical debating point. Based on my knowledge of the backing behind Mondex at this relatively early stage in the game, I am inclined to agree with Michael. _______________________________________________________________________ Stephan Somogyi Senior Editor Digital Media