A simpler variation... Customer sends cash or money order to digital bank, along with a floppy with an anonymous email address (via a remailer) and a public key.
For any real business, the customer comes from the 99.99% of the population that are not hacker/cypherpunks, not the one or two dozen people who are. These protocols aren't at all simple for the customer, unless the vendor (the same or another vendor) provides some free software on the net or by mail to automate the process (eg PGP with a user-freindly shell for generating the key, and a script for creating an anon e-mail address). But then we have several steps: (1) customer reads ad about cool net.service (a) they contact directly (but this ruins privacy) (b) they contact independent distributor of PGP key and anon-remail address generating software. (but how does customer trust _them_?) (2) vendor sends key & address generators (via e-mail or floppy), and physical-mail-security instructions (3) customer sends in money order (from mail drop or without return address!) along with chosen anon e-mail address and public key. (4) vendor sets up account and e-mails the d-cash. (5) we still need a physical mail drop or bearer bank account for withdrawals, refunds, etc. of physical cash. Pretty exhausting for the typical service industry. Most customers will pick the service that's easier to sign up for, even if some ivory-tower critics criticize its security. Security and privacy are very easy to hype, but often difficult to prove to the layman, who doesn't know or care about the math. Digressing a bit, we could use some sort of independent (not government-run please!) certification company, which takes (perhaps in alliance with liability insurance providers) responsibility for examining the service's computer programs and protocols and giving out "privacy ratings". Secure vendors could then use "Whit Diffie certified, top privacy rating" in their ads. Also, the issue of which parts of these schemes are *legal* is critical, but being completely overlooked. Any lawyers out there with comments on this? The best protocols for legal and illegal operations may be very different, legality of digital cash will vary between jurisdictions, etc. And what about certifying agencies that call a protocol "insecure" simply because it supports activities illegal in their jurisdiction, not for any reasons of physical or software privacy? The cases of illegality and physical/software security are both important risk factors for the vendor, customers, and liability insurers to consider, but ratings for each should be quite distinct. But this discussion is too abstract. We need a real, visceral example. The enclosure below illustrates some of the some legal and privacy issues of a Mom & Pop BBS operation in the pre-d-cash era. This service could use some privacy -- it's an on-line football game with a $35 sign-up fee and cash "prizes." I don't know whether or not it's legal for the vendor, but it's certainly illegal for a significant subset of potential net.customers. There will be thousands of these little on-line services springing up in the near future, if there aren't already. The BBS# is area code (802), but I've lost the rest of it, sorry. You can call their voice# toll-free for more info. Sports Spectrum Ltd. (800) 639-3719 (voice) ----------------------------- P R I V A C Y N O T I C E ----------------------------- Pursuant to the Electronic and Communications Privacy Act of 1986, 18 USC 2510 et. seq., Notice is Hereby Given that There are NO FACILITIES PROVIDED BY THIS SYSTEM for SENDING or RECEIVING PRIVATE OR CONFIDENTIAL ELECTRONIC COMMUNICATIONS. ALL Messages Shall be Deemed to be Readily Accessible to the General Public. Do NOT Use this System for ANY Communication for Which the SENDER Intends ONLY the Sender and the Intended Recipient(s) to read. Notice is Herby Given that ALL Messages Entered into this System CAN and MAY Be READ by the Operators of this System, WHETHER OR NOT they are the Intended Recipient(s). By Your Use of this System, You Agree to HOLD HARMLESS the Operators Thereof Against ANY and ALL CLAIMS Arising Out of Said Use NO MATTER THE CAUSE OR FAULT. ] .... Please remember that this password is protecting yourself against the unauthorized use of YOUR credit card. Please take all necessary precautions to guard it. Since all communications between customers and Sports Spectrum Ltd. occur via computer-to-computer, the password is the only way for Sports Spectrum Ltd. to verify that it is actually you on the other end of the phone connection. Gaining access to Sports Spectrum Ltd.'s service by invoking your password at logon time implicitly authorizes the use of your credit card to pay for any subsequent purchases during that particular session. -----------------------