Excerpts from mail.limbo: 7-Dec-95 More FUD from First Virtual Douglas Barnes@communiti (1157*)
It is important to remember that Nat Borenstein is a principal
It's Nathaniel, please.
in a company that very much does not want to see anonymous e-cash succeed.
This is utter nonsense. If you check the cypherpunks archive, you'll find that a year ago I was talking about how to make Digicash succeed as a floating currency. Several people within FV thought it was inappropriate for me to be giving free advice to "competing" payment systems, but I think there's room for plenty of payment systems on the net, and that nobody is going to monopolize the market with a single payment scheme. If I didn't want anonymous cash to succeed, why would I waste my time explaining alternate models (not previously under discussion!) about how to make it succeed? I *am* skeptical about the extent to which anonymous cash *can* succeed, but in point of fact I'd like to help. I think society will be better off if one of the payment options is truly anonymous. I think that level of privacy will inevitably carry a high surcharge, however, for reasons that I keep pointing out and you keep ignoring.
Their extremely backwards technology cannot compete in the long term with cryptography-based methods, and therefore they are compelled to run around the country and on the Internet, bad- mouthing cryptography and anonymity at every turn, while pointing to some charity work for Phil Z. as a fig leaf to cover their actions in this regard (sort of like Exxon building an artificial reef and claiming to be friends of the environment.)
Sticks and stones may hurt my bones, but I do feel an obligation to provide an explanation for anyone who hasn't been following Mr. Barnes' rantings over the last year. For reasons I really don't understand, Mr. Barnes seems to have a personal vendetta against First Virtual. That's fine, it's his right. But there are some facts he prefers to ignore, in favor of spreading misinformation and slurs: 1. Our "backwards technology" includes what may be the world's most sophisticated internet firewalls and email robots. We were the first people to connect the Internet to the financial networks (including, indirectly, the Federal Reserve) and have operated the system for over a year, with several breakin attempts every week, and nobody has even come close to breaking in. Internally, everyone in our company uses pgp extremely heavily, and I suspect that if you go to more "cryptography-oriented" companies you will NOT find that their CEO and marketing people know how to use PGP. They are, for the most part, all talk and no action when it comes to cryptography. We all use it every day, even the non-technical people. This has given us a lot of insights into the strengths and weaknesses of cryptography in the hands of non-technical people. [FYI, newcomers to this discussion, it's sentences like the last one -- which imply that, horror of horrors, there are actually *weaknesses* involved in the use of cryptography -- that Mr. Barnes refers to as "bad-mouthing cryptography." We call it common sense.] 2. Our support for Phil Zimmermann is based on long-term friendship and personal principles, and on the fact that our business relies critically on PGP. Phil is one of my personal heroes as far as network politics are concerned. He's also not the kind of person who would let himself be used for publicity purposes, and he's totally uninhibited about criticizing us when he disagrees with us. (Just ask him!) He's also given us some advice on the use of PGP in the next-generation FV system, which WILL use cryptography, but in a manner you don't expect, and with more secure key management than you'll find in any existing or publicly proposed payment system.
I have, on several occasions, refuted his "infinite liability" rant, but it keeps on resurfacing. A few months ago, I wrote a short tech note on why this claim doesn't hold water. I thought I might stretch it into something longer, but other things have more urgently grabbed my attention.
Yes, you wrote this theoretical treatise and proposed it as a refutation to some specific arguments about Digicash. It wasn't relevant to the digicash argument, at least at the time, so I didn't pay a lot of attention. But basically, what your argument comes down to is that in the event of a catastrophe, users can be told they have to sacrifice their anonymity if they want to keep their cash. As I have said all along, the basic tradeoff is between anonymity and risk limitation in the event of disaster recovery. If the digital bank can, at its pleasure, tell you that your anonymity has been revoked unless you want to just say goodbye to your money, then I think the anonymity was a sham in the first place. (Who's using fig leafs here?) First Virtual transactions are also generally untraceable unlesss First Virtual decides (or is court-ordered) to trace them. At least we're up front about it and don't call that level of privacy "anonymity". Your solution to the problem -- that anonymous cash has infinite liability -- basically comes down to letting the bank make you stop being anonymous whenever it chooses. That's our solution, too. -------- Nathaniel Borenstein <nsb@fv.com> | (Tense Hot Alien In Barn) Chief Scientist, First Virtual Holdings | VIRTUAL YELLOW RIBBON: FAQ & PGP key: nsb+faq@nsb.fv.com | http://www.netresponse.com/zldf