Excerpts from fv: 15-Dec-94 Re: properties of FV Eric Hughes@remailer.net (3122)
Use the crypto entirely for transit security. If someone hacks your machine and grabs your passphrase and forges a transaction, at least the intruder has to grab your passphrase.
This is exactly the way we would expect to use crypto layered on top of First Virtual's protocols, if and when such cryptographic protocols are deployed widely enough to have penetrated af meaningful portion of our market.
"If and When" is Yes and Today. Anybody who can autosign their outgoing mail can participate in this kind of transaction already. Assuming the above agreement is made with respect to private keys, there is _no_ risk to the customer about loss of secret keys, and no greater risk to the merchant than what currently obtains.
The risk analysis is absolutely true. However, I have the impression you missed the phrase "deployed widely enough to have penetrated a meaningful portion of our market". I suspect that the cypherbunks and www-buyinfo communities are not the best place to get a feel for the extent to which crypto is widely deployed. Pick some random other list or newsgroup, however, and I'll be surprised if you find 1% market penetration for crypto.