At 10:35 22.10.95, Douglas Barnes wrote:

If the Digicash system allows people to set up their accounts without getting out of their chairs (which I suspect will be the case, if they do it right), it will initially get more adopters.

Agreed, especially since it's going to be a while until Mondex, NetBill et al are accessible by consumers outside of the trial areas. I wonder whether this DigiCash announcement will be a limited trial or a full-blown deployment.

I know at least one group of people who believe they have a good line on a serious security problem in Mondex.

Mondex is definitely practicing security by obscurity. Tim Jones, Mondex's CEO, was very cagey last week at the e-commerce conference about how transaction mechanics and where various public and private keys reside. I have serious questions about some aspects of Mondex's security.

o Even if the Mondex hardware were given away for free, think how much fun it is for the average user to add a new piece of hardware to their machines... ever install a sound card and CD-ROM drive on a PC? I remember reading something like 20% of all "multimedia" kits were returned, largely due to user install problems. If there is a competing method that costs the same and _doesn't_ require the hardware, people will tend go with this.

Depends on the hardware. I recently saw a pamphlet for a mag-stripe + smart card reader with a numeric keyboard for PIN entry that plugs into a PC as a bump in the wire between the keyboard and the CPU. The company is in Arizona; I can't recall the name offhand. Adding smart card capability to a PC is not in the same league of user hassle as a multimedia upgrade. It's also much cheaper.

but if you explain that the money uses existing (auditable) channels going in, and existing (auditable) channels going out, and that only spenders are anonymous, they relax considerably. They may change their minds later, but we're about to get an existence proof.

The problem is with peer-to-peer transactions that don't go through a bank. Mondex claims that such transactions are anonymous and unaudited. What would stop someone from moving a 500 pound per-card maximum from one card to the next and then back up into the system elsewhere? I'm under the impression that Mondex's value isn't serialized the way DigiCash's is, so you can't track the value itself. And if the cards themselves keep no records of transactions made with peer devices, tracking seems rather tricky.

how can you be so sure that Mondex will win over Digicash, and that they won't co-exist like, say, money orders, currency and cashier's checks (three instruments with both similar and dissimilar attirbutes)?

The different schemes have enough overlap that it's not clear to me that a single bank will want to support multiple as yet untried systems. Admittedly, we haven't yet seen which bank is working with DigiCash, but Mondex has some pretty heavy hitters behind it already. Since DigiCash is Internet-focused and Mondex is a non-net-specific system that can be adapted for use over the Net, it seems to me that a bank adopting Mondex would get more out of its investment than if it bought into DigiCash. Banks are going to get into some kind of e-cash system sooner than later, and Mondex seems to be the farthest along. _______________________________________________________________________ Stephan Somogyi Senior Editor Digital Media