------- Forwarded Message Date: Wed, 28 Apr 1993 17:56:13 -0700 From: Gavin Doughtie <gavin@well.sf.ca.us> Message-Id: <199304290056.AA26690@well.sf.ca.us> To: gnu@toad.com Subject: Electronic escrow? How could two paranoid entities make use of digital cash and encryption to sell a chunk of data (letUs say something really valuable like a list of famous women linked to Elvis Presley in 1992) without 1) revealing their identities to each other or 2) involving a third party to act as an RescrowS agent. The paradox IUm thinking about is one where the purchaser of the information doesnUt want the sellerUs digital cash to be worth anything until the data being sold can be provably decrypted, and the seller doesnUt want the info being sold to be decryptable until the cash turns out to be genuine. You're a well-known cryptography person; I'm a struggling writer. If you're not inclined to respond, perhaps you can direct this message to someone who can. Thanks very much! Gavin. ------- End of Forwarded Message
The most salient thing for this response that Gavis says is
I'm a struggling writer.
There are lots of interesting technical issues here, but I'll confine my comments to the overall situation. [exchange of money for data]
without 1) revealing their identities to each other or 2) involving a third party to act as an RescrowS agent.
The first thing to realize about electronic money is that there is always a third party involved. Since information does not obey mass conservation such as, say, gold does, you can't have free floating money electronically. The information has to start somewhere and end in the same place. So to say that there is no escrow agent is already stretching the point, since in certain ways the transaction is already mediated.
The paradox IUm thinking about is one where the purchaser of the information doesnUt want the sellerUs digital cash to be worth anything until the data being sold can be provably decrypted,
"Provably decrypted" is really a useless concept here. Suppose I am selling information. If I want to rip you off, I can send random bits and claim that it is encrypted text. I can also make up random text and encrypt that. In both cases, the bits I have sent you are meaningless. One uses valid encryption, one doesn't. The separating invariant here is meaning, not encryption.
and the seller doesnUt want the info being sold to be decryptable until the cash turns out to be genuine.
There are protocols which allow for simultaneous disclosure of information, where two parties want to exchange information simultaneously. This is not really the appropriate protocol, since money is not necessarily valid by form alone. But since you have electronic money in the first place, you have an intermediary. There's no reason for this intermediary not to be an escrow agent. In fact, there's really no risk for escrow agents who requires that all bits be encrypted when passing through their machines; there's no knowledge of content and it's just a commercial transaction like any other. As far as anonymity, that's easily solved by mail or packet forwarding services. Eric
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