uncensorable net based payment system?
The internet looks like it is slowly moving towards anonymous micropayments for services, and metering for scarce resources. One presumes that in 10-15 years time frame such payments will be pervasive. In such an environment where you can buy bandwidth per Mb at your chosen bit-rate for anonymous ecash, and buy storage per Mb/year, and CPU time per MIPs/year there will be a large amount of readily marketable resources. That is to say high velocity efficient markets will arise for resale of bandwidth, storage and CPU hours. The interesting question then is can we actually base an entirely net based currency on trading of these resources. What would the architecture for such a payment system look like? Design goals would be that it should be: - a distributed system - not involve trusted banks - be immediately exchangeable for any currency - be outside the influence of governments and banks - be immune to government hidden taxations such as printing new money as a form of tax - be immune from government taxation - be a stable form of cash (in the face of rapidly depreciating assets like Mb/years of storage as mass storage devices continue their price plumet.) Possible? Then I can have some net cash savings backed by the rights to 1Tb of bandwidth at 100 Mb/sec. 100 Mb/sec for 3 days. A problem with this is that the market prices of the assets is continually dropping. How do I hedge against this. Can I buy futures? Sell 100 Mb/sec for 3 days now in exchange for 200 Mb/sec for 3 days in 1 years time at an predicted equivalent value? Adam -- Have *you* exported RSA today? --> http://www.dcs.ex.ac.uk/~aba/rsa/ print pack"C*",split/\D+/,`echo "16iII*o\U@{$/=$z;[(pop,pop,unpack"H*",<> )]}\EsMsKsN0[lN*1lK[d2%Sa2/d0<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<J]dsJxp"|dc`
At 01:40 PM 7/31/97 +0100, Adam Back wrote:
The internet looks like it is slowly moving towards anonymous micropayments for services, and metering for scarce resources. ... That is to say high velocity efficient markets will arise for resale of bandwidth, storage and CPU hours. ..... The interesting question then is can we actually base an entirely net based currency on trading of these resources.
It's not very stable, though it might be useful for short term exchanges of value. On the other hand, since demand for resources is very bursty and constantly fluctuating, what we're more likely to see is an agoric computing model of continuous auctions for some resources, which allows pricing to reflect the near-instantaneous demand (and therefore to fluctuate wildly, making it really useless as currency :-) # Thanks; Bill # Bill Stewart, +1-415-442-2215 stewarts@ix.netcom.com # You can get PGP outside the US at ftp.ox.ac.uk/pub/crypto/pgp # (If this is a mailing list or news, please Cc: me on replies. Thanks.)
-----BEGIN PGP SIGNED MESSAGE----- In <199707311240.NAA00742@server.test.net>, on 07/31/97 at 01:40 PM, Adam Back <aba@dcs.ex.ac.uk> said:
Then I can have some net cash savings backed by the rights to 1Tb of bandwidth at 100 Mb/sec. 100 Mb/sec for 3 days.
A problem with this is that the market prices of the assets is continually dropping. How do I hedge against this. Can I buy futures? Sell 100 Mb/sec for 3 days now in exchange for 200 Mb/sec for 3 days in 1 years time at an predicted equivalent value?
Well I see some problems with this. Any increase in bandwith requires the addition of hardware to accomplish it. It would be of little use to me to have 100 Mb/sec for 3days considering the cost of installing the lines and purchacing the extra equipment. Also in a packet switching environment how do you plan on insuring any amount of bandwith? The Backbone is not set-up for this. The only way in the current enviorment that you can guarantee a given bandwith is by having a dedicated connection point to point. - -- - --------------------------------------------------------------- William H. Geiger III http://www.amaranth.com/~whgiii Geiger Consulting Cooking With Warp 4.0 Author of E-Secure - PGP Front End for MR/2 Ice PGP & MR/2 the only way for secure e-mail. OS/2 PGP 2.6.3a at: http://www.amaranth.com/~whgiii/pgpmr2.html - --------------------------------------------------------------- -----BEGIN PGP SIGNATURE----- Version: 2.6.3a Charset: cp850 Comment: Registered_User_E-Secure_v1.1b1_ES000000 iQCVAwUBM+CAbY9Co1n+aLhhAQFocgQAiJTcSODpb2ETLqB1VlWyyUI+/g3dx/uI KMMbcqQu9D+/a6YF56b6W+LOrhO1D9P3UyNHG+0aTKXa6bQjVFH3ghVEo6D71kRR AHeH6M+ipj1tvN/LjH/3TK9kB+rgVfLlfZvH61Iyby/A9yvyKn6xoWx30SEidRuT k5Es3jxNh7g= =L/du -----END PGP SIGNATURE-----
"William H. Geiger III" <whgiii@amaranth.com> writes:
-----BEGIN PGP SIGNED MESSAGE-----
In <199707311240.NAA00742@server.test.net>, on 07/31/97 at 01:40 PM, Adam Back <aba@dcs.ex.ac.uk> said:
Then I can have some net cash savings backed by the rights to 1Tb of bandwidth at 100 Mb/sec. 100 Mb/sec for 3 days.
A problem with this is that the market prices of the assets is continually dropping. How do I hedge against this. Can I buy futures? Sell 100 Mb/sec for 3 days now in exchange for 200 Mb/sec for 3 days in 1 years time at an predicted equivalent value?
This is a VERY interesting idea Adam. But it should also depend on the time of day: 10mbps at 8 pm, when all the geeks are jerking off online, is more valuable than 10mbps at 5 am. Another observation is that a lot of folks have a lot of unused bandwidth which they keep just in case they need it once a day. If they can rent out the unused bandwidth, it'll make it cheaper to buy even more bandwidth in case they need it later - a self-feeding growth. Cool.
Well I see some problems with this. Any increase in bandwith requires the addition of hardware to accomplish it. It would be of little use to me to have 100 Mb/sec for 3days considering the cost of installing the lines and purchacing the extra equipment.
Also in a packet switching environment how do you plan on insuring any amount of bandwith? The Backbone is not set-up for this. The only way in the current enviorment that you can guarantee a given bandwith is by having a dedicated connection point to point.
I had a very interesting conversation the other day about how electrical utilities (and traders) are now developing fascinating derivatives based on the electricity as a commodity. Sure one can trade futures on electricity. Electricity also comes in different kinds and at different prices depending on the geographic location and the local time; noon electricity on the east coast is not the same as the noon electricity in chicago. All this trading leads not just to speculation, but to better hedging, more efficient utilization of resources, and lower prices for end-users. I'm shocked I myself didn't think then and there of an analogy with Internet bandwidth. --- Dr.Dimitri Vulis KOTM Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps
-----BEGIN PGP SIGNED MESSAGE----- In <cFkPae11w165w@bwalk.dm.com>, on 07/31/97 at 09:24 AM, dlv@bwalk.dm.com (Dr.Dimitri Vulis KOTM) said:
I'm shocked I myself didn't think then and there of an analogy with Internet bandwidth.
Well there are some distinct differences between a Utility (Electric,Water,Gas) and that of Ineternet bandwith. With a public utility the greatest expence is not in providing the pipe (bandwith) but in generating the resources (electric,water,gas). The oppisite of this is true with the internet. The monthy telco charges for prividing the bandwith is much more than the cost's of providing the resources (data). I think a closer analogy to the Internet is that of a highway system (Information Highway, who knew? <g>). You have the upfront expence of building the highway (bandwith) and then the expences of up-keep & maintinance (telco charges - profit). Now we have two camps for how this should be paid for. Should the users pay upfront for a certian amuont of usage (This is basicaly how it is today) or should users pay a metered rate simmilar to a toll-road. I myself prefer to pay a flat rate and make use of my time & bandwith as I see fit than to pay on a metered rate. I remember years back with Compu$erve paying a metered rate and getting +$100 mo. bills from them. - -- - --------------------------------------------------------------- William H. Geiger III http://www.amaranth.com/~whgiii Geiger Consulting Cooking With Warp 4.0 Author of E-Secure - PGP Front End for MR/2 Ice PGP & MR/2 the only way for secure e-mail. OS/2 PGP 2.6.3a at: http://www.amaranth.com/~whgiii/pgpmr2.html - --------------------------------------------------------------- -----BEGIN PGP SIGNATURE----- Version: 2.6.3a Charset: cp850 Comment: Registered_User_E-Secure_v1.1b1_ES000000 iQCVAwUBM+CWtI9Co1n+aLhhAQHUdAP/XGVlkVK1WvLxOfcLfK54hrBz0+AfHGDZ RkUg/5zWXR1ViwVnRB1GyU10ndCu1bMuboqsINE2eUBNDTqDZHBbJgN9lT7TkbeI Fxvr1tNZt+XWnwIb5XoMxT1Tp/ROD9H71lylgHOugeVjqootibOsiwiDVftmwRkh BmVyovMhSgE= =BuC3 -----END PGP SIGNATURE-----
William Geiger <whgiii@amaranth.com> writes:
In <199707311240.NAA00742@server.test.net>, on 07/31/97
at 01:40 PM, Adam Back XXIVth <aba@dcs.ex.ac.uk> said:
Then I can have some net cash savings backed by the rights to 1Tb of bandwidth at 100 Mb/sec. 100 Mb/sec for 3 days.
A problem with this is that the market prices of the assets is continually dropping. How do I hedge against this. Can I buy futures? Sell 100 Mb/sec for 3 days now in exchange for 200 Mb/sec for 3 days in 1 years time at an predicted equivalent value?
Well I see some problems with this. Any increase in bandwith requires the addition of hardware to accomplish it. It would be of little use to me to have 100 Mb/sec for 3days considering the cost of installing the lines and purchacing the extra equipment.
I wasn't thinking of using the bandwidth myself, just using it as a commodity to back an electronic cash system with. Eg it's like a gold currency, I can't eat gold or do anything that useful with it myself, but some people use it (jewelers, circuitry, etc), and those people's demand give's it value. There demand + other speculators such as myself defines the current market price. So I was thinking that this bandwidth would be readily transferable as there will always be people on the look out for a good buy for their bandwidth. If you're going to auction off unused bandwidth on leased pipes etc, there will be people dynamically buying bandwidth at the best price they can get.
Also in a packet switching environment how do you plan on insuring any amount of bandwith? The Backbone is not set-up for this. The only way in the current enviorment that you can guarantee a given bandwith is by having a dedicated connection point to point.
ATM? Virtual ATM? We were talking 10-15 years time frame there. Guaranteed bandwidth virtual pipes have got to come for metering to make sense. Metering is going to come for some aspects of the net sooner or later. Even if you buy outright your leased line and all the bandwidth on it, it will be more efficient if you can sell off spare bandwidth during your weekends and evenings. Also you could underbuy your bandwidth if you knew with an acceptable degree of certainty that you could buy in the extra bandwidth as needed in an efficient market. There will be people happy to buy your off peak bandwidth for batch data shovelling. Adam -- Have *you* exported RSA today? --> http://www.dcs.ex.ac.uk/~aba/rsa/ print pack"C*",split/\D+/,`echo "16iII*o\U@{$/=$z;[(pop,pop,unpack"H*",<> )]}\EsMsKsN0[lN*1lK[d2%Sa2/d0<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<J]dsJxp"|dc`
On Thu, 31 Jul 1997, Adam Back wrote:
The internet looks like it is slowly moving towards anonymous micropayments for services, and metering for scarce resources.
The big problem will be fraud. How do you know the ISP you are buying disk space from won't disappear after you have prepaid a year of disk space? I am not sure of the economics of moving to micropayments (A post in the e$ lists noted that Taxis can meter, but Jitneys have a flat rate, and that encryption necessary for ecash uses lots of cpu cycles and space to check for double spending - so even micropayments *must* cost far less to transact than what is being paid for), but assuming we go that direction: Any currency in bandwidth would likely be short-lived - you would keep your reserves in a more standard commodity (or even currency) exchange certificate, and spend those - one assumes that currency/commodity e-changes would be common and run by arbitrageurs who will send you real cash or commodities or warehouse receipts if you really want them. You would dial one of several access companies and insert e-coin. These e-coins would be aggregated, so that the bandwidth usage would be calculated, and the e-coins would propogate up as necessary to maintain bandwidth (and inform your client to cough up more e-coins as you use it) - the profit comes from extra e-coins not forwarded to the upstream bandwidth provider. The extra e-coins would be sent to an interest bearing account in a tax-free authority, and the records for the locals will come from a modified random poetry program. With encryption, they won't be able to determine packet content, and maybe not even destination. And if they try to do it per packet, 1M packets will be the norm, etc. (Some south american country had a very high telephone tax, so an american company set up a system where you could dial here, and it would call back (untaxed) and set up a third call - a proxy phone if you like. The two calls originating from the US were cheaper than the one call there - the country eventually blocked all calls to Nebraska, so the company moved to a 202 area code - I forget the other details, but you see what will happen).
- be immune to government hidden taxations such as printing new money as a form of tax
You cannot make any thing immune from this, but with everyone watching the central banks, you either have your ecash in commodities, or watch the foreign exchange markets closely, or have your software agent or broker do this for you. Any hint of inflation and everyone will dump the currency and anything denominated in that currency, so even mild inflation will become instant hyperinflation.
- be immune from government taxation
None of this is directly taxable, but look for a $100/phone line tax if they really get desparate (and then look for spread-spectrum digital wireless to replace landlines - those tiny bursts are awfully hard to track and meter). The can also try going after the backbone providers, but then foreign owned satellites would pick up the slack. You can only tax something until an untaxed substitute becomes cheaper, and there are lots of substitutes.
- be a stable form of cash (in the face of rapidly depreciating assets like Mb/years of storage as mass storage devices continue their price plumet.)
No form of cash is stable since cash is a measure of value, and everything else it would be exchanged for is changing. Even gold and silver change exchange rates. One of the functions of cash is as a store of value. Thus it isn't really cash if it is in a wasting asset.
A problem with this is that the market prices of the assets is continually dropping. How do I hedge against this. Can I buy futures? Sell 100 Mb/sec for 3 days now in exchange for 200 Mb/sec for 3 days in 1 years time at an predicted equivalent value?
I think you simply wouldn't store value in this form - any currency threatened with inflation is obtained very close to the point of exchange and converted back to a stable currency by the merchant ASAP. One of the ways to avoid large doublespending databases are to create the ecash notes for this with very short lifetimes, which would work well with rapidly depreciating assets. But the only way to avoid lots of CPU cycles is to issue very large (100Kpacket) notes, but you will lose anything you don't use in the session. --- reply to tzeruch - at - ceddec - dot - com ---
participants (5)
-
Adam Back -
Bill Stewart -
dlv＠bwalk.dm.com -
nospam-seesignature＠ceddec.com -
William H. Geiger III