Len Sassaman writes:

I've been thinking about how to create pay-per-use remailers for some time. The reasons for needing a remailer payment system are obvious: aside from handling spamming and flooding, it would encourage more people to run remailers. If a remailer operator can expect to make money off of a remailer, or at least recoup his losses, he's more likely to do so. (Discussion of how liability changes when money is involved is for a different time.)

"Digital cash" in the traditional sense isn't necessary for a pay-per-use remailer system. Like MojoNation, I am going to refer to the digital cash coins as something that has no monetary value in the traditional sense.

This contradicts your previous point. If the coins have no monetary value, that is, they can't be spent for anything useful, then it will not be possible to meet your objectives of allowing a remailer operator to make money off his remailer or at least recoup his losses. You can give someone all the Monopoly money in the world and it won't encourage them to go into the business. And the real sticking point is if these remailer tokens are not based on cash, how do the remailer users get them? If they just send in a request and are given them for free, then there is little point to the whole exercise. You could charge hashcash for them as was proposed earlier, but then you might just as well use hashcash directly in the remailer chain. If the tokens are non-free, that will raise the costs of running pingers and cover traffic. Of the 5000 messages a large remailer handles per day, surely the majority will fall into this category. Making people pay for remailers will drive down usage levels (by standard economics) and make the remailers less secure. Digital cash tokens must be checked in real time with the bank for validity. Otherwise you have a double spending problem. (Hashcash avoids this by embedding the payee in the token.) That will increase the complexity of the remailer, the amount of traffic it must support, and give more information to eavesdroppers. Clearly it is mandatory to use fully blinded cash/tokens for this application. For some situations blinding is not all that important, but for remailer chains it is absolutely essential. Otherwise the bank would be able to trace messages through the remailer network. Hence you will run into the complicated patent situation which will exist at least through 2005.

If the remailer client were to keep track of which tokens were paid to which remailer, the user could determine where in a chain message delivery failed, or if the message exited the last hop (not exactly the same as if it was delivered, but close. The last remailer could cheat, or the recipient's mail server could fail. There's ways to improve this, though.)

The same thing could be achieved by putting a nonce into each message packet which the remailers would publish. The user knows the chain of nonces he used and can determine whether his message made it through the remailer. Something like this was suggested by John Gilmore several years ago. The bottom line is that while the idea is seductive, ultimately it doesn't make sense. Charging for remailers would make them harder to use (adding the overhead of figuring out how to get tokens and possibly paying for them), less secure (opening new lines of information for an attacker), and less anonymous (since fewer people would use the network). There are other, equally good methods for increasing remailer reliability. Since people appear to be adequately motivated to run remailers even without profits, there is no need to move to a system which would add cash tokens with all of their attendant disadvantages.