At 1:02 PM 8/19/94 -0700, Eric Hughes wrote:

Anyway, when I screwed up the guts to ask, Chaum told me that the going price for the underwriter's license/code was $275K plus a percentage of the net profits.

It's no small wonder that he's not gotten anywhere. Anybody who wants an operational cut of a finance system is asking for way more money than anybody might want to pony up. A bank (or similar) wants to buy technology, not a partner.

Here I was thinking it was common knowlege, and that's why I never said anything about it. I have to say that I have several friends who build real good financial models for portfolio analytics, and they get a cut of the trading profits. A bank is one of his customers. Of course, they're in Switzerland. I'm sure it happens on this side of the Atlantic with people who do currency analysis. Soft dollar stuff is a pretty common way to pay for research and software. That said, I think that there are probably cleaner ways for him to make money, like leasing his software, for instance.

the increase in traffic about his inactivity in promotion leads me to believe that he's either working hard in getting his product market-ready, which makes sense, or he's dropping the ball, which I would charitably say is an unfair reading of the facts.

A third possibility is that he's just not getting anywhere. If you want too much money for what someone else is willing to pay, you don't make a sale.

Agreed. I was trying not to tread on the sainted reputation of the master by using the word "charitable". I count your "third possibility" under "dropping the ball", by the way. In fairness, it may be true that he's really trying to bring something to market. We may never know until we read about it on the front page of the Wall Street Journal, or in the same paper's legal notices...

There are three potential benefits from any Internet money system:

1. The ability to transact and settle to the outside banking system. [snip] Here's the crux. ONLY property one has large and direct and immediate economic benefits to the issuer. [snip] If you were a bank, would you pick system 1, 2, or 3? System one will result in direct customer fees. [snip] So, with these three kinds of transaction systems in competition with each other, which do you think will win?

Let me answer that for you. It's system 1.

Now Chaum wants to offer system 3, and it's expensive to purchase. Surprised at lack of success? Not at all.

I think you're right. It goes back to the haggle we had when I first joined this list. I learned rather quickly that privacy ain't necessarily the point here. The technology of privacy, in particular strong crypto, yields something useful in a much larger arena digicash and other e$. Privacy is a beneficial byproduct of immediate and final clearing on the internet through digicash. It is not necessary and sufficient for it's use. It's possible that Chaum is immersed in the cryptographic details that he thinks that privacy is digicash's primary selling point. It certainly is the enabling technology. However, it seems that his marketing approach to date has been more product driven ("Look, you can fly, and we'll let you do it, but you'll have to do it our way.") possibly sales driven ("C'mon, fly, and I won't bother you anymore."), but certainly not market driven ("Look what you can do if you fly!"). Cheers, Bob Hettinga ----------------- Robert Hettinga (rah@shipwright.com) "There is no difference between someone Shipwright Development Corporation who eats too little and sees Heaven and 44 Farquhar Street someone who drinks too much and sees Boston, MA 02331 USA snakes." -- Bertrand Russell (617) 323-7923