Timothy C. May writes:

If I understand your usage of "anonym" correctly, I think you are clearly wrong.

I think you understand my usage (anonym = untraceable pseudonym). But I still disagree with you. I brought this subject up a couple of weeks ago (as the "inheritance problem"), but was unable to really participate in the discussion as things got a little busy. A quick note on terminology: I'll use "name" to mean a symbol which may be easily traced to a physical entity, "pseudonym" to mean a symbol which is traceable only under certain conditions, and "anonym" to mean a symbol which is not traceable.

The "linking with a unique person" is not especially important, IMO.

The reputation of an anonym is fundamentally different from that of a name or pseudonym. When a named or pseudonymous entity fails to perform a contract, the pseudonym is exposed (becoming a name), and the reputations of all names associated with the entity suffer. Further, creating a new name doesn't help, as it gets the reputation of the other names. There are basically two kinds of pseudonyms that I can see: I'll call them escrowed identities and encrypted identities. With an escrowed identity, an escrow agent knows who I am and part of our contract says they're permitted to reveal the name under enumerated circumstances. An encrypted identity is one which is revealed by the act of violating the contract - like the double-spending protections in e-cash - and the KCA merely certifies that the tokens were created correctly. Escrowed identities are vulnerable to "rubber-hose cryptanalysis" and other forms of social engineering, but there are many sorts of transactions which don't permit encrypted identities for technical reasons. In both circumstances, an involved KCA may attest to more than the traceability of the identity. The KCA may also certify that, at the time of certification, the identity's reputation was "clean" with respect to some standard. Note that the KCA knows a *name* for the entity, and thus imbues the newly created pseudonym with the reputation of the name. The entity still hasn't escaped a poor reputation with a new pseudonym (if the KCA's reputation is trustworthy, that is). In effect, names are two-way links between reputations and entities, pseudonyms are one-way links from reputations to entities, and anonyms are broken links between them. Reputation credit will flow from a name to its entity, and then flow back out to all the entity's other names. Reputation debit will flow from a name *or pseudonym* to the entity and then back to all the other names (but not pseudonyms). Anonyms don't transmit their reputation to anything. The upper limit of credit worthiness in an anonym lies in the cost of replacing it. If I can create a new reputation for $1000, and you've loaned me $1500, then I can abandon the old one at a profit of $500. Clearly you can't extend me more credit than it will cost me to create a new anonym. Given the dearth of anonymity (or even pseudonymity) today, it seems that the average entity doesn't value anonymity particularly highly. How many people do you know that use credit cards for virtually *everything*, simply because they value the convenience of a single monthly statement and the security of not carrying cash more than they value anonymity? I know several. This implies that the cost of creating an anonym must be fairly low if they are to become commonplace, which further implies that the credit worthiness of anonyms must be correspondingly low. The next question is whether a low-cost anonym can ever expect to be considered an "expensive" (and therefore credit worthy) anonym. Let's consider anonyms like Pr0duct Cypher and Black Unicorn, since you always bring them up as examples of anonyms with reputation. Certainly the entities behind these anonyms have a certain amount of time and energy invested in them. They *do* have a reputation, but it's a reputation regarding the quality of their products. If you were to advance one of them $500 in consideration for writing some software, and they took the money and didn't produce the software, how would that hurt them? Certainly they wouldn't be likely to get another such contract --- it would be cash on the barrelhead from there on out, just like any cheap anonym. Their reputation for quality information and freeware wouldn't change a bit. There's clearly a large risk involved in loaning money to an anonym with no reputation for paying back loans. Only completed contracts with named entities improve the anonym's reputation. Contracts with other anonyms or pseudonyms are unreliable indicators --- otherwise I could create a hundred anonyms (or encrypted-identity pseudonyms) and have ninety-nine of them report successful transactions to create an artificial reputation. Multiple contracts with the same named entity are also unreliable --- I can falsely report successful transactions with my own anonyms, too. A small number of named entities may even act in collusion to create an artificial reputation. The credit reputation of the anonym is thus reliable only in proportion to the number of named entities with which it successfully transacts. Furthermore, a transaction with a traceable entity is implicitly secured by the other assets of the entity, so the amount risked in a loan is not the entire amount of the loan. There's no reason for an anonymous entity to hold any assets --- anything they need may simply be held by another entity, and thus protected from seizure. The amount risked in a loan to an anonymous entity is the full amount of the loan, so the credit limits for an anonym will grow *much* more slowly than for traceable entities. Assuming the existence of a reputable escrow agent for pseudonyms, the cost to establish a given credit rating for a pseudonym is *much* less than that for an anonym while the risk of undesirable disclosure is only slightly more. If the anonym is sought only for privacy, then a pseudonym is a much better buy. It's when the cost of disclosure is very high that the anonym becomes desirable. So what sort of entity has so much to lose by disclosure that it's unwilling to accept the risk involved with a pseudonym escrowed with a reputable agent? (Remembering that we're talking about a world that's sufficiently changed as to permit anonyms at all --- something I don't think can happen in America today, for instance.) Would you want to do business with them?