The January, 2002 issue of Wired has an article on e-gold, the online payment system founded by retired oncologist Douglas Jackson. Much of the article discusses e-gold's misguided effort to link up with Islamic fundamentalists who want to overthrow capitalism. They are setting up a spinoff, e-dinar, for use in the Muslim world. This brilliant marketing tactic is not going too well even by the modest standards of what passes for success around the e-gold offices, especially since 9/11. Of course the cypherpunk interest in e-gold revolves around its vaunted privacy protection. The article provides a much-needed dose of reality to those who still harbor fantasies that e-gold is interested in protecting the privacy of its customers. Those who participated in the fractious debates between e-gold founders and its customers in the early days will remember the company's sniff of dismissal at "elite ivovy-tower" arguments in favor of its privacy. Alaskan attorney Daniel J. Boone in particular made a number of principled appeals to e-gold officials to hold to their early promises of privacy protection, to no avail. Here is what the article has to say about the use of e-gold by pyramid schemes (euphemistically caled HYIPs, high-yield investment programs):
For his part, Jackson vigorously denies HYIPs account for anything approaching a substantial portion of e-gold traffic. "These are piddly-ass little things," he says. "When you actually run one of these things down, they're pathetic." Still, he concedes, they're a PR liability, and he and his staff have been working hard to squeeze them out of the system. They've instituted "know your customer" rules to identify suspected swindlers, and they've cooperated amicably with law enforcement. When SEC staffers came to G&SR's offices last May to review the accounts of one of the biggest e-gold schemes ever - the self-styled "Christian-based humanitarian organization" E-Biz Ventures, shut down after allegedly inflicting losses of $8.5 million on investors - they were welcomed with coffee, bagels, and a conference room of their own. J. Chris Condren, the attorney charged with recovering E-Biz investors' money, has only good things to say about e-gold. "They've answered every question we've asked them, they've responded to every subpoena, every request for information."
Jackson is lying about the unimportance of HYIPs. Independent e-gold vendors estimate 30, 50 or as much as 90 percent of e-gold transactions go into pyramid scams, and the largest single holding in the system belongs to a shut-down Ponzi. But more importantly, we can plainly see the company's anti-privacy policies in action. Any business has a basic philosophy, implicit or explicit, and their actions reflect and reveal that philosophy. Jackson and e-gold only pay lip service to the goals of financial privacy. Their actions reveal their true feelings: that privacy just gets in the way of business success. It seems hard to believe that a currency which aims to attract libertarians and "gold bugs" would put customer privacy at such a low priority. And no doubt these policies account in part for the slow growth rate of the currency compared to successful ventures like PayPal. Nevertheless this should be a cautionary tale for any payment system which purports to offer privacy as a selling point. Criminals love privacy, they love anonymity. Remailer operators soon find that a substantial majority of the messages they send contain nothing but harrassment and threats. Few customers use anonymity services for positive purposes, to protect their privacy while engaging in legitimate activities. With most people, if they have nothing to hide, they don't hide it. Only paranoids and extremists will adopt anonymity technologies without nefarious purposes in mind. Anyone proposing to offer new services for privacy and anonymity should be prepared to deal with the onslaught of criminals who will use the system for bad ends.
On 19 Dec 2001, at 1:30, Nomen Nescio wrote:
Of course the cypherpunk interest in e-gold revolves around its vaunted privacy protection. The article provides a much-needed dose of reality to those who still harbor fantasies that e-gold is interested in protecting the privacy of its customers. Those who participated in the fractious debates between e-gold founders and its customers in the early days will remember the company's sniff of dismissal at "elite ivovy-tower" arguments in favor of its privacy. Alaskan attorney Daniel J. Boone in particular made a number of principled appeals to e-gold officials to hold to their early promises of privacy protection, to no avail.
Which illustrates why "cypherpunks write code". Promises to protect your privacy aren't worth much. particularly when the people who have the authority to enforce contracts are the ones trying to get your info in the first place. The only way to have good confidence that someone won't give out your personal info is if they don't have your info.
Jackson is lying about the unimportance of HYIPs. Independent e-gold vendors estimate 30, 50 or as much as 90 percent of e-gold transactions go into pyramid scams, and the largest single holding in the system belongs to a shut-down Ponzi.
I'd ask for a source, but I really don't care that much. Although would like to say that I suspect using "transactions" as a metric is itself probably misleading. It's like the dot bombs that would have a volume of twice the number of outstanding shares every day, yet 90% of the stock was never publically traded. You could say the average share traded twice a day, but that would be highly misleading. I'm not a real gold bug, really I'm not, but I could play one fairly convincingly if I wanted to. Gold bugs don't do a whole lot of transactions, they hold their gold. Commodities traders and gold bugs are very different animals, but if they wanted to appeal to commodities traders, they should've called it e-pork-bellies. If the idea was to appeal to suckers trying to get rich quick, maybe e-Hillary-Clinton-Cattle-futures.
Criminals love privacy, they love anonymity.
They love their own privacy, but hate other peoples'. A thief would be very disappointed if he had no way of knowing who was rich and who was poor. How would he know whom to profitably rob? A thief would love to know who had guns and who didn't. Then he'd know whom he could rob safely.
Remailer operators soon find that a substantial majority of the messages they send contain nothing but harrassment and threats.
No they don't; remailer operators never get a clue what "a substantial majority of the messages they send contain". Rather, the only time they'll be made aware of what message they carry contain is 1) if they're the last hop and 2) there's a complaint. Only a tiny minority of messages will have both apply.
Few customers use anonymity services for positive purposes, to protect their privacy while engaging in legitimate activities. With most people, if they have nothing to hide, they don't hide it.
Total and unmitigated bullshit. In fact, everyone who isn't an exhibitionist is hiding stuff most of the time, and most of them are performing a public service in doing so.
Only paranoids and extremists will adopt anonymity technologies without nefarious purposes in mind. Anyone proposing to offer new services for privacy and anonymity should be prepared to deal with the onslaught of criminals who will use the system for bad ends.
This is backwards. The reason that nobody insists, for example, that Blockbuster not sell lists of what moves they've checked out is not that they wouldn't care if this was done, but rather that it wouldn't occur to them that such a thing might happen in the first place. It is not true that only somone with a "nefarious purpose" in mind would want that list kept confidential; rather, only somone with a nefarious purpose would try to obtain such a list on someone else in the first place. George
At 01:30 AM 12/19/2001 +0100, Nomen Nescio wrote:
<snip>
Criminals love privacy, they love anonymity. Remailer operators soon find that a substantial majority of the messages they send contain nothing but harrassment and threats. Few customers use anonymity services for positive purposes, to protect their privacy while engaging in legitimate activities. With most people, if they have nothing to hide, they don't hide it. Only paranoids and extremists will adopt anonymity technologies without nefarious purposes in mind. Anyone proposing to offer new services for privacy and anonymity should be prepared to deal with the onslaught of criminals who will use the system for bad ends.
One would assume then that most governments are paranoids, extremists and criminals since the use of privacy/secrecy and even anonymity technologies are stock and trade in some of their agencies. steve
On Tuesday, December 18, 2001, at 06:02 PM, Steve Schear wrote:
At 01:30 AM 12/19/2001 +0100, Nomen Nescio wrote:
<snip>
Criminals love privacy, they love anonymity. Remailer operators soon find that a substantial majority of the messages they send contain nothing but harrassment and threats. Few customers use anonymity services for positive purposes, to protect their privacy while engaging in legitimate activities. With most people, if they have nothing to hide, they don't hide it. Only paranoids and extremists will adopt anonymity technologies without nefarious purposes in mind. Anyone proposing to offer new services for privacy and anonymity should be prepared to deal with the onslaught of criminals who will use the system for bad ends.
One would assume then that most governments are paranoids, extremists and criminals since the use of privacy/secrecy and even anonymity technologies are stock and trade in some of their agencies.
Yes, one would assume that. -- "Remember, half-measures can be very effective if all you deal with are half-wits."--Chris Klein
Criminals love privacy, they love anonymity. With most people, if they have nothing to hide, they don't hide it. Therefore the wearing of opaque clothing will now be prohibited - anyone wearing thick socks or covering their head will be severely beaten. Few customers use anonymity services for positive purposes, to protect their privacy while engaging in legitimate activities. From now on all business activities will be audited daily - have all your records ready and available for inspection by end of day, or your business will be shut down and you will be put in a dank, dark jail hole for an indefinite time. Only paranoids and extremists will adopt anonymity technologies without nefarious purposes in mind. And we do not tolerate dissenting opinions, remarks, jokes, or snide commentary - anyone caught criticizing or laughing at us will be taken to the soccer field and whipped with a wire cable. Anyone proposing to offer new services for privacy and anonymity should expect to be tortured, have their eyes cut out, and perhaps shot, depending on our mood. Have a nice day. Nomen Ministry for the Suppression of Vice and the Promotion of Virtue
On Tuesday, December 18, 2001, at 04:30 PM, Nomen Nescio wrote:
Criminals love privacy, they love anonymity. Remailer operators soon find that a substantial majority of the messages they send contain nothing but harrassment and threats.
Just how would the remailer operators find this out? Are you implying that Remops read the mail passing through their machines?
Few customers use anonymity services for positive purposes, to protect their privacy while engaging in legitimate activities.
How do you know?
With most people, if they have nothing to hide, they don't hide it.
Everyone has something to hide. Everyone.
Only paranoids and extremists will adopt anonymity technologies without nefarious purposes in mind. Anyone proposing to offer new services for privacy and anonymity should be prepared to deal with the onslaught of criminals who will use the system for bad ends.
If you mean by "Criminal" "One who breaks the law", well there are a lot of laws that have no legitimate purpose. If you mean by criminals "One who regularly commits immoral acts", then you are in much more trouble. -- "Remember, half-measures can be very effective if all you deal with are half-wits."--Chris Klein
participants (5)
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Blanc -
georgemw＠speakeasy.net -
Nomen Nescio -
Petro -
Steve Schear