At 9:22 AM -0400 7/13/07, Patrick Chkoreff wrote:

Then you ask "wanna write some code for free?" -- implying that there is zero economic incentive to develop digital bearer cash.

Well, that does explain the lack of digital bearer cash even after 15 years of talk. As you so pithily imply, there is something wrong with the economics.

Indeed. Like the sign on Storrow Drive says, if we lived here, we'd be home now. I think, someday, soon, I hope, the peanut butter code will bump into the capital markets chocolate and someone will get rich, or we'll all be free, or Jesus will finally come, or we'll all fall into an orbiting obelisk with stars in it. Or whatever. That is, the world will change and digital bearer transaction settlement will replace digital book-entry transaction settlement in the same way that digital book-entry settlement replaced physical delivery of bearer certificates, beginning with the advent of telegraphy and culminating with database batch processing on IBM mainframes in the early 1970's. Right now, I know what *I* would do, but I can't -- or certainly don't -- code to make it happen. Having spent a modest amount -- okay, chump-change in the IT world -- of other people's money, and pretty much 15 years trying to put chickens before eggs, or horses before carts, or whatever, I haven't been able to do it, though I nurse various mostly forlorn hopes of actually making stuff happen somehow, someday. In the meantime, in theory, at least, my wife's retired, and she's closing, albeit on asymptotically Zenonian island-time, on a house with a beautiful view in Anguilla, and I won't have to shovel snow in the winter anymore, which'll be nice, though I'm not sure what I'm going to do with myself when I get there, except to try to plug away at this stuff some more. Meanwhile three-quarters of the western world seems to be legislating digital bearer transaction settlement out of existence before a market can even be proven, because one quarter of the total global population seems hell bent on destroying that self-same western world for fun, religion, or profit; same stuff, different decade, or atavistic fanatics, or whatever. On the other hand, technology causes law, not the other way around, so, if someone wrote code that would, say, :-), be three orders of magnitude cheaper in risk adjusted transaction costs than digital book-entry transaction settlement, then digital bearer transactions would become ubiquitous, and the world, law, government, etc., would just have to figure out how to extract its customary economic rent at tax time some other way. The paradox about the technology of digital bearer transaction settlement is that people who can code this kind of frankly non-trivial stuff for a living can get paid much more than I can offer (i.e. sweat equity, or famous-equity, or negative-equity, given the heh, previous returns on effort you so magnificently described), to do other, more valuable things, as priced in an almost certainly efficient global market for people's coding ability, particularly for crypto and security applications. So, in the end, whoever does this is going to have to either be rich, or crazy, and mortgage the wife and kids (like Charles Goodyear did, who got *nothing* for learning to vulcanizing rubber, the company "Goodyear" being named *for* him, you see, it wasn't *his* company...), or both crazy and rich, or get paid by either rich or crazy people to do so, for fun (political entertainment...) and/or profit. He's also gonna have to understand financial operations, and those folks are, for the most part, very specialized, and yet the lowest part of the capital-market food-chain. The fact that digital bearer settlement *might* make someone with the right combination of skills (financial operations and financial cryptography, plus, of course, actual finance, once the operating bit all works :-)) -- *might*, asymptotically -- really freaking rich doing this is no incentive to a guy who makes two-standard deviations below the mean on his investment bank's total compensation list. Actual financial cryptographers themselves are usually academics who want to punish evil capitalists, or Republicans, :-), for leveraging book-entry settlement into database marketing. And potential financial cryptography engineers who have the chops to write the required code tend to be anarcho-capitalist types who want to free us all from the state. Meanwhile, the financial operations guys, having actual day jobs and mortgages and college tuitions to pay, don't play in either of the above ideological spaces except maybe on weekends, and only as amateurs. So, as far as the old Venn diagram goes, then, there's currently an air-gap between three or four different circles. If we lived here, we'd be home now. Frankly, though I really should do so, considering the increasingly guilt-ridden circumstances under which it came to pass -- her money, not mine, and all that -- I don't *have* to work on something else to earn my own keep, but I know pretty much what *I* want a digital bearer transaction settlement system to do, so, if I could write the code, I would. But learning to write what I want seems to exceed my grasp for a number of mundane reasons, not the least of which is that it's really freaking boring for me to do, :-), and I have the attention span of a gnat, which is continually seized by the next new thing. As Patches Kennedy said about another brain "disease" when he ran into a capital hill bollard going "to vote" after last call for alcohol one D.C. morning, "it's disease I live with, every day". :-/. In the meantime, I feel a moral, not to mention actual financial, obligation, to see all this through, somehow, so I'm still here, like Neal Stephenson's guy in the Meiji-era Tokyo fire-insurance company, standing on the corner of the property line, hoping my guys on the pumper and hose crew get the fire out before I burn up with the customer's house. My chances of finding other people to stand on that corner to help hold up the flag are almost certainly non-existent at this point, and raising money to pay for more pumper-and-hose crew seems to be even more out of the question, so I'm probably here for the duration. Hope someone's got good barbeque sauce when it's all over. In my case, "long pork" describes my physique quite well... ;-). Cheers, RAH -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'