Re: Digicash Patents
Okay, so I called my source up, and we chatted a bit Long story short, Infospace, the company that up until now had Chaum's original blind signature patents, sold them, in a bundle of other stuff, to First Data, in a reorganization. First Data is the largest credit-card processor in the US, among other things, but they bought the original Digicash patents as a way to get at an authentication technology they were paying Infospace to use already, and a business that Infospace, in the middle of its own litigation circus, wanted out of, offering it to its two biggest customers, First Data and American Express. First Data bought it, apparently, as the people in Seattle, who used to work eCash Technologies -- and then Infospace -- are supposedly getting their checks from First Data now. Since lots of the important bits are supposed to expire next year, the patents may or may not be useful. On the other hand, if they can be gotten clear, someone could get a running start, I suppose, especially if they made a partnership deal with First Data of some kind, and, if First Data was active in that partnership, leveraging their other connections in the funds-transfer business, that could be interesting. On the other other hand, :-), it's entirely clear that people could be developing code right now in anticipation of the patent expiration and go live with some kind of land rush when it's possible to do so. Plug a mint into an account at GoldMoney, or e-Gold, or even PayPal, if they partner with *them* -- and see what happens... 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'
On Thursday, July 31, 2003, at 10:44 AM, R. A. Hettinga wrote:
Since lots of the important bits are supposed to expire next year, the patents may or may not be useful.
On the other hand, if they can be gotten clear, someone could get a running start, I suppose, especially if they made a partnership deal with First Data of some kind, and, if First Data was active in that partnership, leveraging their other connections in the funds-transfer business, that could be interesting.
On the other other hand, :-), it's entirely clear that people could be developing code right now in anticipation of the patent expiration and go live with some kind of land rush when it's possible to do so.
Some people expected a "land rush" when the main RSA patents expired several years ago. Parties were even thrown. The land rush never happened. --Tim May "The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant." --John Stuart Mill
On the other other hand, :-), it's entirely clear that people could be developing code right now in anticipation of the patent expiration and go live with some kind of land rush when it's possible to do so.
Some people expected a "land rush" when the main RSA patents expired several years ago. Parties were even thrown. The land rush never happened.
--Tim May
True, but look at bitpass.com. $1.5 million in capital for a micropayments system with no innovations that amounts to... a stunted version of Paypal? The beauty of a marketplace is that many different parties get to try every which way of satisfying a need. Most will fail. Even the first several attempts can fail, disguising a real opportunity as a guaranteed failure. Patrick lucrative.thirdhost.com
Tim replied to Bob -
On the other other hand, :-), it's entirely clear that people could be developing code right now in anticipation of the patent expiration and go live with some kind of land rush when it's possible to do so.
Some people expected a "land rush" when the main RSA patents expired several years ago. Parties were even thrown. The land rush never happened.
Hey, the parties were pretty good, and RSA gave out T-shirts :-) In practice, everybody who really needed to use RSA had either licensed the technology for a reasonable (or too high) price, or else was a free software developer violating the patents, or else was a free or low-key software developer living within RSAREF. At 01:18 PM 07/31/2003 -0600, Patrick lucrative.thirdhost.com wrote:
The beauty of a marketplace is that many different parties get to try every which way of satisfying a need. Most will fail. Even the first several attempts can fail, disguising a real opportunity as a guaranteed failure.
The Mark Twain Bank people had licensed Chaum's patents, and their failure had a lot less to do with the cost of licensing the patent than with their inability to figure out how to get customers and merchants, and their ability to make it too difficult to get an account. Mondex wasn't Chaumian, and it failed, along with a number of other vaguely cash-like payment systems during the boom. (I'm referring to the payment systems that handled actual money, not just the silly Green-stamp emulators like Beenz and Flooz.) By contrast, the Austin Cypherpunks Credit Union project figured out that making money would be hard before starting a business, as well as discovering that dealing with Chaum was also hard, so they didn't get far enough to fail. Eric Hughes had some good insights into why "it's really hard to start a new payment system". I supposed I'd categorize the efforts into two basic groups - projects run by banks or bank-like companies that wanted to actually run a service and hoped to make a profit - startups funded by VC money that wanted to make startup money, which depends on VCs and IPOs and Other People's Money, and is only marginally related to actually making a profit, though most of them also hoped they'd wildly succeed like other dotcoms. There may have been a few other types of projects, but this was most of them.
On Thursday, July 31, 2003, at 12:18 PM, Patrick wrote:
On the other other hand, :-), it's entirely clear that people could be developing code right now in anticipation of the patent expiration and go live with some kind of land rush when it's possible to do so.
Some people expected a "land rush" when the main RSA patents expired several years ago. Parties were even thrown. The land rush never happened.
--Tim May
True, but look at bitpass.com. $1.5 million in capital for a micropayments system with no innovations that amounts to... a stunted version of Paypal?
PayPal apparently met the needs of its customers, which was for a low-tech, low-security, no anonymity online payment system. While I'm not saying I predicted it, neither is it surprising that something like it succeeded. (Members of this very list had some discussions with the guy who started PayPal...I wasn't in on this, but I gather that he used some of the ideas, but not the high security/untraceability ideas...just the online payment low-hanging fruit part. The same is true of EBay, by the way, where some of our crowd developed an online system very much like what E-Bay became, but several years _after_ the AMiX system. C'est la vie.) In any case, there will be many successes and failures in Internet-related business. This list is about certain kinds of these systems, but not really about "online payments" in their general form. I'm not saying folks can't or shouldn't talk about Mondex or PayPal or FastTrack, just that they have little to do with the obvious themes of the group.
The beauty of a marketplace is that many different parties get to try every which way of satisfying a need. Most will fail. Even the first several attempts can fail, disguising a real opportunity as a guaranteed failure.
Software patents and the difficulty of "metering" usage has made this kind of experimentation, this kind of evolutionary learning, much harder to do. For example, when Intel sold the 4004 microprocessor 30 years ago, it owned a bunch of patents and trade secrets about how the chip was made, what it's design was, etc. But it didn't force potential customers to lay out their business plans, to sign "no compete" clauses, and it did not have to devise complex ways of knowing how many chips a customer was using. The chips metered themselves, metered the patents and other IP, and Intel could sell them to guys in garage shops, companies in Boise and Peoria, and even to distributors to resell and resell. Such is not the case with, say, the Digicash software. Since Chaum, then the Canadians, then the Indians, then First Data, etc., wanted to maximize the payoff and "get a piece of the action," they could not simply sell the technology, even bits of it, to guys in garages and people with bizarre and untested ideas. And such software is usually not sold to unidentifiable customers. Digicash (or its descendants) will not sell one copy of its core technology to a company without draconian safeguards and audits. This is part of why a paper trail back to the users of various technologies exist when above-board licensing is used. (And why many of us would obviously then favor simply _taking_ the technology, ripping it off. This cuts the paper and liability trail. Yes, there are minor issues with "theft of intellectual property," but this is mostly smoke and mirrors anyway. No one in the Western world seems to think ideas in general are patentable, so how did RSA get patented? We've had this discussion many times over the past 11 years. And more.) This is replicated all over the digital landscape, where software packages have complicated licensing schemes and where vendors want to see only "staid and conservative" business plans. No Digicash for BlackNet, in other words. This whole phenomenon has dramatically slowed down exploratory developement and weird, new ideas. A couple of guys in a tilt-up in Silicon Valley simply cannot just go down to Fry's to buy some parts and try out some ideas, not in this world of licenses, audits, lawyers, and generally pointless efforts to meter usage. Which is why doing things without benefit of any patent licenses is the best strategy. That this also requires no nexus, no trail back to a corporate office, is of course part of why it's the best strategy. --Tim May
At 11:34 AM -0700 7/31/03, Tim May wrote:
Some people expected a "land rush" when the main RSA patents expired several years ago. Parties were even thrown. The land rush never happened.
True enough. Of course, there wasn't much land to rush after, it seems, between the minuscule and easily oligopolized market for digital authentication ("signature" is a bogus word, for various reasons, along with "certificate" -- except in the case of bearer ones :-)) and the stone-dead market for any other financial cryptography besides rudimentary encryption for book-entry settlement was merely the icing on the cake. If, however, after much experimental trial and error, internet bearer transaction costs turn out to be low enough, that might be something to rush after. Remember that the Wrights couldn't sell airplanes worth a damn until Curtiss started infringing their patents and selling them to actual people, instead of governments the way the Wrights wanted to. That was certainly Chaum's mistake, the mistake of all monopolists, these days, to want to create a cartel the same way that Nobel did with Dynamite, a single user of blind signature technology for each country or currency. Like the Wrights and Curtiss, the problem with blind signatures is one of a giant dog in the manger in the form of whoever the current greater fool owning the patent portfolio at the moment. Curtiss had an easier time of it in pre-16th-Amendment America, of course. With government so weak, he just kept selling airplanes like proverbial hotcakes, until, champerty being what it is, he was rich enough to sue, the Wrights won in court, and then demanded that Curtiss buy them out, since they obviously couldn't sell airplanes anyway... In the case of blind signatures, though, you need to plug an underwriting engine into a bank account, at least for the first generation, and banks, like corporations, are creatures of the state. Not to mention "the law is your enforcement" characteristics of the modern book-entry payment system, where the financial industry has completely abdicated the integrity of their transaction processes to a perfectly willing nation-state, who, in turn, uses those transaction trails to extort more wealth from their citizenry. You can't have had the growth of the modern nation state without book-entry taxation, like those on individual and corporate income, capital gains, property transactions, and so on. So, being in business for an underwriter means having the rights to any patents -- if there are any. Since there was no money to invest in such a business at the height of the boom, much less these days, and any underwriter now would have to bootstrap from practically nothing, even miniscule up-front patent royalties, much less the treat of patent litigation against the reserve account, would suck the oxygen out of the room and kill such a business before it even started. And, no, Virginia, pizzling on as people here are wont to do about how bearer transactions' *only* markets are illegal ones won't wash. If they can't be done at least a few orders of magnitude cheaper than book entry transactions, they'll be about as ubiquitous as dirigibles are in modern aviation -- and just as obvious and indefensible from physical attack whenever *any* state-based transaction authority decides the party's over. Besides as any Kazaa user now knows, on the modern internet, everything's illegal everywhere all the time, right? Waiting around for some anarchic "rapture" to come along to fry the "useless eaters" and fix that logical contradiction is as much a waste of time waiting for the biblical one would be. So, go cheap, or go home, folks. Go so cheap that, like all other really useful technology, the use of blind signatures and other internet bearer financial cryptography is orthogonal to morality. That nobody *cares* if they're used for illegal activities, just like nobody *cares* if whores take MasterCard -- or, to use an earlier analogy about automobiles and crime, pimps ride around in Caddies. Finally, of course, this cost reduction is something we still haven't proven, but, hopefully, we'll prove soon enough, or most of us who are left wouldn't still be trying to work on this. That's what I mean by "land rush". Besides, we don't even know what we're rushing towards. Hell, Oklahoma wasn't much use for farming, anyway. It was oil that made the place, right? :-). 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'
Tim wrote:
Some people expected a "land rush" when the main RSA patents expired several years ago. Parties were even thrown. The land rush never happened.
Just a reminder that there will be a Blind Signature Patent Expiry party at my place the Saturday before the blind signature patent expires. (The patent expires on a Tuesday. I called dibs on that party years ago). --Lucky
participants (5)
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Bill Stewart -
Lucky Green -
Patrick -
R. A. Hettinga -
Tim May