ecash, cut & choose and private credentials

[Trotter, Frank]

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Adam Back wrote:
> I think the thing that killed MT / digicash for this application
> was MT at the time was reported to be closing accounts related to
> pornography -- they apparently didn't want the reputation for
> providing payment mechanisms for the porn industry or something.

James Donald replied:
> Payee traceability made it possible to close accounts related to
> pornography.   Ecash is not truly cash like if the issuer can
> prevent it from being used by tax evaders, child pornographers,
> money launderers and terrorists.

Hettinga replied:
> Payee traceability had nothing to do with it.  Every customer of
> MTB, whether an end user or a merchant, had to fully identify
> himself to the bank, including SSN and for merchants, type of
> business, etc.  This is SOP for other payment systems like
> credit cards.
>
> It was on this basis that MTB was able to screen their
> merchants.  No payee tracing was necessary.  A fully untraceable
> cash system would have been equally amenable to merchant
> screening.  Any vendor has the right to control whom it does
> business with, and MTB chose to exercise its discretion in
> this way.
>
> The Texas couple in the news recently made a different
> choice and decided to provide payment services for child
> pornographers, as James Donald recommends.  Now MTB is still
> in business (after merging with MTL and then FSR) and the
> Texans are in jail.  Which made a better choice?

There are a host of issues that prevented the widespread use of
eCash(tm), or perhaps better phrased didn't properly incent the
widespread use of eCash in the mid-1990's.  Certainly a number of the
decisions I made contributed, but I don't believe that the merchant
criteria was even a blip despite the firestorm the action created
within a narrow community - see
http://www.shipwright.com/rants/rant_12.html for a contemporaneous
and at the time much appreciated commentary from you-know-who.

Ultimately any "value transfer system" must be broadly accepted
across personal, business and institutional entities (yes I think the
latter two are different) - today all of these can interchangeably
use cash, checks, ach or wires for example.  The combination of
credit quality, trust, and lowest transaction costs must all be
present for something to replace our current mediums.

When value is involved wealth-owners tend to focus first on the trust
and credit issues - if your wealth disappears then it just doesn't
matter what the transaction costs are.  Some recent discussions on or
near this list of perceived issues with PayPal and e-gold point out
that the trust factor includes all participants agreeing on the rules
of engagement.

To achieve the primary trust and credit goals of wealth owners and
within the constructs that are available to us today this seems to
mean that regulated financial institutions may need to be involved,
but the form and content are yet to be determined.

FOT

Personal comments only.
========================
Frank O. Trotter, III
President - everbank.com

Spank your banker and come on over to
http://www.everbank.com

everbank is a Division of Wilmington
Savings Fund Society, FSB

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-- 
-----------------
R. A. Hettinga <mailto: rah at 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'