CDR: The Market for Privacy

[Tim May]

At 11:41 AM -0500 11/1/00, Declan McCullagh wrote:
>http://www.wired.com/news/business/0,1367,39895,00.html
>
>    Privacy Firm Tries New Gambit
>    by Declan McCullagh (declan at wired.com)
>    2:00 a.m. Nov. 1, 2000 PST
>
>    WASHINGTON -- Zero Knowledge Systems seems to have finally realized a
>    harsh truth: Internet users don't like to pay extra to protect their
>    privacy.

This is a recurring theme, and one we've talked about many times.

Fact is, most people don't think they need security. Most people 
don't even think they need backups. Until their hard disk crashes. 
And so on. It's a tough sell in either case.

This is why the market for crypto and security and anonymity has 
tended to be at the "margins" of society: porn, warez, freedom 
fighting, etc. Such has it always been, such shall it always be. 
Targetting the mainstream is a tough sell.

(The most widely-deployed bits of crypto are in places where huge 
deals were cut with browser makers, e.g., SSL, Verisign, etc. The 
customer is only vaguely aware that such things are happening. No 
sale to Joe Average is needed. Probably this is the way Web proxies 
will ultimately be sold.)

ZKS was just one of many companies attempting to sell privacy tools 
to "Joe Average," and his little daughter Suzy Average (pictured in 
ZKS Freedom ads...). Well, Joe doesn't do much with his home computer 
except check some sites and maybe download a few porn images from 
Danni's Hotbox when Suzy has gone to bed and the wife is passed out 
on the sofa.

_Could_ ZKS Freedom help Joe a little? Maybe, but it's not something 
even on his radar screen to worry about. His bigger concern is having 
Suzy or the wifey find the paltry pieces of porn he purloined.

Or he's at work and his boss has just announced that several 
employees have been fired for using the company's networks for 
checking sports scores, downloading porn, usng Napster, etc.

These are Joe Average's _real_ concerns about privacy. Cute ads about 
little girls needing their privacy probably won't sell ZKS Freedom to 
Joe Average.

ZKS may do better by bundling Freedom with Danni's Hard Drive 
accounts! "Your porn is downloaded to you in "Plain Brown Wrapper" 
format, disguised to look like a marketing report containing the key 
words you specify. Your boss will think it's business, your wife will 
be bored."

(No, I'm not suggesting this as any kind of real product. The market 
is just too small, and downloading porn or Napster songs at work is a 
lose for many good reasons. The proper solution is even more 
straightforward: only fools download porn at company sites, and they 
deserve to be fired. And if Joe Average doesn't have his own 
_personal_ computer at home, they're cheap enough. No reason Little 
Suzy should be doing her homework on the machine he has his porn on. 
And even if he does, encrypted partitions are trivial to set up. 
Plus, removable CD-RWs and Zips. "Zip--for when you don't want your 
porn discovered by your wife!")

The second major use for privacy tools is preventing the "dossier 
society" effect, where one's words in alt.sex.gerbils are archived 
for all time and are seen by prospective employers, Senate 
confirmation panels, etc. This is a likely market for ZKS Freedom. 
Ah, except that utterly free and easy to use services like MyDeja and 
MyYahoo and suchlike are dominant in this application area ("space"). 
It is routine to see "aardvaark42 at mydeja.com" posts in nearly all 
newsgroups. While these are not cryptographically robust, it's 
unlikely these will ever be linked to true names. Especially as they 
may be set up on the fly, through proxies, etc.

Still, some fraction of people will pay for Freedom-type nyms. 
Probably not $50 a year, as that is a significant fraction of their 
entire ISP bill. But not a lot of people. And they won't pay much.

The real market for robust security and privacy tools is, as always, elsewhere.

The _interesting_ market has always been for those who 
are--demonstrably!--willing to pay big bucks to get on a plane to fly 
to the Cayman Islands or Luxembourg to open an offshore account. For 
those who are actively interested in untraceable VISA cards. For 
those selling arms. For those trafficking in illegal thoughts.

In short, for crypto anarchy.

Not for fluff.

Will the new ZKS business model work? Maybe. But as Simson Garfinkel 
points out in the  article Declan wrote, this may take years to 
develop. Until then, tough sledding.

MojoNation seems to be a lower burn-rate run at the real low hanging fruit.


--Tim May

-- 
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   831-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
"Cyphernomicon"             | black markets, collapse of governments.