CDR: Re: Hard Shelled ISP?

[James A. Donald]

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At 10:38 PM 10/27/2000 -0400, R. A. Hettinga wrote:
 > So, to put it another way, when privacy is *cheaper*, on a risk
 > adjusted basis, than we'll have privacy, and not much until then.

Transactions on the internet need reputational enforcement.

Most of us cannot afford the cost and effort required to generate a widely 
known reputation.

So we rent the reputation of a widely known entity, usually Visa or Paypal.

If that entity is implementing chargebacks, implementing a dispute 
arbitration service, as Visa has long done, and Paypal now does, then it 
must know us, and know everything about us.  That entity, being large, is 
vulnerable to the state, and so what it knows, the state knows.

Anonymous transactions must be transactions that do not require, and are 
not charged for, an arbitration service applying chargebacks.  Such a 
service is inherently cheaper than the true name based service provided by 
Paypal and Visa.

Internet shopping and internet auctions such as Ebay tend to require an 
arbitration service and chargebacks.  However many regular Ebay sellers 
have established a good name, and could successfully operate, and would 
prefer to operate, with a system that does not provide for chargebacks.

Similarly micropayments do not need a facility for arbitration and 
chargebacks, and could not afford the cost of such a facility.

Any entity that facilitates transactions tends to be the deep pockets party 
that gets dragged into every quarrel, and thus is forced to implement a 
chargeback and arbitration policy regardless of whether it or its customers 
want such a service, regardless of whether they desire to pay for such a 
service.

An entity that provides truly anonymous transactions has the great strength 
that its no chargebacks policy is credible, that it cannot be dragged into 
the arbitration business against its desires and the desires of its customers.

     --digsig
          James A. Donald
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