Moving beyond "Reputation"--the Market View of Reality

[Adam Shostack]

On Sun, Dec 02, 2001 at 07:54:43PM -0500, R. A. Hettinga wrote:

| > | Just to sort of thrash things a bit, in a capital markets
| > | transaction, an exchange isn't such a hard thing to do, in the
| > | sense that a secondary bearer-form asset transaction (primary is
| > | like an IPO, or, for cash, a collateral asset conversion like an
| > | ATM
| > | transaction), cash for bond, say, would require the participation
| > | of the underwriters in the exchange protocol.
| > [...]
| > | At primary issuance, a trustee is involved, so, that probably
| > | supervises the Underwriter, who ever it is owns the underwriting
| > | engine. The above should hold for all kinds of unique, uncopyable
| > | things, teleoperated surgery, or opinions, for instance.
| >
| > A nym is none of these.
| 
| I'm not so sure. If you create a nym as a unique entity which has
| control of keys which control assets, the word "unique" points to
| bearer-instrument protocol of some kind. A stock-exchange seat comes
| to mind. You don't want to sell multiple copies of a key, for
| instance, at least for lots of interesting uses.

What is the unique entity seperate from its key?  You can't have a pen 
legally controlling your stock exchange seat, so how can a keypair?

You can use a keypair to show control (like a chop), but I'm unaware
of anywhere the instrument is considered to have control.

| 
| > | For "software", in the Gary Becker sense of something that can be
| > | copied, all we're really looking for is something which
| > | authenticates that a given copy of an information good is in fact
| > | signed by the person proported to be the "author" of that
| > | information/content/code. Coupled with a decent third-party
| > | time-signature mechanism, you're fine, because, after the first
| > | copy, such a good is a purely fungible commodity ala Hughes'
| > | "Institutional Piracy", or the Agoric guys' "digital silk road",
| > | or my "recursive geodesic auction" stuff. Such situations are
| > | classic examples of so-called "perfect competition", as found in
| > | physical graded-commodity markets everywhere.
| >
| > So here's the rub.  A nym (as I'm using the term) is control over a
| > private key thats associated with some reputation, which Alice is
| > trying to sell to Bob.  Alice can not provide direct assurance that
| > she won't keep copies of the thing she's selling.
| 
| Which means, you need a different protocol for selling them. I think
| you walked away too soon from the idea of a nym as a financial
| instrument, a contingent claim of some kind. Title to assets, at the
| very least, plus or minus "goodwill", for lack of a better word. I
| *think* it's part of the definition of a firm, in the Coasean sense
| of a collection of assets that are worth more together because they
| can transfer the value of those assets for more competitive advantage
| internally than the firm gets if those assets are sold into the
| market directly.

Nyms don't have assets.  People and legal fictions have assets.

| > Through intermediaries, Bob can buy some insurance that the
| > revocation  games Alice can play are limited.
| 
| See, you're talking about finance already :-). Insurance is a
| contingent claim on assets based on external events. Remember how
| they called program trading of various derivatives "portfolio
| insurance" once apon a market crash?

All men are Socrates.

I can buy insurance against the value of things without needing to
allow those things to own other things.  For example, I have this fine 
diamond ring, which is insured.  I have this fine .jpg of Bill and
Monica, which is not insurable, because it is copyable.  Neither my
diamond ring, nor my jpg, may own property.

| > How valuable that insurance is
| > depends on the trustworthiness of the intermediaries, how likely
| > the reliant parties are to properly check signatures, and the value
| > of social engineering in a field where process issues are not yet
| > well understood.  (See also
| > http://www.seifried.org/security/articles/20011023-devil-in-details.
| > html)
| 
| Say 'amen', somebody...
| 
| > There might be a relationship here to the sale of music bits; the
| > RIAA  is all worked up over issues of how do they sell the same
| > bits over and over.  If you can answer the question of "How to sell
| > a set of bits exactly once?" you may be able to answer the question
| > "How to ensure that I don't keep a copy of those bits?" or "How do
| > I sell a million people copies of the same bits without them
| > transferring them around."
| 
| First of all, I think that music shouldn't be copy controlled,
| because it's "software", in the pure Beckerian sense of something
| that can be copied, and, on the net it can be copied for almost
| nothing, something that probably makes Coase smile, somewhere, which
| was my point about commodity markets for information.

So, how does music differ from a key?  Its all bits, and those bits
are easier to create than musical bits.

| The part about selling something once is what Chaum did already with
| DigiCash. The mint keeps a copy of the first "note", and, if another
| one crosses the transom, the key of the counterfeiter is revealed.
| Anyone who takes the cash offline, without the participation of the
| underwriter, deserves what he gets if the cash is double-spent,
| right?
| 
| I think the apparatus for selling nyms is there already. Like I said
| before, all we need is an exchange protocol, something, like price
| discovery, has already been solved by lots of people (Micali has one,
| for instance, though I'm not sure how good it is because I'm not
| qualified to examine it), so we just have to find the best one.

And why can't we apply those to music?

Adam



-- 
"It is seldom that liberty of any kind is lost all at once."
					               -Hume