Liability, economic realities and self delusion in ecash developers. Or: Why not "just write ecash" (again).

[Ryan Lackey]

Quoting jamesd at echeque.com <jamesd at echeque.com>:
> On 23 Dec 2001, at 21:39, Black Unicorn wrote:
> > While this might not directly impact the person running or
> > developing the system it certain serves to discourage users
> > of the system after a single allegation has been made.
> > Customer flight would be awfully dramatic I suspect.
> 
> You are as usual full of shit.

I would say "overcautious", at worst.  Lawyers tend to be.
Entrepreneurs tend to be overoptimistic and risk-taking.  It seems to
balance out over time.  I think there are more "entrepreneurs" of
various legal and illegal forms in prison than lawyers.  But,
few innovations come from lawyers, either.

> If this was so, ever banking haven, e-gold, and the rest,
> would be out of business.

Banking havens have folded in the past 30 years.  No one provides
anonymous banking to joe random off the street anymore.  They may
provide certain levels of privacy, but with various levels of
protection against drugs, money laundering, etc.  Others may allow
things to slip through the cracks due to incompetence, but will
eventually shut.

A monolithic ecash system doesn't have the flexibility to allow
individual actors to change or fold without affecting the system; a
decentralized one does.  If you assume a monolithic system, a single
investigation could have some risk of shutting it down.

An ecash system is about providing a higher level of anonymity than
even the richest people in the world can have today, to every random
user connecting from home, in the normal course of operations.  And
continuing to transact business regardless of what happens.  This is
completely impossible for any kind of monolithic entity to do.

> You have remarkable confidence not only in the effectiveness
> of laws to deter those things they directly prohibit, but
> even those things that are sort of vaguely like those things
> they directly prohibit "Mr Happy Fun court will not be
> amused"

Prohibitions on anonymous financial transactions are not just some
minor law; they're not even a major law.  This is *the* regulatory
issue of the past 50-100 years.  (along with the supremacy of the
federal state).  It is bigger than the war on drugs, bigger than the
war on terrorism, etc.

An anonymous electronic cash system, in aggregate, is a direct threat
to the nation state.  That's why otherwise intelligent people have
spent nearly 20 years building systems which have this as a
pre-requisite, wasting millions of dollars in futile efforts to
develop/deploy, etc.

I still think the most likely result is that a system will be
distributed and not deployed, or deployed but not widely used, and
thus mainly ignored, but not for regulatory reasons, simply for trust,
software engineering, market, etc. reasons.  But I'd like to give it a shot.

-- 
Ryan Lackey [RL7618 RL5931-RIPE]	ryan at havenco.com
CTO and Co-founder, HavenCo Ltd.	+44 7970 633 277 
the free world just milliseconds away	http://www.havenco.com/
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