Pricing Mojo, Integrating PGP, TAZ, and D.C. Cypherpunks

[Anonymous]

Some thoughts on digital cash.

First, using anonymous cash to purchase physical goods online means giving
up much of the benefit from the anonymity.  If you have to give a delivery
address, they obviously know who you are.  It's still slightly better
than using your Visa card because only the seller learns your address
rather than a centralized agency that knows all of your purchases.
But it's hardly worth it.

Second, using digital cash for purchases in the real world (grocery stores
etc) is pretty much impossible today and relatively pointless anyway since
physical cash exists.  There might be some slight advantages in terms of
not having to carry cash, resistance to theft, etc., but from the privacy
perspective, things are about as good as they are going to get in the
physical world.  It's only going to go downhill from here.  It may not
be as bad as Scott "Get Over It" McNealy claims but realistically the use
of surveillance cameras and face recognition systems is going to increase.

Third, this leaves the use of digital cash to purchase information goods
and services online.  The problem is, few companies have succeeded so far
in selling information goods online, and the problems have nothing to do
with the payment system or privacy issues.  With self-contained products
like music and software, piracy is rampant.  There are some service
businesses which are producing and selling information successfully,
but usually they are in the B2B market where privacy is less of an issue.

Fourth, the significant exception is of course pornography, and
we've had debates about whether it would make sense to create a
privacy-protecting electronic payment system that catered to the porn
market.  It's profitable, it's information, and there are significant
privacy considerations for some customers.

Unfortunately the greatest sensitivity to privacy comes with illegal
products like child pornography.  And the Reedy case has to be a
significant cautionary tale.  Thomas Reedy was proprietor of an age
verification service which had a couple of overseas child pornographers
among its customers; he ended up with life imprisonment for what was
essentially a payment collection service.  Any digital cash system
for the porn market would therefore have to screen its clients (the
sellers) very closely.  It's the buyers to whom you are selling privacy,
not the sellers, so this is not inconsistent with the business model.
But it could be expensive.  And by eliminating illegal porn you would
be turning away much of your potential business, leading to a constant
temptation to cross the line as Reedy did.

Can we identify other markets, other applications where cash or cash-like
technology can be useful?  MojoNation is a good example.  Their mojo is
intended to be a cash substitute to optimize load balancing and data
distribution.  Unfortunately the MN network lacks compelling content
and the economy is still crude.  But the idea is sound; P2P networks
which reward providers of information should flourish.  The slashdot
quota system is another example.  Also, various "warez" sites work on
an exchange basis, where people get credit for uploading files which
gives them authorization to download.

Imagine if all these systems could be served by a single virtual currency,
where resources and work donated in one forum earned points which would
entitle you to privileges in another.  Eric Hughes proposed something
similar back in the days of the text-based MUD and MOO online games, so
that you could transfer quota from one system to another.  Or consider the
example recently where several people expressed interest in having someone
go back to the early cypherpunk archives and select interesting threads.
What if each of us had some virtual cash we could transfer to whomever
did the work.

The point is that there is a possibility today for an online market in
informal, peer to peer style information services.  There is work to be
done, services to provide which remain entirely in the virtual world.
If you could be rewarded for work you do online with "cash" that would
allow you to request similar services from others, the monetary system
can get off the ground.  This might be a more promising start for a
virtual currency than attempts to tie it immediately to dollars.