Soon, I think (was Re: double-spending prevention w. spent coins)

Thu Apr 24 23:34:30 PDT 2003

Actually, I prefer a first-use model *with* something like "identity"
checking, kind of a belt-and-braces approach. When someone pops up
with a double-spent coin, the mint can say "nope, can't honor it,
here's the key that double spent it, though; have fun." 

OTOH, as a financial intermediary, the underwriter would make
absolutely *no* effort to keep track of who had what key, at all. The
whole process would rather tartly teach people *never* to take
offline transactions, and, more to the point, reject transactions
from a given double-spending key *if* that key ever comes around
again.

But, as I've noted before, all this haggling about amateur protocol
design is, frankly, a waste of time. Folks (meaning people who write
code) have *had* the protocols, for years now, at least three
protocols that most people would trust to use for unity-tested
transactions above, say, a quarter: Chaum, Brands, and Wagner, and,
on a prima facie basis, Wagner's unencumbered by patent, which makes
it first in line for experimental use.

And, as you noted, Bill, the trick is the business model, and that's
been figured out for at least 4 or 5 years as well :-). That is, plug
them into an accepted book-entry reserve-value/ transaction execution
- - -clearing -settlement system, like one of the digital gold currency
systems, or PayPal, or ATM/ACH, or a central securities depository
system on the back end, front-end a mint to the web and a decent
internet-level transaction-exchange protocol, and see what happens. 

Folks are fairly close to being able to do that now, from the way
*all* of those book-entry transaction systems have grown themselves
into the net over the past 5 years or so, *including* the central
securities depositories and clearinghouses. Even PayPal has loosened
up their end-user agreement within the last two months or so for what
looks like gold-currency exchange providers. Certainly John Muller,
their Corporate Counsel, is completely familiar with those internet
bearer transaction protocols and what they can do, so when someone
walks in the door there with something that is at least as secure as
their system is, it'll probably get a polite hearing. You can
certainly bet their management, much less their tech people, knows
about the financial cryptography and network security issues. 

As far as the digital gold currencies themselves are concerned,
people can pretty much do something now, with not too much of a push,
because at least two gold currency operators that I know of,
GoldMoney and e-Gold, have both actively encouraged people's efforts
to make that happen.

As Patrick McCuller (the other Patrick :-)) chugs along with the code
for Lucrative, it won't take too much to plug a Wagner mint into the
shopping-cart interface of an existing value-exchange system like
GoldMoney or e-Gold, which Patrick has already worked on doing, and
hang out one's underwriting shingle to see what happens. 

BTW, kudos to Lucky for volunteering a box for Patrick to test
Lucrative on so this can happen faster.

It's going to get interesting, folks, and pretty soon, I think. 

It'll be nice to see if the economics of all of this is going to
actually work, finally.

Cheers,
RAH

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-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'