Digicash Patents

Bill Stewart bill.stewart at pobox.com
Thu Jul 31 16:08:42 PDT 2003

Tim replied to Bob -
> > > On the other other hand, :-), it's entirely clear that people could be
> > > developing code right now in anticipation of the patent expiration and
> > > go live with some kind of land rush when it's possible to do so.
> >
> > Some people expected a "land rush" when the main RSA patents expired
> > several years ago. Parties were even thrown. The land rush never happened.

Hey, the parties were pretty good, and RSA gave out T-shirts :-)
In practice, everybody who really needed to use RSA had
either licensed the technology for a reasonable (or too high) price,
or else was a free software developer violating the patents,
or else was a free or low-key software developer living within RSAREF.

At 01:18 PM 07/31/2003 -0600, Patrick lucrative.thirdhost.com wrote:
>The beauty of a marketplace is that many different parties get
>to try every which way of satisfying a need. Most will fail.
>Even the first several attempts can fail,
>disguising a real opportunity as a guaranteed failure.

The Mark Twain Bank people had licensed Chaum's patents,
and their failure had a lot less to do with the cost of licensing
the patent than with their inability to figure out how to
get customers and merchants, and their ability to make it
too difficult to get an account.
Mondex wasn't Chaumian, and it failed, along with a number of
other vaguely cash-like payment systems during the boom.
(I'm referring to the payment systems that handled actual money,
not just the silly Green-stamp emulators like Beenz and Flooz.)

By contrast, the Austin Cypherpunks Credit Union project
figured out that making money would be hard before starting a business,
as well as discovering that dealing with Chaum was also hard,
so they didn't get far enough to fail.
Eric Hughes had some good insights into why
"it's really hard to start a new payment system".

I supposed I'd categorize the efforts into two basic groups
- projects run by banks or bank-like companies that
wanted to actually run a service and hoped to make a profit
- startups funded by VC money that wanted to make startup money,
which depends on VCs and IPOs and Other People's Money,
and is only marginally related to actually making a profit,
though most of them also hoped they'd wildly succeed like other dotcoms.
There may have been a few other types of projects,
but this was most of them.

More information about the cypherpunks-legacy mailing list