Digicash Patents

[R. A. Hettinga]

At 11:34 AM -0700 7/31/03, Tim May wrote:
>Some people expected a "land rush" when the main RSA patents expired 
>several years ago. Parties were even thrown. The land rush never 
>happened.

True enough.

Of course, there wasn't much land to rush after, it seems, between the minuscule  and easily oligopolized market for digital authentication ("signature" is a bogus word, for various reasons, along with "certificate" -- except in the case of bearer ones :-)) and the stone-dead market for any other financial cryptography besides rudimentary encryption for book-entry settlement was merely the icing on the cake.


If, however, after much experimental trial and error, internet bearer transaction costs turn out to be low enough, that might be something to rush after.
 

Remember that the Wrights couldn't sell airplanes worth a damn until Curtiss started infringing their patents and selling them to actual people, instead of governments the way the Wrights wanted to. That was certainly Chaum's mistake, the mistake of all monopolists, these days, to want to create a cartel the same way that Nobel did with Dynamite, a single user of blind signature technology for each country or currency.


Like the Wrights and Curtiss, the problem with blind signatures is one of a giant dog in the manger in the form of whoever the current greater fool owning the patent portfolio at the moment. Curtiss had an easier time of it in pre-16th-Amendment America, of course. With government so weak, he just kept selling airplanes like proverbial hotcakes, until, champerty being what it is, he was rich enough to sue, the Wrights won in court, and then demanded that Curtiss buy them out, since they obviously couldn't sell airplanes anyway...
 

In the case of blind signatures, though, you need to plug an underwriting engine into a bank account, at least for the first generation, and banks, like corporations, are creatures of the state. Not to mention "the law is your enforcement" characteristics of the modern book-entry payment system, where the financial industry has completely abdicated the integrity of their transaction processes to a perfectly willing nation-state, who, in turn, uses those transaction trails to extort more wealth from their citizenry. You can't have had the growth of the modern nation state without book-entry taxation, like those on individual and corporate income, capital gains, property transactions, and so on.
 

So, being in business for an underwriter means having the rights to any patents -- if there are any. Since there was no money to invest in such a business at the height of the boom, much less these days, and any underwriter now would have to bootstrap from practically nothing, even miniscule up-front patent royalties, much less the treat of patent litigation against the reserve account, would suck the oxygen out of the room and kill such a business before it even started.


And, no, Virginia, pizzling on as people here are wont to do about how bearer transactions' *only* markets are illegal ones won't wash. If they can't be done at least a few orders of magnitude cheaper than book entry transactions, they'll be about as ubiquitous as dirigibles are in modern aviation -- and just as obvious and indefensible from physical attack whenever *any* state-based transaction authority decides the party's over. 

Besides as any Kazaa user now knows, on the modern internet, everything's illegal everywhere all the time, right? Waiting around for some anarchic "rapture" to come along to fry the "useless eaters" and fix that logical contradiction is as much a waste of time waiting for the biblical one would be.


So, go cheap, or go home, folks. Go so cheap that, like all other really useful technology, the use of blind signatures and other internet bearer financial cryptography is orthogonal to morality. That nobody *cares* if they're used for illegal activities, just like nobody *cares* if whores take MasterCard -- or, to use an earlier analogy about automobiles and crime, pimps ride around in Caddies.


Finally, of course, this cost reduction is something we still haven't proven, but, hopefully, we'll prove soon enough, or most of us who are left wouldn't still be trying to work on this.

That's what I mean by "land rush".

Besides, we don't even know what we're rushing towards. Hell, Oklahoma wasn't much use for farming, anyway. It was oil that made the place, right? :-).

Cheers,
RAH

-- 
-----------------
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'