Making Money in Digital Money

[Tim May]

On Thursday, May 1, 2003, at 07:44  AM, R. A. Hettinga wrote:

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> At 10:58 PM -0700 4/30/03, Steve Schear wrote, at the end of a
> rhapsody on amateurism:
>
>> I see no reason why important security, crypto or financial crypto
>> developments must be linked with direct or immediate financial
>> compensation.
>
> Guys, I'm not saying that people won't do cool stuff for free. I'm
> saying that if actual markets emerge for that cool stuff, they'll
> damn sure *not* do it for free anymore.
>
> Your exemplar, Einstein, last time I looked, was a *professional*
> physicist most of his life. Why? Because various institutions could
> hire him, and make money in research budgets, endowment increases,
> etc.

Einstein did his 1905-published work on special relativity outside of 
his paid job, which was examining patent applications for the Swiss 
government. This would be fully comparable to someone here doing his 
crypto or CP work while working as a drone (on something else) at Cisco 
or United Technologies.

By the time he did his 1915-published work on general relativity,  he 
had of course received various honorary position at universities.

The issue is not that people like you or me or Steve or Einstein should 
not seek to be paid for our work (good if one can get it). The issue I 
raised, and that perhaps Steve is agreeing with partly, is that way too 
many people have had the "Hey kids, let's put on a _show_!" view of 
doing crypto and digital money startups. The script goes like this:

-- have a vague idea that crypto, anonymity, geodesic blah blah, etc. 
is important

-- see a few other companies (RSA, Verisign, ...) which have gone 
public and made their founders a lot of money (before the crash, of 
course)

-- decide to "seek funding"

-- without a specific technology or product already in hand!

-- the plan being to raise the several millions (dreams of $30 million) 
and then hire a bunch of eager programmers and then figure out what, 
exactly, the product should do

Well, this is a flawed "pre-business plan," to coin a phrase.

We could spend hours discussing the particular circumstanced which 
allowed RSA to eventually succeed, what happened at ZKS (as the Adams 
note, still surviving, but in a dramatically different business), and 
so on and so forth. And Digicash.

Suffice it to say I don't think there's _any_ chance that an MBA type 
can put together a funding package and _then_ develop a 
technology...not in this market.




--Tim May
"The only purpose for which power can be rightfully exercised over any 
member of a civilized community, against his will, is to prevent harm 
to others. His own good, either physical or moral, is not a sufficient 
warrant." --John Stuart Mill