economics of spam (Re: A Trial Balloon to Ban Email?)

[Jim Choate]

Let me say it again...

Economics is technology, government is technology. Neither are a 'fact of
nature' or a 'natural law'. They are a direct result of the way we look at
the cosmos -and how we *interpret* natural law-. To put it another way,
they are each -primarily- *ego*. -WE- -make- the world by the -choices-
-WE- -make-. Stop acting like a -victim of circumstances-.

If other technology changes then economics change. It is not immutable.

Don't confuse 'economics' (which is a function of psychology) with 'supply
and demand' (which is a function of the 3 laws of thermodynamics). Not the
same thing.

Use the right technology and the problem is -removed- from 'economic'
consideration.

You're using the wrong technology.


On Mon, 12 May 2003, Tim Dierks wrote:

> At 04:45 PM 5/12/2003, Adam Back wrote:
> >Whether you think a few seconds is sufficient depends on your views of
> >the economics of spamming.  Ie how close to losing break-even the
> >spammers are, and whether a few seconds of CPU per message is enough
> >to significantly increase the cost.  This article for example
> >discusses the economics of spam:
> >
> >http://www.eprivacygroup.com/article/articlestatic/58/1/6
> >
> >they give an example of a spam campaign with a 0.0023% response rate,
> >and a yeild of $19 per response.  They estimate the cost of sending
> >the spam was less than 0.01c per message.  I've seen significantly
> >lower estimates for the sending costs.  To deter a given spam campaign
> >we just have to increase the cost to the point of making it
> >unprofitable given the response rate and profit per responder.  The
> >other side of this equation is what a second of CPU costs in monetary
> >terms to a spammer.
>
> Assuming that a CPU costs $500 and that its value can be amortized over 2
> years, CPU costs .0016 cents/second.
>
> Based on the numbers enough, the revenue/spam sent is .044 cents. Thus, the
> breakeven point is 27.6 seconds/message: assuming other costs are minimal,
> you have to require > 27.6 seconds of CPU calculation from an email
> submittant to ruin the spamming business model.
>
> A few thoughts on this:
>   - You have to adjust the size of the calculation frequently to keep up
> with Moore's law (although the time/$500 CPU is constant, assuming constant
> profitability for spam)
>   - If spammers have new technology or economies of scale available to
> them, it's going to adversely affect everyone else. (That is, if you're
> using an 18-month-old CPU and CPU-seconds cost you twice what they cost in
> the volume it costs spammers, your $500 computer will have to spend 2
> minutes of time to calculate a token it takes a spammer 30 seconds to
> calculate).
>   - This is going to dramatically increase the costs of sending bulk e-mail
> for non-spammers: for example, I get airline specials a few times a week;
> they must send millions of these.
>   - The CPU time required here is several orders of magnitude larger than
> the cryptographic costs associated with SSL, and SSL is not broadly
> accepted at least in part due to the CPU cost associated with with it; this
> implies to me that there will be substantial resistance.
>   - The CPU costs associated with SSL engendered a substantial market in
> cryptographic accelerators intended to reduce the cost to do an RSA private
> key operation. Presumably, a system like this will create such a market for
> e-mail token accelerators: unfortunately, this is exactly the kind of new
> tech / economy of scale envisioned above: we may end up with a situation
> where a calculation which costs a spammer .044 cents will take the average
> user's CPU 10 minutes or more to calculate.
>
>   - Tim
>


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