[Clips] GeoCap: I Still Say "Digital Bearer Certificate"

R.A. Hettinga rah at shipwright.com
Mon Mar 5 08:37:07 PST 2007


--- begin forwarded text


  Date: Mon, 5 Mar 2007 11:34:34 -0500
  To: "Philodox Clips List" <clips at philodox.com>
  From: "R.A. Hettinga" <rah at shipwright.com>
  Subject: [Clips] GeoCap: I Still Say "Digital Bearer Certificate"
  Reply-To: clips-chat at philodox.com
  Sender: clips-bounces at philodox.com

  Geodesic Capital
  Robert Hettinga

  I Still Say "Digital Bearer Certificate"

  March 5, 2007
  Boston, Massachusetts



  At 8:32 AM +0400 3/5/07, Somebody wrote:

  >What's a good name for something which has all the properties of blinded
  >tokens, but is not called ecash?

  No euphemism required. Call it what it is: a digital bearer certificate.

  No. Seriously. It's not dead yet, Jim, it's still twitching... :-).

  "Bearer certificate" is a financial operations term of art. The observation
  that Chaumian blind signature cryptographic transaction protocols control
  and hold assets in bearer form is not mine, by the way, it's Nick Szabo's,
  and all the E-language/capability-programming folks use "bearer" in that
  context, and for that reason.

  And all the financial operations/regulatory/economist people I have
  explained this to also use it, because, once explained to them, it's self
  evident.  :-).

  More important, it's such a financial term of art, such a semantic shot-cut
  to the financial medulla oblongata, that when you say "digital bearer
  certificate" to a finance person -- especially a financial operations
  person for the first time, they do a double-take, say, "really???". And
  then they get this great big grin. Even now, after 9/11, they still do.
  Especially these days, since we're seeing the collapse of identity's
  usefulness to prevent fraud, or create security, especially as closer
  transaction settlement and clearing times trend toward instantaneity, and
  identity theft becomes more prevalent -- and the proffer of identity
  credentials everywhere becomes more security theater than security itself.

  Okay, so some financial operations people I talk to get very angry, for any
  of a number of reasons, including the partially-aforementioned demonization
  of bearer transactions because of the perceived forensic value of
  book-entry settlement in other areas of law-enforcement, but also because
  some of them think they see the obsolescence of everything they've learned
  about financial operations itself. Which, ultimately, isn't really the
  case. Like energy in physics, finance, especially financial operations, is
  always conserved.


  So maybe we should all stand inside the nomenclature tent, pointing out, as
  it were, and use "digital bearer certificate"?

  Or digital bearer protocol. Or digital bearer transaction, as the case
  warrants.

  When I started IBUC, I began to use "internet bearer" and so on, as a
  subset of the above, because, as a business definition, if it didn't run on
  TCP/IP we didn't want to play there. (Hence the company name "Internet
  Bearer Underwriting Corporation". :-)) And, of course, TCP/IP is trending
  toward ubiquity, even now.


  Finally, while we're defining things, it's the *asset* which is in bearer
  form, something which is impossible to do in the book-entry world. Some
  people, particularly cryptographers who are otherwise afraid of
  blind-signatures for whatever reason, political or otherwise, say that
  digital bearer protocols are "not bearer", because offline transactions
  permit double spending, or only prove double spending after the fact, that
  certificates have to be redeemed/reissued on-line to categorically prevent
  double-spending, and they're wrong. Or at least they frame the issue the
  wrong way and miss the point.

  It's not the offline/online characteristics of the certificates themselves,
  the cryptographic glops that move around the net like coins or notes
  without the normal use of transaction databases that are the issue. It's
  the *anonymity* of the protocol that makes the asset controlled by a
  digital bearer financial cryptography protocol a, um, bearer asset --
  though saying "bearer asset" too fast makes for humorous
  pseudo-malapropism. :-).


  Okay, if you're afraid, these days, of the word "anonymity", try
  identity-orthogonality, or something equally multisyllabic. The point is,
  you don't *need* identity to execute, settle and clear the transaction,
  like we do with the book-entry transaction settlement status quo -- which
  is why you can't have an anonymous book-entry transaction, even in
  Switzerland. Or Liechtenstein. Or Luxembourg. Or Vanuatu. Or, apparently
  lately, Singapore.

  And, obviously, any decent network traffic analyst worth his salt is going
  to see which IP address talks to whom on the net, so "anonymity" is a
  rather loose concept, from a security standpoint, at the very least.

  A literal definition of *a*-nonymity, if you will. Kind of like *a*-moral
  versus *im*-moral, is where I'm going with this, anyway, in the same sense
  that a car is a-moral, and cannot be im-moral or moral, for that matter.

  It's also why I think that ultimately digital bearer transactions will be
  cheaper than book-entry transactions in the long run: the price of
  identity, in the raw transaction cost of increased security itself, is too
  high, particularly as transaction cycle-time falls toward zero.


  Cheers,
  RAH
  Who was down for most of four days and had to rebuild his server from
  scratch this weekend due to a purely software-semantic issue and the
  inability to have the right hardware on line to recover with. Backup is
  your friend. :-). On the other hand, I have a terabyte external drive now,
  which is cool, not to mention pretty cheap, bringing
  shipwright/philodox/ibuc et al. up to 2TB in all, as I seem to have been
  acquiring hard drives in a byte-wise semi-log series. As Mr. Mhyrvold once
  observed, software is, indeed, a gas.
  --
  -----------------
  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'
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--- end forwarded text


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





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