[12172] in cryptography@c2.net mail archive
Re: Micropayments, redux
daemon@ATHENA.MIT.EDU (Matt Crawford)
Mon Dec 16 19:24:33 2002
Date: Mon, 16 Dec 2002 18:23:23 -0600
From: Matt Crawford <crawdad@fnal.gov>
In-reply-to: "16 Dec 2002 18:13:38 GMT." <atl54i$eqh$1@abraham.cs.berkeley.edu>
To: daw@mozart.cs.berkeley.edu (David Wagner)
Cc: cryptography@wasabisystems.com
> No, it doesn't. It doesn't take unlimited time for lottery-based
> payment schemes to average out; finite time suffices to get the
> schemes to average out to within any desired error ratio.
Strictly speaking, the average will come within your error tolerance
of the expected value *with probability near 1*. In an infinite
number of trials, it will come within your tolerance *with
probability 1*. Neither case is a guarantee that it will come that
close to the expected value.
> The expected risk-to-revenue ratio goes down like 1/sqrt(N), where
> N is the number of transactions. Consequently, it's easy for banks
> to ensure that the system will adequately protect their interests.
Expected, yes. But the absolute upper bound on loss does not.
These quibbles may be of interest only to mathematicians and insurers.
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