[4215] in cryptography@c2.net mail archive
Re: Digital Bearer Documents -- an Oxymoron ??
daemon@ATHENA.MIT.EDU (Robert Hettinga)
Mon Feb 15 22:13:30 1999
Date: Mon, 15 Feb 1999 18:57:48 -0500
To: micropay@ai.mit.edu, e$@vmeng.com, cryptography@c2.net,
cypherpunks@cyberpass.net, mac-crypto@vmeng.com
From: Robert Hettinga <rah@shipwright.com>
--- begin forwarded text
Date: Mon, 15 Feb 1999 23:11:21 GMT
From: Adam Back <aba@dcs.ex.ac.uk>
To: worley@world.std.com
CC: dbs@philodox.com
Subject: Re: Digital Bearer Documents -- an Oxymoron ??
Sender: <dbs@philodox.com>
List-Subscribe: <mailto:requests@philodox.com?subject=subscribe%20dbs>
Dale Worley writes:
> The technological appeal is that since registration actions are not
> needed when transferring ownership, the data processing overhead is
> significantly reduced. However, it strikes me that this is not
> particularly relevant -- in most cases, transaction costs in payment
> systems are due to the risk of non-payment, not data processing per
> se, and in any case, payment transaction costs are a small portion of
> the entire transaction.
Risk of non-payment, and the dispute resolution process are where the
costs come from.
Use of anonymity allows one to define away dispute resolution: the
money has changed hands, no one has the power to get the money back,
and the recipient is anonymous. You cut out what Doug Barnes'
protocol error handling step in book entry: 'and then you go to jail'.
You've got to identify them first.
Risk of non-payment is simple to resolve: you don't offer digital
bearer certificates for unsecured credit. It's pay up front, or a
secured loan.
> And, as you note, it is not possible to generate a *purely* bearer
> digital instrument, one will still need some sort of central
> authenticator. And those authenticators are still subject to state
> regulation.
And there's the rub. Bob's thoughts are that as it will save so much
money, that the local governments declaring it illegal won't be a show
stopper. I tend to agree, and expect that jurisdiction shopping may
suffice for the short term, in the long term jurisdictional
competition will mean that laws will follow.
Adam
--- end forwarded text
-----------------
Robert A. Hettinga <mailto: rah@philodox.com>
Philodox Financial Technology Evangelism <http://www.philodox.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'
