Dining Crypto -- An Introduction

(Timothy May)

Thanks for your repost of your message from the "Dawn of Time" (August 
1992).  Your list of "What DC Nets are Good For" was not specific enough
for my taste.  What DC Nets (untraceable communications) are good for:

1)  Once voice/video/VR makes it to the nets and once we have enough 
bandwidth/speed even realtime communications can be untraceable:

It's December 2000 and President Elect Clinton (Hilary) calls me for advice.
The call goes to my "Virtual Communications Server" located "Somewhere on the
Nets".  The packets are forwarded to me after being split up and sent their
various ways through anonymous remailers.  My half of the conversation travels
back the same way.  The packets pay the anonymous remailers for their
services with digital cash attached to their address headers.  We notice 
no time lag because the nets are fast and the packets carry a "realtime"
priority.

With the proper setup, the President of the US will be talking to me without
knowing (or being able to find out) where (or who) I am.

2)  This means markets freed from even the theoretical possibility of regulation.
Anything that can be digitized can be sold with no restraints save the absence
of a willing buyer.  Books, movies, VR epics, financial products, and all
non-physical services can be traded without coercion (and without taxation).
Remember too that "non-physical services" includes almost all management and
professional services.  The technique of "anonymous credentials" can be
used to check out those you deal with.

3)  The lack of regulation in the "spiritual realm" will distort market
transactions in the still controlled "physical realm."  People will tend
to "unbundle" the non-physical aspects of their services and sell them on
the nets even if it is less convenient to do so because of the *tax* savings.

4)  The reduction is government "revenue" as economic activity transfers
to the nets will induce a beneficial downward spiral in the authority and
power of government.

5)  People who become used to freedom in one part of their lives (their
work and play on the nets) will not enjoy the coercion they suffer in the
remainder of their lives (the place they sleep).  They will have 
the motivation and the tools to liberate their whole lives.  All without
the Libertarian Party converting a single person.  Freedom is a powerful
recruiter.

Duncan Frissell

[...]
> 2)  This means markets freed from even the theoretical possibility of
> regulation. Anything that can be digitized can be sold with no restraints
> save the absence of a willing buyer.  Books, movies, VR epics, financial
> products, and all non-physical services can be traded without coercion (and
> without taxation).  Remember too that "non-physical services" includes
> almost all management and professional services.  The technique of
> "anonymous credentials" can be used to check out those you deal with.

There is no way you can get around taxation if you intend on using this
system in real life.  Your system is much like that of a drug dealer, he
gets all this money, but has no where to spend it until it has been
laundered.  They will get you at the banks or wherever you go to spend your
money.  The "War on Drugs" has really caused this kind of banking service
to dry up, and unless you are moving millions of dollars a day no one is
going to even look at you if you want to make your money untraceable...

> 3)  The lack of regulation in the "spiritual realm" will distort market
> transactions in the still controlled "physical realm."  People will tend
> to "unbundle" the non-physical aspects of their services and sell them on
> the nets even if it is less convenient to do so because of the *tax* savings.

Death and taxes.  You can't escape them, so lets drop that fantasy and
concentrate on the rest.  Your digital/untracealbe/untaxable cash can only
purchase items from this shadow world of non-physical things, and that just
doesn't pay the rent or put food on the table.  The appetite of the
taxation-beast will not diminish, and everyone will just end up having
higher taxes on the physical elements of daily life that can't be stuffed
on the wire.  Sounds like this is going to be a world of info-elite tax
dodgers...the public will love you...

The unbundling of the physical and non-physical aspects are nice, but how
many non-physical aspects of a service are there?  There are a lot of
things that can be done through a network, but there are still a lot of
things that will never escape thier own tangibility; these are generally
the things in life one cannot do without, like food, shelter, etc.  

> 4)  The reduction is government "revenue" as economic activity transfers
> to the nets will induce a beneficial downward spiral in the authority and
> power of government.

Yeah.  Right...  If only it were true...

jim