BoardWatch on digital cash

See current (July 1994) _BoardWatch_, pp. 60-63.  There's an article on an
e-money scheme called NetCash.  Unfortunately it is utterly stupid, but
BW is giving it a semi-endorsement.  Some of you d-c afficionados might
like to disabuse them of some notions. 

Some of the flaws:

1) not cryptographically secure
2) someone can randomly guess the ser. # of your digicash and go spend it
3) non-anonymous
4) the person transferring the netbucks to you can actually spend it
before you validate it with the central server (e.g. it would only be of
use in cases where product/service has yet to be rendered, and customer
gives you the netmoney, which you verify and only then serve them. 
Completely useless otherwise.)

There are more, but those are the main ones.

-- 
Stanton McCandlish * mech@eff.org * Electronic Frontier Found. OnlineActivist
F O R   M O R E   I N F O,    E - M A I L    T O:     I N F O @ E F F . O R G 
O  P  E  N    P  L  A  T  F  O  R  M     O  N  L  I  N  E    R  I  G  H  T  S
V  I   R   T   U   A   L   C  U   L   T   U   R   E      C  R   Y   P   T   O

Stanton McCandlish writes:

> See current (July 1994) _BoardWatch_, pp. 60-63.  There's an article on an
> e-money scheme called NetCash.  Unfortunately it is utterly stupid, but
> BW is giving it a semi-endorsement.  Some of you d-c afficionados might
> like to disabuse them of some notions. 
> 
> Some of the flaws:
> 
> 1) not cryptographically secure
...rest of flaws elided...

Indeed, there are many kinds of "digital cash" or "digital money"
being floated. I suspect the term is about to join "Information
Superhighway" and "infobahn" in the popular media.

But all but a very few of them are polar opposites of what we as
Cypherpunks want. Microsoft wants home banking, VISA wants it, and
various cryptographically-incompetent schemes are being proposed.

As you on this list all know, these are Bad Ideas.

What we can do to head them off or to deploy the right kinds of
systems is the challenge ahead of us.

Our apparent victory in the Clipper matter (the public scorn for
Clipper, the editorials against it, the weaknesses exposed, and the
favorable articles about CPs) may serve us in good stead. But it will
be a tough struggle, as things are moving fast behind the scenes.

(My greatest fear: legislation to support home/cable banking, with
restriction on competitors.)


--Tim May



-- 
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^859433 | Public Key: PGP and MailSafe available.
"National borders are just speed bumps on the information superhighway."

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In list.cypherpunks, tcmay@netcom.com writes:

> Indeed, there are many kinds of "digital cash" or "digital money"
> being floated. I suspect the term is about to join "Information
> Superhighway" and "infobahn" in the popular media.

I believe I'll just be cringing now.  Ugh!  I hate the cute metaphors.

> But all but a very few of them are polar opposites of what we as
> Cypherpunks want. Microsoft wants home banking, VISA wants it, and
> various cryptographically-incompetent schemes are being proposed.
> 
> As you on this list all know, these are Bad Ideas.

Widespread home banking would give the Con a real good window into not
only the spending habits, but the sum of resources of a lot of people.
When you add in debit-card transactions at the supermarket, you have
pretty much a microscopic picture of a person (including a fair estimate
of their cash transactions, albeit with no hard link to where the cash
goes).  I'm sure the electronic banking being done even now is harvested
for statistical data.  (And I'm having real second thoughts about the
bank-by-phone service where I've toned in my account number and ATM PIN.
I have no guarantee that my phone line is secure.)

> What we can do to head them off or to deploy the right kinds of
> systems is the challenge ahead of us.

Preemptive deployment has to be the answer.  Just like strong crypto
everywhere else, get the product out there.  What we need (and probably
don't have a chance in hell of getting) is a regional bank to step out
and make cryptographically secure home banking available.  If it were
me, I'd hit everywhere... telephone modem links, Internet connection
(yeah, I know... trendy, but an effective attention-getting device) and
some kind of interactive cable system.  If one bank does it, and sells
the crypto security hard, the others will have to follow suit for
marketing, if no other reason.

Now, if that bank also were to be a real Digi-Cash agent as well...

> (My greatest fear: legislation to support home/cable banking, with
> restriction on competitors.)

That's the historical method, though.  It's tough to deflect that kind
of inertia.
- -- 
Roy M. Silvernail  []  roy@sendai.cybrspc.mn.org

                          It's just this little chromium switch.......

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