Re: In Search of Genuine DigiCash

At 10:08 PM 8/23/94 -0400, Jason W Solinsky wrote:
>Well we agree that the selling point is economic efficiency. But "anonymity
>reduces overhead" ?

I keep getting tangled up in that. I'll try again. Anonymity is not the
issue. Strong Cryptography is the issue. Anonymity comes from strong
crypto. Like I said before, anonymity is the byproduct of using strong
crypto to build a digital cash system.

It's like what I said about flight in this same thread. It turns out the
best way to go really fast is to fly (at least until someone builds an
evacuated tunnel with a magnetic levitation train in it, anyway). In
inventing aviation, we discovered how to go really fast.  It turns out that
going really fast is a cheaper way to do things if time is valuable. Being
able to fly, while an end in itself, is also a byproduct of wanting to get
somewhere fast, at least in economic terms.

It turns out that in creating an anonymous digital cash system, you can do
very cheap, irrefutable transactions offline in an internetworked
environment.  That's cheaper for a whole lot of reasons, a relatively minor
one being the ability to pool the cash without a lot of transaction
recordkeeping. You don't have to know who gave you each piece of money in
order to find who stiffed you, if it happens.

The reduced overhead increases economic efficiency. There are other reasons
for not doing on-line transactions. Including credit checks, interest
calculations on outstanding balances, vendor reserve requirements,
transaction threading, on-line wait states and bandwidth, etc.  It's
considerable.

In addition, I'll forward to you off-line the Eric Hughes postings that got
me started on this. They were put here on 8/19 at 12:20, 1:02, and 4:24 and
4:43. Cheez, looks like I'm citing scripture here. I feel like one of those
fundamnmentalists you see in football endzones on TV. You know, the guys
with the sign that says "John 6:66". ;-).

> There are alot of reasons why I think anonymity is important, but I fail
>to see any significant economic advantage that anonymity confers to a person
>who otherwise couldn't care less about it.

I think like stellar formation, evolution and economic progress, the
privacy of digital cash may be a happy accident resulting from the
activities of a random process (internet commerce) looking for a way to
make itself more efficient. It happens.

Cheers,
Bob Hettinga



-----------------
Robert Hettinga  (rah@shipwright.com) "There is no difference between someone
Shipwright Development Corporation     who eats too little and sees Heaven and
44 Farquhar Street                       someone who drinks too much and sees
Boston, MA 02331 USA                       snakes." -- Bertrand Russell
(617) 323-7923

The reduced overhead increases economic efficiency. There are other reasons
   for not doing on-line transactions. Including credit checks, interest
   calculations on outstanding balances, vendor reserve requirements,
   transaction threading, on-line wait states and bandwidth, etc.

Whatever are you talking about?  Credit checks for an online system?
If anything, credit status for offline systems would be the salient
issue.  Interest calculations, if that's the product model, are
consistent with both online and offline systems.  Ditto for reserve
requirements.  Transaction serialization (threading) will be required
for both systems and look to be more complicated for offline systems
than for online.

There are some additional costs with implementing the high-uptime
systems required for online systems.  On the other hand, with the
right product structure, there's no need for identity at all in an
online system as there is in offline systems with the ability to
identify multiple spenders.

Eric

> At 10:08 PM 8/23/94 -0400, Jason W Solinsky wrote:
> >Well we agree that the selling point is economic efficiency. But "anonymity
> >reduces overhead" ?
> 
> I keep getting tangled up in that. I'll try again. Anonymity is not the
> issue. Strong Cryptography is the issue. Anonymity comes from strong
> crypto. Like I said before, anonymity is the byproduct of using strong
> crypto to build a digital cash system.

No it isn't. Making a digital cash system secure, scalable and distributed
is a non-trivial task, making it anonymous is still more difficult.
Guaranteeing anonymity creates alot of problems as was brought out in a
previous discussion on license based cash in which it was pointed out
that by colluding with consumers a bank can still "mark" bills.

> It turns out that in creating an anonymous digital cash system, you can do
> very cheap, irrefutable transactions offline in an internetworked
> environment.  That's cheaper for a whole lot of reasons, a relatively minor
> one being the ability to pool the cash without a lot of transaction
> recordkeeping. You don't have to know who gave you each piece of money in
> order to find who stiffed you, if it happens.

I am yet to see a single anonymous digital cash system which could not be
implemented more simply if the requirement on anonymity were not made. I
would be pleased to be proven wrong.

> The reduced overhead increases economic efficiency.

What I'm really asking is for an example of this overhead that is being
reduced.

> There are other reasons
> for not doing on-line transactions. Including credit checks, interest
> calculations on outstanding balances, vendor reserve requirements,
> transaction threading, on-line wait states and bandwidth, etc.  It's
> considerable.

And its going to get more considerable when we have communities of agents
arguing with each other. I think we want to solve the problems created by
these requirements, not shy away from them.

JWS