From: rah@shipwright.com (Robert Hettinga)
Date: Sat, 20 Aug 94 19:23:12 PDT
To: "L. Todd Masco" <cypherpunks@toad.com
Subject: e$: e-cash underwriting
Message-ID: <199408210219.WAA15566@zork.tiac.net>
MIME-Version: 1.0
Content-Type: text/plain


At  4:53 PM 8/20/94 -0400, L. Todd Masco wrote:

>The problem here, and the one that's of interest to Cypherpunks, is
> how to change this system, using credit cards and all the loss of
> privacy they entail, into one using anonymous digital cash.  HKS
> certainly has a commitment (though in word only at this point, since
> it's vaporware) to support digital cash, but as I've noted before
> it a very difficult bootstrap problem.
>
>There has to be some reason people would use digital cash over credit
> cards and frankly, I don't see it happening in the near future except
> by some large power (like banks) decided to support it.

Forgive me, I'm beginning to think that the power doesn't have to be that
large at all.

I'm beginning to have an attack of "I've got a barn, let's have a show".
It's okay, it'll pass if I sit down...

While I think the technical mechanics are simple (you all seem to, anyway),
I'd like to see what regulatory and legal roadblocks have been identified.
The only way to find out about the *market* for the product is to test it.

By the way, I think the problem of double spending is a risk that can be
managed, like the risk that a bank takes when a check is bounced...  The
culprit is identified, and it becomes a matter between the bouncee (however
removed from the criminal transaction), the law, and the bouncer.  Of
course this might require some pretty vicious personal ID on the part of
users of digital cash, like no nyms allowed, but you still get privacy if
nobody bounces the cash. I'm also sure other administrative methods will
evolve which will allow almost total privacy and no double spending in
practice.

Tim refers to voluminous study and many man-years of effort put into
figuring how to do e-cash underwriting from a regulatory standpoint. I
prefer the word "underwriting" to banking, because there are no accounts of
deposit held at an e-cash exchange (where underwriting happens). There
seems to be a problem with the word "bank" here, like there seems to be a
problem with the word "bond". ;-)

Are there any non-proprietary, public sources of information on these legal
and regulatory research efforts?  Are there archives of the c'punks traffic
on this subject that I can look at?

Thanks,
Bob Hettinga

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