From: nobody@alumni.cco.caltech.edu
Date: Sun, 15 Nov 92 19:09:16 PST
To: cypherpunks@toad.com
Subject: Extortion Explosion
Message-ID: <9211160310.AA14098@alumni.cco.caltech.edu>
MIME-Version: 1.0
Content-Type: text/plain


Cheer up, Cassandra!  Things aren't all that bad.

> New opportunities in the extortion industry:
> 
> Old problem: the victim may inform the police, making it risky to pick up the
> money, which will likely be watched.
>      New solution: demand payment via cryptomoney.

Many forms of electronic money can be traced if there is cooperation
between the payer and the bank.  For example, in "Untraceable Electronic
Cash", by Chaum, Fiat, and Naor, in Crypto 88, we find Alice withdrawing
money from the bank, re-blinding it, and developing a "digital coin", C.
She then pays that to Bob, who deposits C in the bank.  The protocol
goes to great length to protect Alice, so that the bank can't link C
with her account.  However, if she simply _tells_ the bank the value of C,
then when Bob goes to deposit it, he can get caught.

> Old problem: if you build a reputation for carrying out your threats,
> parasitic competitors can issue threats in your name, collecting while your
> reputation is good but destroying your reputation by not following through on
> threats.
>      New solution: authenticate your threats and demands with digital
> signatures.

I can't imagine that this is a big problem right now - people falsely
claiming to represent Big Willie when they actually don't, and trying
to extort money based on Willie's fearsome reputation.  That sounds like
a dangerous business.  So reducing this "problem" won't make much of
a difference.

> Old problem: you may be caught firebombing the house, shooting the victim,
> slashing the victim's daughter's face, or whatever; if you subcontract to a
> thug, the thug may be caught and inform on you.
>      New solution: use cryptomoney (and a reputation for paying) to hire thugs
> while maintaining anonymity.

Well, if thugs know that they are now going to be taking the sole
responsibility for their actions, without the safety of knowing that
they can rat on their employer if worse comes to worst, then they'll
charge more to make up for the greater risk.  This will make extortion
less profitable.

> Old problem: providing protection, so that you keep a supply of economically
> viable victims from whom to extort.
>      New solution: Please find one! If the government can't protect victims
> from you, how can you protect them from competitors?

This is the key point.  What stops protection rackets now?  Is it really
the points listed above: that the money may be traced, that others may
falsely benefit from my reputation, that thugs may inform on me?  What
about simple physical surveillance of property?  What about revenge on
the transgressors?  (As above, the revenge would be restricted to the
thugs who did the job, but if it was bad enough it would still have a
strong deterrent effect.)

> Wishful thinking in the pursuit of liberty is no virtue; realism in the
> defense of imperfect liberty is no vice. Free-lance oppression isn't freedom,
> and I don't want it.
> 
> Cassandra
> 9531290065272860

It makes more sense to have good fire and police forces to deal with
the bad guys than to get all in a tizzy because the bad guys can talk
to each other now without getting caught.

Polyanna 
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