From: hughes@ah.com (Eric Hughes)
Date: Thu, 2 Jun 94 09:25:16 PDT
To: cypherpunks@toad.com
Subject: IMP (was Re: ecash-info (fwd))
In-Reply-To: <9406021552.AA02177@snark.imsi.com>
Message-ID: <9406021633.AA06028@ah.com>
MIME-Version: 1.0
Content-Type: text/plain


   The advantage is that its electronic AND that its secure. Since its
   secure, the intermediation costs drop dramatically as the possibility
   of fraud goes down. 

But it is also possible to make systems that are secure and
non-anonymous.  Admittedly, I spoke of "identity-based systems", which
is not quite right.  Rather I should have said "identifying systems",
which include the identity but do not rely upon it alone to verify
payment, as do credit cards, say.  These kinds of systems can be just
as secure and completely lack anonymity.  

To pick just one, consider certified digital checks.  The drawer
writes a check, the bank certifies it (and puts a hold on the
account), the check is transmitted and deposited.  Secure, low level,
and totally identifying.

   One could do electronic payments with credit cards
   and email right now -- but the costs would be pretty bad.

I agree.  There's an interesting parallel.  As it turns out, credit
card fraud is _dropping_, because of various educational programs and
anti-fraud measures.  The one segment that credit card fraud is
increasing is in technical card forgery, which is way up.
Transmitting card numbers electronically over the Internet can only
exacerbate that problem.

Eric