1994-08-21 - Re: Digital cash market

Header Data

From: cactus@bb.com (L. Todd Masco)
To: cypherpunks@toad.com
Message Hash: 69e64580445db1cce089437126edd0898bfdfcab8ad5fd03d7e6e2f4334fa731
Message ID: <338nb1$c49@bb.com>
Reply To: <199408212216.RAA15216@chaos.bsu.edu>
UTC Datetime: 1994-08-21 23:13:01 UTC
Raw Date: Sun, 21 Aug 94 16:13:01 PDT

Raw message

From: cactus@bb.com (L. Todd Masco)
Date: Sun, 21 Aug 94 16:13:01 PDT
To: cypherpunks@toad.com
Subject: Re: Digital cash market
In-Reply-To: <199408212216.RAA15216@chaos.bsu.edu>
Message-ID: <338nb1$c49@bb.com>
MIME-Version: 1.0
Content-Type: text/plain

In article <199408212216.RAA15216@chaos.bsu.edu>,
Jim Hart <hart@chaos.bsu.edu> wrote:
>L. Todd Masco:
>> The american people keep claiming in polls that they want better privacy
>>  protection, but the fact is that most aren't willing to do anything
>>  about it: it's just a preference, not a solid imperative. 
>Most customers want more privacy, but when you think about it, there 
>is not a whole hell of a lot they can do about it right now.

Sure there is.  People give out the SSNs all the time because it's
 too inconvenient not too.  People patronize companies that buy and sell
 mailing lists.  People patronize companies that telemarket.  It's
 just too much of a pain not to.

I think you miss my point (I'll talk a bit more about it later, in answer
 to your specific points):  people care, but not enough to inconvenience

>I won't comment on why most consumers have neglected that option.
>What I'm talking about is a digital cash system that is as
>easy for the consumer as an identified debit card.  We can do that
>with today's technology.

With the technology, yes.  I don't think that that is an issue (or if
 it is, let's pretend it isn't for this discussion).  The problem is
 a political and socioeconomic one: it takes a large allocation of
 resources to create a system that is as easy to use as credit card.
 Our society simply does not allocate resources in a way that will get
 this task done without any major push from those with really power.

As anyone who gives Chomsky any credibility knows, our rules in our
 society are largely dictated by the needs and demands of big business,
 with occasional concessions to mass desire.  The desire for privacy
 in financial transactions is not large enough at this time: we're
 reminded of that every time we see a form with a space for your

Perhaps abuses of our current information structure will change this:
 I hope it will, with minimum real impact.  I'm not optimistic about that,
 though: our society only changes quickly in the face of crisis.

>The traffic level on this list is proof that there are plenty 
>of people who care about privacy.  The surprisingly large number 
>of folks who actually do go to Frissell style lengths is proof 
>that there are plenty of peope who care about privacy. 

I'm sorry, but I really don't think this shows anything for two reasons:

(1) The net is big.  Really big.  A mailing list on just about anything
 can get this kind of traffic. I'm sure there's a NAMBLA list somewhere
 with decent traffic: this doesn't mean I expect child pornography
 (to steal a horseman) to become accepted any time soon.

(2) We talk.  We talk, and talk, and talk.  Few people actually put
 real effort into implementing anything -- and even if we did, we don't
 control much in the way of resources: juts brains.  Granted, you can
 do a lot with a bunch of clever brains, but without real backing by
 existing social and economic structures it is a difficult, up hill

>The real problem is, these polls are not well publicized,
>are geared towards political rather than business solutions,
>and haven't sunk through to the people in the product R&D and 
>marketing departments.  Exacerbating this, some organizations 
>(such as American Express) make a lot of money off their free 
>treasure trove of transaction information, and are using lots 
>of FUD to keep privacy enhanced alternatives off the market. 

This is actually kind of interesting: it's something that really 
 bugs me.  For years, American Express made noises about how they had
 the consumer's best privacy interest at heart, how they never sold
 mailing list to other companies.  They even sent out for free
 a document on protecting your SSN.  

Unfortunately, they've realized that there's a real economic incentive
 to compromise the information they hold.  This proves two points:
 one, the standard point that the only way to protect information is
 to not create it, and two, that there's at least some real incentive
 to bias corporations against privacy schema.

Many large corporations stand to benefit from the lack of privacy,
 and so their resources are likely to be deployed against creating
 privacy without a strong customer demand (a demand, not a preference)
 for privacy.

>A dramatic, Apple-style ad portraying Visa and MasterCard as
>Big Brother may be what is needed to get over the apathy
>hurdle.   There are plenty of credit card privacy horror stories
>we could publicize.  Think of what could be accomplished these days
>with an infomercial.  But this takes at least one excited 
>organization with marketing clout to do it.

That's exactly my point: something big will have to happen in
 order to change the ways things are headed now.  It could be
 a planned event or (more likely) set of events, or it could
 be some dramatic calamity.  Otherwise, we're stuck in the old
 "boiling frog" trap: people will only care enough once it's too

>Meanwhile, smart card based digital cash trials, supported
>by a large bank, are going on in Britain.   There are major
>markets for both customers and vendors that don't have access
>to the credit card system, as well as customers who care about
>privacy.  This is not a fringe technology; its possibilities 
>just haven't sunk in yet.

You're right, these things are significant.  I just doubt that they'll
 have real impact in this country: our government simply has too strong
 a hold on our economic transactions for something like digital cash
 to work against their wishes.  If they spread here before the Feds
 wake up, great: we win.  Otherwise...

I don't think we really disagree on any substantive factual issues:
 just how to weigh them.  We really are, I believe, at a pivotal
 point: if somehow we manage to get a system deployed before Big
 Business wakes up and sees the threat we pose, then wonderful.
 If not, it's going to be a long and bloody battle, one in which we
 are not by any means assured victory.

Maybe I've just read too much Chomsky and Fuller and become blinded by
 their analyses.  Chomsky talks about how our system works now and
 in the past to the more-or-less exclusive advantage of Big Business,
 while Fuller discusses the US's financial past (in Critical Path and
 Grunch Of Giants) and how technology spreads into common usage.

Bucky Fuller's main strategy to improve living conditions of humanity
 was to develop technologies so that they'd be available for deployment
 when some crisis demanded them: I sincerely hope that this isn't the
 strategy that we end up having to live with, but I fear it very well
 may be, given the conflicting interests of companies such as AMEX and
 the desire for transactional privacy.
L. Todd Masco  | "Large prime numbers imply arrest."  - Previously meaningless
cactus@bb.com  |   grammatically correct sentence.  Now...