1994-08-23 - Re: In Search of Genuine DigiCash

Header Data

From: tcmay@netcom.com (Timothy C. May)
To: rah@shipwright.com (Robert Hettinga)
Message Hash: 8358f8177b73cea411571cefe217515a80b9e2559b3a5a4e4f9f73a8f17b60c8
Message ID: <199408230312.UAA25302@netcom4.netcom.com>
Reply To: <199408210219.WAA15554@zork.tiac.net>
UTC Datetime: 1994-08-23 03:13:47 UTC
Raw Date: Mon, 22 Aug 94 20:13:47 PDT

Raw message

From: tcmay@netcom.com (Timothy C. May)
Date: Mon, 22 Aug 94 20:13:47 PDT
To: rah@shipwright.com (Robert Hettinga)
Subject: Re: In Search of Genuine DigiCash
In-Reply-To: <199408210219.WAA15554@zork.tiac.net>
Message-ID: <199408230312.UAA25302@netcom4.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain

Bob Hettinga writes:

> Immediate and final clearing must save money, somehow, but right now, it's
> hard to prove whether cash is still king in cyberspace. I have a (somewhat
> religious, in the sense that it may not be empirically proved in my
> lifetime) belief that that's the case.  That's why I like to agitate for a
> test. Yes, Tim, I know, you guys aren't bankers...

Don't let me stop you, Bob!

My main objection is not to anyone going ahead and trying something
(why should I object to that?), but to two themes which often seem to
go together:

1. Proselytizing for some kind of group project. Exhorting others to
"do something!"

2. An underestimation of the task ahead. A failure to absorb the work
already done, and a failure to see the work still needed. An
assumption that the task at hand is the _selling_ of digital cash as a

Now if Bob or anyone else can pull of digital cash, can convince some
bank to do a fairly major launch, fine. He or they will be famous.

I adopted this "politely skeptical" stance a year or so ago when I
hear about the efforts by Hughes, Abraham, Sandfort, and Frissell to
do some version of a digital bank. Ditto for the Austin group's plans
to do a new type of credit union.

This list has seen many proposals for many systems. Most don't go
anywhere, which is hardly surprising, given the lack of funding, the
serious technical, regulatory, and market resistance issues.

Note to All Readers Tired of this Issue: I think this'll be my last
response in a long while on this issue. Those who wish to build
RemailNet (tm), First Internet Bank (tm), Digibux Depository (tm), or
e$ Savings and Loan (tm) should certainly proceed. But statements of
plans, or exhortations that Cypherpunks should all pull together on
one of these plans, are less impressive to me--and I suspect to
others--than some tangible progress such as we saw with remailers,
with PGP, with message pools, and with thoughtful articles on the
important protcols (such as we saw tonight with Hal's posting on the
Stefan Brands scheme).

I don't think any of us on this list is yet ready to present a plan to
real bankers. Eric Hughes has told me he agrees. I don't know what Hal
or the others think, but the issues surrounding digital cash are
still sufficiently murky at this point to make a plan to deploy
digital cash premature. I see several ways around this:

1. The research groups centered around Chaum, with other CWI folks
like Brands having other approaches, will be likely centers of
expertise. Not surprising. Of relevance because this is where the
impetus will be concentrated.

2. I can imagine a financial entity (bank, brokerage, etc.) having a
working group looking into this. As a research project, as a way of
keeping current on something important.

3. Digital cash may come out of left field, sort of analogous to the
way hypertext is arriving unexpectedly from the Mosaic/Web
developments (done by a small group, fairly quickly).

What I can't see is a bunch of us going to a bank and "shmoozing" with
them and then having them see the light. Maybe Bob sees things
differently. Maybe he's right. Who knows.

What I know is that changing the world by exhortation is usually a
hopeless task. Examples work much better. Cypherpunks write code.

--Tim May

Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^859433 | Public Key: PGP and MailSafe available.
"National borders are just speed bumps on the information superhighway."