From: rah@shipwright.com (Robert Hettinga)
Date: Sat, 6 Aug 94 19:29:40 PDT
To: cypherpunks@toad.com
Subject: Re: e$: Cypherpunks Sell Concepts
Message-ID: <199408070228.WAA26202@zork.tiac.net>
MIME-Version: 1.0
Content-Type: text/plain


At  5:41 PM 8/6/94 -0700, Eric Hughes wrote:

>The obstacles are certainly not for electronic money, which the Fed's
>been using for some time now, but rather for electronic cash, which
>includes anonymity.

We've chased each other around a tree like this one before... Let's see
what the differences are this time. I've been doing some thinking about
this...

Anonymity can come out of retail settlement of e$, if the transactions
aren't tracked.  We've talked here before about how you think that the
tracking of those transactions at the retail level is pretty trivial, so
the cost to the user of traceable e$ may be meaningless.  I'm not so sure
that that's the case, and I think (I hope!) I remember Perry agreeing with
me on that point. But if we fiat the argument just to see where it takes
us, we come to the sheer volume of transaction records themselves.

Is it possible to accurately estimate the cash transaction load of an
economy?  I bet that if we could, you'd see that the data from each
transaction would cause the problem news servers have by several orders of
magnitude.  The information would get dumped pretty frequently.  This is
probably the same problem the NSA has now picking out signals to listen in
on, but running down an audit trail is different, it's a historical
process.  Since you don't know whose transactions you need, you need to
keep them all. True, this doesn't keep TLAs from trying trying to drink
from a firehose, or more to the point, to free-dive to the bottom of the
Marianas Trench (if they could keep all of the data), or high-dive into a
wading pool (if they couldn't). Hmmm...

>The USA provides a fair amount of financial
>privacy to everyone but the government, particularly law enforcement.
>So the _business_ case for privacy is largely felt to be already
>satisfied by the regulators.

When *every* business transaction can be scrutinized (as much as physically
possible, per above) at any time, for any reason the government deems
necessary, it makes a sizable business case *for* traceable electronic
cash.  This is probably the place to put the lever on the business
community.

>The Treasury department, among others, really _doesn't_ want
>non-recorded transactions.  Unless the banking community as a united
>front _does_, I don't think it will happen domestically (USA) before
>other deployments.  If there's not a united front, it'll be divide and
>conquer.

Non-recorded transactions exist already. It's keeping them from
dissapearing that we're really talking about here.

It's quite possible to get banks to present a united front.  They have one
of the largest lobbies in Washington.  They have fought reporting
requirements tooth and nail with some considerable success, but every time
they get greedy (S&Ls) the noose tightens.  It might be the threat of
international deployment and regulatory arbitrage which brings them around,
and fires up the lobbying apparatus on our side of the issue.  It has
worked before (gold, et.al.). On the other hand if those reporting
requirements are frictionless, they don't *need* to fight it, do they...
It's time to leave the ring.  Somebody tag me.  My brain hurts...


Now to plug the topic of the thread a bit, how receptive would people in
the crypto community be to participating in an annual dog&pony/schmoozefest
for the suits?  Who should chair the morning "primer" session?  *E-mail* me
with your ideas, everyone.


Thanks,
Robert Hettinga


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Robert Hettinga  (rah@shipwright.com) "There is no difference between someone
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