From: db@Tadpole.COM (Doug Barnes)
Date: Fri, 2 Dec 94 07:50:23 PST
To: paul@digicash.com
Subject: Re: Brands excluded from digicash beta
In-Reply-To: <199412021404.PAA18209@digicash.com>
Message-ID: <9412021548.AA17294@tadpole>
MIME-Version: 1.0
Content-Type: text/plain



A further reply to Mr. Robichaux, who I paraphrase, "The more I 
have problems with the DigiCash beta, the better First Virutal
looks."

Some problems with this:

1) It is, after all, a Beta Test. Many companies limit 
   participation in such tests quite arbitrarily. Also,
   remember, DigiCash (to the best of my knowledge) is
   not going into the digital bank business itself, but
   rather through licensees. Aside from Paul, who is very
   PR oriented, it is primarily a group of quite talented
   young programmers who are, while answering your letters,
   trying to come out with new versions of the code. 
  
2) A group of us went over the First Virtual stuff in detail
   last night over fajitas, and were practically rolling on 
   the floor with laughter. Basically they have an attitude 
   of "Crypto is too hard, people won't want to use it." So
   instead, each transaction consists of an e-mail exchange
   which is converted ultimately into credit card transactions
   The exposure time for the merchant is on the order of _90 
   days_. All fraud, etc., is on the head of the merchant.

   The bottom line here is that FV has a system which is
   much more sluggish than the DigiCash system, even though
   it doesn't use "hard" crypto. It is far from anonymous, and
   the transactions are trivially reversible. This is actually
   a _design goal_ in their "Soylent Green", er, "Simple Green"
   proposed standard. It is completely inappropriate for hard
   goods of significant value, and its minimum transaction cost
   is high enough to rule out its applicability for very small
   transactions. Even if used for purely informational goods,
   if an undercapitalized info service becomes popular, it will
   sink beneath the waves while waiting for payment.

   As near as I can tell, FV's technology was developed by people
   who wanted to implement their pet philosophy about Internet 
   commerce (customer should examine info first, then commit to 
   paying, all transactions reversible, cryptography and anonymity 
   are bad, secure transactions are not possible on the net, etc.),
   rather than anything bordering on an Internet cash-like system.

   So, I ask, First Virtual is looking better and better for doing
   _what_?  Until they deal with the interface problem (get a decent
   client, rather than relying exclusively on e-mail), I think 
   they're not even going to be adequate for getting shareware-scale
   proceeds from putting up a cool Web page.