From: Duncan Frissell <frissell@panix.com>
Date: Fri, 8 Sep 95 10:22:19 PDT
To: shamrock@netcom.com (Lucky Green)
Subject: Car rentals, Driver's Licenses, Ecash, & Net Access
Message-ID: <199509081721.NAA00705@panix.com>
MIME-Version: 1.0
Content-Type: text/plain


Lucky Green's reply to someone else motivated me to comment:

>>Suppose you have acquired a million dollars worth of legal, above-board
>>DigiCash dollars and you want to surreptitiously transfer this wealth to a
>>below-board friend.  Your friend creates a temporary anonymous account at an
>>understanding bank.  Y
>
>Won't work. Ecash, except as used for frequent flyer like points, will
>exist in only *one* world wide e$ currency, issued by a single entity
>composed of various major banks and subject to US laws. Getting Ecash
>accounts will therefore be subject to the same legal requirements that
>apply to normal US checking accounts.

For the holiday weekend, I rented a car at a major agency in the state where
I usually sleep.  To secure the rental, I presented a driver's license from
another state and a secured VISA card.  The agency presented me with a car
bearing the license plates of a Southern state far away from the rental
location.  In the past, this agency (one of the majors BTW) had given me a
car registered in yet another Southern state for a week's rental bearing a
registration that expired halfway through that week.  No problems in any case.

Interestingly enough, the agency refuses to rent to local citizens of the
state where it is located and where I often sleep.  My posession of a
"foreign" DL makes it easier for me to rent cars.  Money and imagination
overcomes many of the "social control" aspects of licensing and registration
requirements.

Now what this all has to do with transaction controls is the following.  It
is suggested that governments and private parties will cooperate in imposing
absolute restrictions on people's ability to complete "unlicensed"
transactions.  Thus it is suggested that driving, posession of a motor
vehicle, working for pay, having a bank account, having a phone account,
having a net account can all be rigidly controlled.

We've all read the stories about the DMV and how various states are pulling
licenses for child support arrears, tax evasion, overdue library books, etc.
The Feds have proposed a National SS# Database that would have to be
consulted before the 60 Million people who annually change jobs would be
allowed to do so.  And it is easy to imagine that additional restrictions
would soon be placed on job changes.  After all, we don't want deadbeat
dad-tax evading-library book hoarders working in this country, do we?
Likewise the Bank Secrecy Act of 1970, et seq was supposed to end anonymous
bank accounts.  And a lot of the recent porn on the nets agitation has
involved attacks on anonymity.  Suggestions have been made for licensing net
access.  Finally, electronic check proposals are supposed to be traceable
because those who open accounts will be identified.

The readers of this list can apply what they already know about the
difficulty involved in restricting net access to the analysis of these other
existing and proposed restrictions.  The problem with the theory of
transaction blocking is that it requires millions of potential sellers of
goods, services, and jobs around the world to turn away customers.
Something that most people are unwilling to do.

Thus, if some entity tries to control net access by restricting it to
"licensed" users --- a real legal problem in the US BTW --- all that you
have to do is open an account somewhere else on earth and dial out to it or
use a connection via an X25 network.  All the Great Enemy can do is make you
spend a little more money.  Eventually of course, encrypted untraceable
TCP/IP sessions will be possible and domestic ISPs could -- without risk ---
offer "encrypted only" pipes out to the nets.  "Once you get there it's up
to you what you do but we don't/can't know about it."  

Note that soon, millions of people will have high-speed, cable-based,
full-time net access.  These people will be one mouse click away from being
a full-service ISP.  Stick the ISP in a Box BSD CD-ROM in the drive and
double-click on setup.exe.  If the CD-ROM is produced by the right parties,
it will automatically support encrypted TCP/IP.  These millions of ISPs can
offer net-access accounts right away and add dial up later for the neighbors
if they feel like it. 

It is the vast number of vendors and the cheapness of the connection that
makes it so hard to control net access.  The computer and telecoms
revolution has the same effect on banking and other services to which the
authorities hope to block access.

Thus cheap telecoms, computing power, and well-developed electronic funds
transfer systems are easily turned into free banking.  We all know that
every node/user on the net is a potential gateway to another network
(potentially of great size) on the "other side" of his connection.  In the
same way, every user of "cheap, easy, and open" electronic funds transfer
system is a potential bank, a potential money "switch".  The famous Fort Lee
Switch located in Fort Lee, New Jersey at the West end of the George
Washington Bridge is an important switch for the financial funds transfer
networks going into and out of NYC.  Think of it as the IBM 360 running a
proprietary operating system on a somewhat closed loop.  The future open
funds transfer systems will be like the personal computers that can far
exceed the performance of the old monopoly mainframes.  

Since everyone will be able to switch funds (and every *one* includes every
fictitious entity, software agent, corporation, trust, organization, or firm
anyone can create on earth) they will be able to switch funds for anyone
else.  Controlling a system with an almost unlimited number of switch points
will not prove possible.

Individuals and the entities they control can be counted on to protect
themselves from the financial losses occasioned by fraud or theft.  They can
be their own auditors.  But they can't be counted on to forego profit so
that the governments of the world can try and prevent some people from
engaging in mutually beneficial private transactions.

An attempted cartel of that sort --- one that tries to enlist the billion or
so people who will be easily and reliably switching funds within a few years
--- is doomed to failure.  Too many potential 'cheaters.'  Too much money to
be made by breaking with the cartel and offering financial services to
others who wish to use them.

And where money leads, other forms of human interaction will follow.  Once
money is free it can buy, bribe, or finagle it's way past the other
attempted restrictions on voluntary transactions.  

DCF

"If you can figure out a way to keep 1 billion people who have cheap,
powerful, uncensored, computers and telecommunications from being free;
you're a better man than I am Gunga Din."