From: mpd@netcom.com (Mike Duvos)
Date: Tue, 24 Oct 95 22:53:32 PDT
To: cypherpunks@toad.com
Subject: Re: Mark Twain Bank (was: Anonymity: A Modest Proposal)
In-Reply-To: <199510241356.GAA01427@jobe.shell.portal.com>
Message-ID: <199510250551.WAA29912@netcom12.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


Someone writes:

 >My
 >understanding is that the _bank account_ is FDIC insured, but not
 >the ECash. I could be wrong -- their materials are extremely confusing
 >and hard to follow.

I read the entire lengthy contract and found quite a few things
which appear to be designed to cover the bank's posterior.

1.  Both parties stipulate that their relationship is a 
    business relationship and not a fiduciary relationship.

2.  Your account is not FDIC insured. 

3.  The bank accepts no liability for anything going wrong, 
    although it may, at its sole option, attempt to make
    ammends.

4.  Parties agree to wave a jury trial.

5.  Parties agree to binding arbitration. 

6.  General waffling to the effect that the tiny fees collected
    imply an equally tiny responsiblity and potential liability
    on the part of the bank.  

Now most of this language also appears in the fine print of the
First Virtual agreement, so it is not like you have an option
of trading on the Internet under the rules which govern your
ordinary checking account. 

One wonders whether signing away all responsibilty on the part of
the bank is going to be the standard for using digital money
on the Internet, or whether consumers will demand protection
when using these new services.  

One has to be careful that when new technology replaces old, the 
privacy protection which applied to the old also applies to the
new.  Good examples of this in the past are the ways in which the 
rights you have to the privacy of paper mail generally fail to 
be extended to Email, and of course "regulation E", which exempted
bank accounts which were capable of Electronic Funds Transfer from
a great deal of the protection which used to govern users of
ordinary checking accounts. 

On the brighter side, Dr. Chaum's success in convincing someone
to back DigiCash with actual US dollars certainly makes advances
in breaking public key cryptography worth a great more than the
tiny prizes currently offered by RSADSI. 

It will be interesting to see how this all works out in the
next few months.  Arjen Lenstra is planning on factoring RSA-130
on the Web for a high performance computing conference later this
year.  This should lead to some very robust estimates for the
amount of computing power needed for GNFS to break 512 bit PGP
keys.  

Does anyone know the details of the DigiCash protocol, or how
much computing power it would take someone to make counterfeit coins?  

--
     Mike Duvos         $    PGP 2.6 Public Key available     $
     mpd@netcom.com     $    via Finger.                      $