From: tcmay@got.net (Timothy C. May)
Date: Thu, 30 Nov 1995 12:01:20 +0800
To: cypherpunks@toad.com
Subject: Re: ecash lottery (Was: ecash casino)
Message-ID: <ace2609d04021004758e@[205.199.118.202]>
MIME-Version: 1.0
Content-Type: text/plain


At 1:20 AM 11/30/95, Ian Goldberg wrote:

>[Disclaimer: The following post is a gedanken experiment.  It should not
>                be interpreted as condoning or encouraging anyone to break any
>                laws, no matter how stupid the laws are.]

I, on the other hand, have no compunctions about "condoning or encouraging"
various kinds of actions. When condoning and encouraging becomes criminal,
I hope I'll be gone. (Wiseacres will cite hypos in which encouraging a
crime, such as a rape, makes the encouragers culpable. A far cry from
condoning and encouraging tax evasion, gambling, etc.)

On to Ian's proposal:

...
>Now: there's likely no Web-of-Trust to the various PGP keys involved,
>so the lottery's Reputation will have to be built up.  A good way to
>do this is to have smaller prizes being won fairly often (e.g. by matching
>the last digit/few bits), so that it's obvious the lottery is not just
>collecting money without awarding prizes.

Have to be _very_ careful here. A variety of scams can be developed which
show lots of "small" winners, but which fail to show any large winners. The
lottery operators can make a lot of extra bucks by simply not paying off
the large winnings, in various ways.

More robust protocols may be possible. In particular, I recall that Eric
Hughes was working on something he called "encrypted open books." While
banking was the obvious domain, it seems plausible that the same
methodologies could be adapted for lotteries (some isomorphisms between
accounts/balances and tickets/winnings?).

I don't follow Ian's proposal in enough detail to comment on it, but
thought I should point out the scams over nonpayment of winnings and the
"encrypted open books" notions (from sometime in '93, as I recall).

Personally, I have long had great _hopes_ for using crypto for
non-sanctioned gambling, but I'm pretty skeptical that many people will do
it. For one thing, anyone knowledgeable enough to be comfortable with the
crytography knows that gambling when a house cut exists is a lose. (And
gambling with no house cut is, at best, a wash.)

--Tim May

Views here are not the views of my Internet Service Provider or Government.
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
Corralitos, CA              | knowledge, reputations, information markets,
Higher Power: 2^756839      | black markets, collapse of governments.
"National borders are just speed bumps on the information superhighway."