From: Bill Stewart <stewarts@ix.netcom.com>
Date: Sat, 27 Jan 1996 17:01:32 +0800
To: cypherpunks@toad.com
Subject: Re: Crypto Exports, Europe, and Conspiracy Theories
Message-ID: <199601270825.AAA05590@ix2.ix.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


At 01:06 PM 1/26/96 -0600, Alex Strasheim <cp@proust.suba.com> wrote:

>Why aren't foreign companies flooding America with strong crypto?  Well, 
>there are clearly pressures of the sort Tim described at work.  But there 
>are other factors as well:
.....
Among other things, the RSA and other public-key patents in the US,
combined with non-exportability, severely limit the ability of non-US
companies to sell public-key-based software in the US.  Banks often use
moderately-strong crypto (single-DES), and there are some imported 
cash machines which support it, but it's not a big market.  
Other than that, most people don't care much about crypto, and assume that
the password-"protection" that Microsoft products offer is enough for them.

>Digicash is probably the first significant crypto product to be exported
>to America.  

IDEA's pretty significant, though PGP 2.x could have used triple-DES
if IDEA hadn't been available.  The political significance of it being
foreign, or at least non-NSA-tainted, has been somewhat important as well.
Then you could also contend that Shamir, a significant crypto producer,
exported himself to America :-) (I think he's the RSA member who's Israeli?)
(You could also contend that Enigma and Purple were exported to America,
and in Enigma's case, the ability to crack it was mainly Polish and British.)

Digicash is highly significant as an idea, but will only be significant
in reality if they can pull off a successful business strategy
before the market gets saturated with less private solutions that
everyone needs to be backwards-compatible with.

>It's important to note that this extremely important product couldn't
>have been produced here, patents aside.  
>Transaction systems need to be international, and our rules make
> America an unsuitable place from which to launch tranaction software.

Nicely put; I'll have to steal it sometime :-)
#--
#				Thanks;  Bill
# Bill Stewart, stewarts@ix.netcom.com, Pager/Voicemail 1-408-787-1281
#
# "Eternal vigilance is the price of liberty" used to mean us watching
# the government, not the other way around....