From: Bill Stewart <stewarts@ix.netcom.com>
Date: Sun, 24 Mar 1996 17:35:10 +0800
To: Gary Lee Jeffers <gjeffers@ns.htc.net>
Subject: Re: e$'s (mini-rant)
Message-ID: <199603240924.BAA27180@ix5.ix.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


At 01:00 AM 3/24/96 -0600, Gary Lee Jeffers <gjeffers@ns.htc.net> wrote:
>              e$'s (mini-rant)
>   I have some thoughts on John Humphrey's post. I thought the big problem
>with E$ was with the clearing house. Is it the consensus that it is the e$
>patents?  If the problem is that the inventors are sitting on their
>patents, then why can't we just RIP THEM OFF$

Yes, it's the patents.  Chaum owns them, and he's not Easy To Do Business With.
On the other hand, a couple of banks _have_ recently started doing business
with him - Mark Twain Bank in St. Louis, and Merita Bank in Finland - check the
cypherpunks archives (www.hks.net / nntp.hks.net) for details.  There were a
couple of earlier attempts, in which one group discovered that there are an
appalling number of banking laws which make it hard to get a real bank started,
and another group discovered that it's much easier to be a Credit Union than
a Bank under US banking law, but it's still hard to get a business model
that's likely to make non-negative amounts of money that way.

The reason you can't just rip them off (unlike, say, PGP's early relationships
with RSADSI/PKP) is that electronic commerce can only work well if it's
legitimate -
if you want real businesses to deal with you, and real banks to handle money 
for you, they need to be assured that they won't lose their assets in a
patent lawsuit.
On the other hand, Doug Barnes posted some interesting articles on
"agnostic banking", a variant on Chaum's digicash where the bank
can run simpler digital cash protocols that don't violate Chaum's patent,
but the bank can't tell whether the customer is using Chaum's blinded signatures
or not, so the customer can rip off Chaum's intellectual property without
the bank having to be knowledgeable or involved (nudge, nudge, wink, wink.)

On a non-financial level, Chaum didn't complain about the Magic Money / 
Tacky Tokens demos that some of the cypherpunks did, and Digicash came out with
a play-money version that some of us used before the commercial deal was done.

> [patent rant]
Yeah, yeah, many of us can rant against patents as well.  Been there, done that,
even invented stuff and found somebody else had previously invented and
patented it.
The League for Programming Freedom has some high-quality detailed patent rants,
and if you give RMS a grant for airfare he'd probably be happy to go picket
Chaum's company for you :-)

As far as Chaum hoarding the patents, he's always been willing to deal,
but since he's mostly an academic rather than a businessman, he's set a very
high up-front price so little guys don't bother him, only mega-banks that will
come now that he built it.  I'd guess the prices the banks he's now dealing
with paid
are rather lower than that, but it's a start for getting real business to
evolve.

#--
#			Thanks;  Bill
# Bill Stewart, stewarts@ix.netcom.com, +1-415-442-2215 pager 408-787-1281
# "At year's end, however, new government limits on Internet access threatened
# to halt the growth of Internet use.  [...] Government control of news media 
# generally continues to depend on self-censorship to regulate political and
# social content, but the authorities also consistently penalize those who
# exceed the permissible."  - US government statement on China...

"SigFiles of Unusual Size?  I don't believe they exist!"