From: rah@shipwright.com (Robert Hettinga)
Date: Fri, 5 Apr 1996 23:38:22 +0800
To: cypherpunks@toad.com
Subject: Wired didn't like this one....
Message-ID: <v02120d03ad8ab73d36b6@[199.0.65.105]>
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Reply-To: rah@shipwright.com (Robert Hettinga)
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From: rah@shipwright.com (Robert Hettinga)
Date: Thu, 4 Apr 1996 21:21:19 -0500
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To: Multiple recipients of <e$@thumper.vmeng.com>
Subject: Wired didn't like this one....

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 ...but I like it. Said it was a little too "fast paced". (For WIRED???)

I'm starting over on another, so you guys might as well see this one...

It *was* supposed to go into their Idees Fortes (Or, as my brother Mike in
Albuqerque says, in his best Jose Jimenez, "Stron' Gideas") section. Now
something else is, once I write it. Feh!

It's 800 words. Exactly.

Cheers,
Bob Hettinga



  ------------------------
Geodesic Capital?

Robert Hettinga

I've just finished a bit of anonymous consulting on the net for an
anonymous client, being paid, of course, in anonymous digital ecash(tm). I
could just store it, offsite even, anonymously. But, I'm saving it for that
special retirement habitat in the Belt ("Gerry's Habitats, Inc.: Pie in the
sky, Nano-Built(tm) *before* you die!"). I have to *invest* it somewhere.

I buy a page of mutual fund reccomendations from a LipperBot(tm). In my
case, I just want to buy a broad market index, say, the (ahem) Hettinga
Million(tm), and shop around for the fund server which approximates closest
the HM's price over time. I link to the server, and buy anonymous bearer
certificates for that server's HM fund.  Later, when I cash in my
certificates, I have enough appreciated capital to buy the custom Bernal
sphere of my dreams. Of course, if my tolerence for risk is higher, I could
buy shares from a fund manager (bot or otherwise, no way to tell with
anonymous cash markets) with a hot hand for picking stocks.

OK. Say I don't actually *save* money.  I'm someone who borrows money for
very short term "assets" like resturaunt meals, and pays the incurred debt
off over the long term at some userous interest rate. How do I do this?

I issue a personal digital bearer bond for the amount of the transaction.
All I need is someone to underwrite the risk. Fortunately, I always have an
efficient real-time market to auction it into, one that always knows my
payment reputation, thanks to all those money-bots in the ubiquitous
network. Voila'! Bring on the chateaubriand for one, waiter, and don't
spare the bearnaise, all this thinking about money's made me hungry.


What we're talking about here is nothing new, of course. We've had trade
ever since we've had artifacts. The ancient "red-paint" culture was just a
trading network which ran around the north Atlantic from New England to as
far as Ireland. So much for the "New" World.  The oldest surviving
Babylonian money is a piece of clay saying "three cows" wrapped in a clay
"envelope" saying something like "three cows, payable on demand, so say I,
(signed) Joe Nebbuchenazzar". This happened shortly after writing was
invented, which was actually invented for *accounting*. Mechanical
signatures like chops and seals have been around since. Digital signatures
and bearer certificates are just a new implementation of some *very* old
stuff.

Ornate paper certificates, representing shares in companies, or actual
stuff, was physically traded for other ornate paper certificates (cash), or
actual stuff, at places like the famous buttonwood tree on Wall Street.
Pretty soon people didn't have to be there to trade. We built fast
industrial communications (staged horsemen or coaches, then ships or
trains, then telegraphy, then telephony) but we still had slow switches
(people), so we had to build all the communication/organization/market
hierarchies we know and love today.  In addition, the power of the state
(another industrial communication heirarchy) provides a sizable argumentum
ad bacculum for people who repudiate trades. If you don't pay, I throw you
in jail.

Like every thing else, Moore's law changes that.  Proportionately,
semiconductor switches get more and more cheaper than lines, so the
telephone network is no longer a hierarchy. Nodding to Buckminster Fuller,
Peter Huber called it the "Geodesic Network", the title of the 1986
government report he wrote describing it.  Ironic. I'm here saying this in
a magazine founded by deciples of Stwart Brand, himself a one-time
Fullerite. All threads lead to Bucky.

When you combine a geodesic network with strong cryptography, you get a
geodesic economy, which needs geodesic capital. Just change the size of
players in either equity or debt scenario, and you're looking at what any
large business organization does today. The only thing you're missing is
how to deal with non-repudiation. If the state can't tax transactions or
financial assets because strong crypto makes them all invisible, states
can't exist, much less "bacculize" very well. The solution is the same it
ever was: reputation. J. Pierpont Morgan said, when hauled before Congress
one afternoon, "Character, sir. I wouldn't buy anything from a man with no
character, even if he offered me all the bonds in Christendom." In a
geodesic economy, reputation is abstracted to keys, not people.

Geodesic capital scales up to bigger stuff than we can do now. A chaotic
hoarde of autonomous money-bots swarms on the minutia of the necessary
financial complexity. It also scales *down* as processor prices fall. Real
time, MicroMint(tm) cash-on-the-router-head auctions for packet switching,
anyone?


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-----------------
Robert Hettinga (rah@shipwright.com)
e$, 44 Farquhar Street, Boston, MA 02131 USA
"Reality is not optional." --Thomas Sowell
The e$ Home Page: http://thumper.vmeng.com/pub/rah/