From: tcmay@got.net (Timothy C. May)
Date: Fri, 5 Jul 1996 17:48:34 +0800
To: cypherpunks@toad.com
Subject: Re: ecash thoughts
Message-ID: <ae02088a04021004ce8f@[205.199.118.202]>
MIME-Version: 1.0
Content-Type: text/plain



First, I'm not very convinced that probabalistic payments are needed. And
I'm mostly convinced that most users of digital money will be skeptical
too.

A few comments:

At 9:18 PM 7/4/96, Steve Reid wrote:

>Suppose someone is surfing the web or whatever, and various sites are
>charging, say, 0.1 cents per web page, via probabilistic payments.
>Suppose there is a 1 in 10 chance that the person will pay 1 cent.
>
>The person wanders around the web, acting as though he's perfectly willing
>to pay, and participating in the fair coin tosses. Except, he really has
>no intention of paying. He will gain free access to 9 out of 10 sites, and
>on the ones that he loses the 1/10 gamble, he just backs out of the deal
>and doesn't pay anything. The end result is that instead of seeing all of
>the web at 0.1 cents per page, he sees 90% of the web completely for
>free. If everyone does this, the sites will go broke.

I cannot imagine _any_ protocol for probabalistic payments which "allows"
someone to back out of the deal once they've seen the outcome of the coin
toss (or whatever). That just makes no sense. Exactly how the deal works to
force completion is another matter (maybe escrow, maybe the symmetric
payment scheme described here recently, etc.).

>The obvious solution would be to require that the person pay the 1 cent,
>then if he wins the 9/10 bet, he gets the 1 cent back. But that will just
>move the problem from the user to the server- the site can welsh on the
>bet and refuse to pay back the one cent. They will get ten times the
>payment that they are supposed to get.

Reputations matter, too, so sites or customers who renege will have their
reps diminished, in the ways we talk about so often here. (Analogies in the
physical world today: casinos who fail to pay off winnings, customers of
casinos who fail to pay off their markers, etc.)

I don't believe probabalistic payments have any special problems with
renege rates. However, I also don't think this is a promising area.

--Tim May

Boycott "Big Brother Inside" software!
We got computers, we're tapping phone lines, we know that that ain't allowed.
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Licensed Ontologist         | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."