From: "Timothy C. May" <tcmay@got.net>
Date: Thu, 17 Oct 1996 09:15:34 -0700 (PDT)
To: cypherpunks@toad.com
Subject: "Stopping Crime" Necessarily Means Invasiveness
Message-ID: <v03007800ae8c159eaa82@[207.167.93.63]>
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There are several swirling threads about the development of crypto systems
(e.g., "binding cryptography," "key recovery," "one-way traceable e-cash")
that are designed to allow law enforcement some ability to track illegal
transactions, catch some criminals, etc.

Lucky Green and I had a brief discussion of this at my party last Saturday.
Specifically, about the reasons some folks are avoiding "true" digital
cash, as described in Chaum's papers of the mid-80s, in favor of "crippled"
digital cash. We both agree that _any_ system which allows government to
act to trace a transaction, or to trace a message, or to gain access to
keys, essentially throws away the liberty-enhancing advantages of
cryptography completely.

That this is so, logically, is almost completely self-evident. If this is
not, ask yourself whether the government of Myanmar, known as SLORC, would
not use its "Government Access to Keys" to round up the dissidents in the
jungle. Would Hitler and Himmler have used "key recovery" to determine who
the Jews were communicating with so they could all be rounded up and
killed? Would the East German Staasi have traced e-cash transations? For
every government extant on the planet, even apparently benign government
such as that in the Vatican (*), one can easily think of dozens of examples
where access to keys, access to diaries, access to spending records, etc.,
would be exploited. (* And speaking of the Vatican, there's that little
matter of Michael Sindona, Banco Ambrosiano, links to CIA funds in BCCI,
and the body found swinging from the bottom of Black Friar's Bridge in
London. They're  just another power player, with a lot of interest in
financial matters. Some say the whole "confession" system worked for a
millenium as a surveillance and espionage system without peer.)

Any proposal to force traceability of transactions must deal with this
reality. What the government considers "criminal" or "suspicious" is often
what they consider threatening to their exercise of power, or even of their
particular time in power (e.g., the Democrats and their 900 FBI files
circulating throughout the White House, looking for dirt on their
"enemies," the Republicans. Do you really want Craig Livingstone having
GAK?).

The recent talk about "catching criminals" misses this point, that
governments typically use surveillance powers to control citizens. (Note: I
would think Dutch residents should be especially sensitive to this concern,
given what happened to them in WW II, when the arriving Nazis used
telephone records to locate Jews for extermination. Until recently, Holland
had a tendency to carefully think about such issues---I believe phone calls
were billed in such a way as to not keep such records, for example).

Yes, true digital cash--the fully untraceable form originally
discussed--will allow some new channels for criminal activity. Privacy has
its price. The ability of people to plot crimes and commit crimes behind
closed doors is obvious, and yet we don't demand secret cameras in homes,
apartments, and hotel rooms! A point we often make, but one we should
always remember.

And full untraceability--the necessary criterion for something to be really
called "cash"--also stops other kinds of crimes, particularly government
crimes.

As to fully untraceable digital cash--the real e-cash--we may be the
carriers of the torch for this. For whatever reasons, David Chaum is
backpedalling on his original points, and is making pro-traceability
noises. However, various persons on this list have pointed out that "coin
mixes" and other such methods can restore the full untraceability even of
Chaum's present system.

So, there is hope.

--Tim May

"The government announcement is disastrous," said Jim Bidzos,.."We warned IBM
that the National Security Agency would try to twist their technology."
[NYT, 1996-10-02]
We got computers, we're tapping phone lines, I 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,
Higher Power: 2^1,257,787-1 | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."