From: "Timothy C. May" <tcmay@got.net>
Date: Sat, 16 Nov 1996 14:41:16 -0800 (PST)
To: cypherpunks@toad.com
Subject: Final Solution to the Crypto Problem
In-Reply-To: <199611161913.LAA01571@crypt.hfinney.com>
Message-ID: <v03007800aeb3f127e77a@[207.167.93.63]>
MIME-Version: 1.0
Content-Type: text/plain


At 11:13 AM -0800 11/16/96, Hal Finney wrote:
>>From the article
>	<URL:http://www.sjmercury.com/business/compute/encrypt1115.htm>:
...
>> The key is that the encryption circuitry would be inactive in exported
>> machines, unless both buyer and seller obtained all legally required
>> licenses to turn it on.
>>
>> Domestic customers, and export buyers with a license, would get a special
>> key card to turn on the encryption, according to HP. Manufacturers would
>> thus be relieved of the burden of making different computers for export
>> than for domestic use.
>
>So it sounds like the idea is to build crypto around card tokens.  I think
>HP has been pushing this for some time.  The question is, will this somehow
>become the only way to get access to crypto?

And this is the "nightmare scenario" we have talked of for so long: make a
method ubiquitous, but with bones thrown to domestic users...then take away
the bones.

Namely, once the infrastructure is deployed, once most electronic commerce
is handled via card tokens (and card readers are actually pretty cheap, and
volume will drive the price down further), the President can cite some kind
of national emergency, or widespread tax evasion, or whatnot, to announce
that beginning on suc-and-such a date all cards must be licensed, even to
domestic users.

(Many of us thought this has always been the strategy with supposedly
voluntary programs, which Clipper was, of course. Our principal objection
was not that the FBI would use Clipperphones, but that the technology and
related announcements were quite clearly oriented toward getting lots of
people to use the technology, thus establishing de facto access to keys.)

>It is certainly very disturbing to see these new moves.  Obviously a great
>deal of behind the scenes negotiations and pressure has been occuring.

The history of the whole crypto debate these last several years has been
the history of a series of behind-the-scenes meetings, pressurings, and
eventual cave-ins. In all of the iterations of Clippper, we heard about the
programs after corporate "buy-ins" had occurred. (Though in the case of
Clipper, there were some "trial balloons" floated six months earlier, as
you may recall.)

The only hope I see is that in each of these iterations, a different set of
companies got burned by the experience: AT&T, TIS, IBM/Lotus, and now the
latest round of players. (Each of these losers from defunct early rounds of
the Great Clipper Race must feel jilted.)

This one may be the Final Solution to the Crypto Problem, given the
building crescendo of crypto news, the new Congress and new term for the
President,  and the simultaneous announcement of the new Emergency Order
and the RSA-HP-Intel-Microsoft-etc. deal. Hardly coincidental.

Be afraid. Be very afraid.

--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."