From: Jim Choate <ravage@ssz.com>
Date: Mon, 29 Sep 1997 13:24:43 +0800
To: cypherpunks@ssz.com (Cypherpunks Distributed Remailer)
Subject: Re: Remailers and ecash (fwd)
Message-ID: <199709290525.AAA10918@einstein.ssz.com>
MIME-Version: 1.0
Content-Type: text



Forwarded message:

> Date: Mon, 29 Sep 1997 00:43:20 -0400
> From: "Robert A. Costner" <pooh@efga.org>
> Subject: Re: Remailers and ecash

> The first answer I got was so that remailer reliability could increase.
> The theory as I understood it was that remailers were run like a hobby, not
> a business, so the money would be an incentive to bring in professionalism.
>  So I proposed, and documented, that the minimum level to achieve this
> would be a $50K investment over a year's time.  This is in fact, more or
> less what the Cracker remailer takes to run.  Most of the resources are
> donated in some way, but this is their equivalent retail value.  Even so,
> with Monty's pricing structure and Cracker's current level of traffic it
> would be enormously profitable.

I have to disagree on the annual cost to run. Considering the load of
remailers a simple ISDN would be sufficient. With that instead of a T1 it
takes less than $1,000 a month to operate a machine full-time. Approximately
1/4 of your estimate. I agree further that remailers COULD make a profit
under current conditions IF the financial institutions accepted anonymous
transactions (let's not even get into the LEA's and tax agents) from both
source and destination; they don't. I personaly found the legal issues the
most daunting considering my income and cash reserves. It would not take
more than one or two nuisance suites to put a small operator out of the
game permanantly. One of the critical aspects of successful small business
operation is a stable financial environment, I don't think you can have that
visiting the lawyer every few weeks.

> In my opinion, and I've been known to be wrong, this is a seriously messed
> up comment.  A quarter per message is too much, much less a quarter per
> hop. A price of 1/100 of a penny per message is closer to a proper
> valuation.

This is larger than my guess at a fair market per msg value. Considering
your price does your remailer get enough traffic to pay your $50k a year?

> But the problem here is in the pricing model.  It should not be
> transactional unless to encourage the very casual user.  A pricing model
> should be flat rate.  One price for a month, or even a year's service.

Of coure it should be transactional and the only way to get it going full
speed is to grab the casual user. Consider that an email is a transaction,
it isn't like a phone line that may actualy handle many users over a given
time. Email has one source and one to many destinations. The problem with
flat rate is it underestimates the impact of large remailings when the
population is itself millions. Furthermore, under a flat rate model each
remailer in the chain gets less if the number of remailers grows. This runs
contrary to what the user wants for anonymity retention which is a lot of
links in the chain. The user should be the one to decide how many and how
much that is worth to them.

> The
> net is based on a peering price structure, not an inter-lata structure.
> Trying to compute or add charges at each hop is against the nature of
> information flow for the net.

It sounds to me like what you are saying is that since email (a one-time
event) is a service of the Internet, however the Internet (a long-term
structure of computers forming backbones with more transient leaf nodes) can
survive flat rate pricing because the limitations of a piece of hardware are
known and can be figured in. The number of users and the amount of remailing
can't necessarily be known before hand. Furthermore, assuming a commercial
model I would certainly have saturating my pipes a goal.

> There is some truth in this statement.  But there are also remailers run by
> a variety of companies such as hotmail, juno, and the like.  They encompass
> millions of users.  Millions of users who want a remailer, but will not
> tolerate the level of entry required for a Type-I or Mixmaster remailer.
> Until client software can be improved and made as easy to use as an
> integrated spelling checker, the "advanced" remailers will have no true
> market share.  (Oh, I forgot.  Most of the world uses email clients without
> integrated spell checkers.)

It further seems to me that to make that software simple and easy to use a
lot of 'decisions' have to be made for me. That indicates to me some sort of
standards and the implied organizations that set them for the remailers.

And contrary to what some would have you believe, those organizations and
standards do not necessarily imply great submissions on the part of the
participants indipendance. Consider the types of questions that needed to be
answered to get the CDR up and going. Such an organization would probably
suffice for the initial boot-strap.

    ____________________________________________________________________
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