From: Robert Hettinga <rah@shipwright.com>
Date: Sat, 14 Nov 1998 14:33:55 +0800
To: "dbs" <dcsb@ai.mit.edu
Subject: Re: DBS, Privacy, Money Laundering nonsense.
In-Reply-To: <000001be0c04$5f604620$0100a8c0@p180.Workgroup>
Message-ID: <v04020a0bb272c92279c7@[139.167.130.246]>
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At 11:57 PM -0500 on 11/13/98, Black Unicorn wrote:

> If only we could be rid of this pesky cash would could eliminate organized
> crime forever.

Reminds me of something Vinnie Moscaritolo, my alter ego and Samoan attorney,
once said.

"'If we could just pass a few more laws' we could all be criminals."


Nonetheless, I think that DBS will be much more about economics than privacy
or even law. The contrapositive of Unicorn's excellent rant is that the market
for money "laundering" and financial privacy is a rediculuously small fraction
of the market for economic efficiency.

That digital bearer settlement gives us more or less perfect financial privacy
if done under certain conditions is much more a happy accident than anything
else, just like the cheapest way to do a transaction prior to blind signatures
and hash collisions was with book-entry transactions instead of paper bearer
certificates.

I suppose it *might* turn out that you really *can* do an instantaneously
executing, clearing, and settling on-line realtime book-entry transaction,
for everything from pico- to quadridollars, and it would be cheaper, both
macroeconomically and microeconomically, than a digital bearer one, but I
just don't think it's possible at all.


And, of course, we wouldn't have coach fare to Cleveland without a bunch of
"fanatics" out there, prattling away about slipping the surly bounds of earth,
the joy of flight, and all that... ;-).


Thank god for the "fanatics", I say, but let's make sure we pay attention to
Bill Bradley's adage that it's bad luck to be behind at the end of the game.

Whatever is cheapest while still remaining a functional bearer protocol
wins, in other words.

And, in my book, "functional" means "functionally anonymous". It's just
cheaper that way. Having a plane that actually flies is way cheaper than
one which just goes fast down the runway, or even one which scoots along
nicely off the ground, but only in ground effect.

Cheers,
Bob Hettinga

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-----------------
Robert A. Hettinga <mailto: rah@philodox.com>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'