Re: Crypto Exports, Europe, and Conspiracy Theories

[Alex Strasheim <cp@proust.suba.com>]

There's a lot I don't know about the NSA, Tim's original post in this
thread reminded me of that.  I don't know if they'll continue to be
successful supressing crypto -- perhaps (probably?) I've underestimated
them. 

But I think networking is creating an enormous commercial demand for 
strong crypto that didn't previously exist.  It's one thing to suppress 
an esoteric technology that few people feel the need for;  it's quite 
another to suppress a reasonably well understood technology that everyone 
feels they need to run their businesses.

The NSA is powerful, but so are commercial interests.  I tend to think 
that the money will win out in the end, but I have to admit that I don't 
know enough about the NSA to have a serious opinion.

Why aren't foreign companies flooding America with strong crypto?  Well, 
there are clearly pressures of the sort Tim described at work.  But there 
are other factors as well:

o	Crypto has only recently become useful/necessary to lots of
	business people -- the demand from crypto is born out of the
	networking boom, especially the Internet, which isn't picky
	about who can use it.  American software companies dominate 
	the industry -- they grabbed market share in the days before 
	crypto was vital.  There's inertia at work.

o	Crypto isn't at the top of the list of factors when people pick
	software.  Do most of use use 40-bit downloadable Netscape's
	or Mosaics with strong crypto?  Netscape wouldn't be easy to
	pick off for New Delhi programmers (an understatement, of course), 
	and crypto wouldn't give them as big of an advantage as it probably
	ought to.

o	Most foreign countries aren't wired as well as we in the US are.
	Most people in Switzerland don't have cheap easy access to the net,
	for example.  That's one reason that the web, a good Swiss idea, has
	been developed primarily in this country.  America has more people
	thinking about the net than other countries do, and it's not 
	surprising that we're out in front in net software.

These factors are short lived, and they're not going to keep crypto out of
America forever.  (That doesn't mean the NSA can't -- although I don't 
think they can.)

Digicash is probably the first significant crypto product to be exported
to America.  It's not very popular yet, but I think that most of us here
agree that it is, in potential at least, as significant as
Mosaic/Netscape.  It's important to note that this extremely important
product couldn't have been produced here, patents aside.  Transaction
systems need to be international, and our rules make America an unsuitable
place from which to launch tranaction software.

Will the NSA be able to stand up against growing economic pressures?  I 
don't know.  But it does seem pretty clear that those pressures are 
building all the time, and that the problem of supressing crypto in 1996 
is a much tougher one than it was in 1986.

In general, it's myopic and ill advised to focus on one factor -- 
economics, politcs, the national security establishment -- when trying to 
predict what will happen.  I've probably been guilty of placing too much 
emphasis on money, and not enough on the NSA.

We do seem to be winning, though.