Escrow Services

["Timothy C. May" <tcmay@got.net>]

At 12:21 AM -0400 9/27/96, Simon Spero wrote:
>On Thu, 26 Sep 1996, Declan McCullagh wrote:
>
>> Anonymity and nonescrowed crypto are the linchpins of AP and its more
>> general case, Maysian crypto anarchy. The withering of the nation-state.
>
>If I might dare a crypto-related comment as well; it also requires an
>absolutely trusted third-party to manage the funds and issue the ecash
>used to pay the murderer, (sorry, fortunate gambler).  The reason why the
>third party must be trusted by both the payers and the gambler, and thus
>cannot be anonymous (only at 'best' pseduonymous) should be obvious.

Do you consider an entity such as "Joe's Escrow--You Slay, We Pay" with an
untraceable BlackNet identity to be "anonymous" or "pseudonymous"? I'd say
it can be made "untraceable," but with a persistent name and reputation.

How does an escrow service (and I mean the classical definition of escrow,
not the newspeak definition used by the U.S. government) survive and
prosper?

By being in the business of releasing funds when conditions are met, and
not otherwise. By not absconding with the funds.

Note that in the real world, escrow services do quite well, because the
continuing future revenue stream from their good reputation exceeds what
they could get by "burning" any particular customer. (Sometimes by putting
up a bond, which is a kind of secondary escrow. Also, escrow services can
be "pinged" (tested) by lots of small transactions. (A lot of similarities
between digital escrow services and digital banks.)

(For more on this--a lot more--see the "escrow" entries in my Cyphernomicon.)

--Tim May



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."