Re: Mondex vs. Digicash (was: Godzilla vs. Mothra)

[rah@shipwright.com (Robert Hettinga)]

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To: rah@shipwright.com (Robert Hettinga), www-buyinfo@allegra.att.com,
        ecm@ai.mit.edu, bsdc@ai.mit.edu
Cc: hallam@w3.org
Subject: Re: (cpx) Mondex vs. Digicash (was: Godzilla vs. Mothra)
Date: Mon, 23 Oct 95 12:06:43 -0400
From: hallam@w3.org
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Reply-To: hallam@w3.org


Some comments on the comments:


> The availability of Digicash in the US, for real, with spender
  anonymity, will be announced very soon; reporter activity on
  this subject is consistent with an embargoed press release for
  Monday or Tuesday. From posts to the list it's clear that a fully
  working system, ready for customers, will be announced.

The avbilability in the US I don't consider as meaning much one way or
the other. Mondex is avaliable in Swindon in the UK, a very large and very
serious real world trial.

More importantly Mondex has Wells Fargo Bank behind it and NatWest and HKSB,
these are major league players with very tight coupling, cross ownership of
subsidiaries etc.

> When doing market research on this subject, it became clear that
  low-value payments are largely going to be used for impulse
  purchases. If the Digicash system allows people to set up their
  accounts without getting out of their chairs (which I suspect will
  be the case, if they do it right), it will initially get more
  adopters.

DigiCash will be limited to the Internet, Mondex is genuine cash, it allows
offline purse to purse transactions.

> One or both systems could be found to have serious security problems;
  who knows what the outcome of their discovery & exploitation would be?
  I know at least one group of people who believe they have a good line
  on a serious security problem in Mondex.

If they have the specs they are under an NDA. If you know people who know a
problem tell them to get in touch with Tim Jones, they are very keen to get the
best security possible.

I'm not sure that the conventional "publish everything" dogma of cypher
types is
valid. I don't think they are relying on security through obscurity, they
simply
want it in addition. Mondex is designed with two security schemes to be
exchanged at overlapping four year intervals.

> Even if the Mondex hardware were given away for free, think how
  much fun it is for the average user to add a new piece of hardware
  to their machines... ever install a sound card and CD-ROM drive on
  a PC? I remember reading something like 20% of all "multimedia"
  kits were returned, largely due to user install problems. If there
  is a competing method that costs the same and _doesn't_ require
  the hardware, people will tend go with this.

They need it to be plug 'n play. I expect this to happen.

> In my conversations with state and federal regulators, it is clear
  that it _is_ possible to issue spender-anonymous e-cash. If you ask
  them, "Hey, can I create fully anonymous digital cash?", they go
  apeshit, but if you explain that the money uses existing (auditable)
  channels going in, and existing (auditable) channels going out, and
  that only spenders are anonymous, they relax considerably. They may
  change their minds later, but we're about to get an existence proof.

All I know is that at the mention of DigiCash bankers start muttering
Regulation
E.

> It's not clear that _either_ system is going to win completely in
  the next 10+ years. Although there's been considerable shakeout in
  the last ten years, there is still a huge variety of non-electronic
  payment methods -- how can you be so sure that Mondex will win over
  Digicash, and that they won't co-exist like, say, money orders,
  currency and cashier's checks (three instruments with both similar
  and dissimilar attirbutes)?

Quite probable, except that Mondex is a very credible scheme with very
large and
very established names behind it. I haven't heard of Mark Twain bank. I don't
say that this predetermines the outcome, just that there are reasons why one
might have an advantage.


                Phill H-B
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-----------------
Robert Hettinga (rah@shipwright.com)
Shipwright Development Corporation, 44 Farquhar Street, Boston, MA 02131
USA (617) 323-7923
"Reality is not optional." --Thomas Sowell
>>>>Phree Phil: Email: zldf@clark.net  http://www.netresponse.com/zldf <<<<<