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Re: Meeting notes from ANSI X.9 Meeting on Electronic Payment

>        It doesn't appear that these people seem to care about
>cash-like anonymous token-based payment schemes. Is that a valid
>assesment? What is needed to make these people start caring about

My guess is, they won't. Ever.

<Elmer Gantry Mode On>
We're looking right into the maw of the beast, here, folks. This is how
book-entry systems want to rule the world. It seems to me that all this
X.BlaBla stuff is about interlocking directories, offsetting book-entries
and audit trails back to the flood, so that if you break a trade, much less
evade taxes or engage in other horsemanlike behavior, they can sic the
Lawfully Deputed Authorities to slam you in the pokey.
<Elmer Gantry Mode Off>

Code words for this bunch include "non-repudiation", "Certification
Authorities", "X.Whatever", and of course "information infrastructure", and
is done usually in concert with, well, lawyers.

Michael Froomkin has had some experience with these types already this
month, and my anonmyous informant, "Erwin Corey" , the world's foremost
authority, is in the thick of these things.

I just got some mail from someone over at bnn who gave me the following
argument, just to show how they think:

1. If we use internet-level (ISP) or link-level (SSL,etc) strong
cryptography, governments can't keep an eye on the 4 horsemen, who would
then rule the world, and the government needs to save us from that.

2. If we just use encryption for the "little" stuff, like credit card
numbers, and signatures, and wire authorization codes, and the like, the
Powers that Be will let us play with money on the internet.

3.  So, go back to your sandbox boy, and let the adults get on with the
Important Stuff, okay?

Actually, argument #3 is implicit in all of this, but that's okay. Here's why.

As one cursed with hyper-analogizing the universe, I see the X.whatever
crowd as centralized surface transport, viz: Railroads and Ships. We're in
the car and plane business, point-to-point, autonomously operated by the
users of the technology for whatever they want to do.

The time is, say, 1910. They look up in the sky at the airplanes rattling
around, or they jump out of the way of a Model T clattering down the
street, and they mutter, "let the adults get on with the Important Stuff".

What they really don't understand is that the internal combustion engine of
internetwork commerce, digital bearer certificate technology, is about to
rock their world.

The thing I hear over and over from these people is, "We just want to map
all this great experience we have with the Law of Commerce onto the
Information Superhighway, so we won't have to reinvent the wheel."  They
can't understand why *anyone* would want to remain anonymous. They can't
imagine the benefits of uncontrolled autonomous agents, buying or selling
things, (including themselves) in a global ecology of networks and silicon.

Just like the transportation magnates of the turn of the century couldn't
understand why someone wouldn't use a steam engine, because they're much
more efficient thermodynamically than any internal combustion engine could
ever be. The technology lends itself to economies of scale, and, well, it's
lest wasteful that way. This is why J.Pierpont Morgan made a fortune
consolidating railroads and steel companies.

These people are just victims of their own success, really. They are the
end products of years of meritocratic selection, schooling, and
certification.  They have been practically bred to inhabit the top of

So, when they look at the internet, they can see nothing else but what they
know. They see something like digital cash an anomaly, an error in the
data, because even with a completely on-line system and Mark Twain Bank
walking very gingerly on the thin ice of new economic technology, MTB's
cost on a Digicash trade is $.50, while the most efficient book-entry
system on the net, First Virtual, has to charge, what? $5.00 to break even?
Wait until we can actually trust off-line payment schemes for *really*
small stuff, and get profits from issuing nano-money.

They don't get it. The network isn't a hierarchy. The network is a
geodesic. You don't need offsetting book entries, you can trade digital
certificates much cheaper. You don't need to control your software, you
need to make it autonomous and set it free.

Bob Hettinga

Robert Hettinga ([email protected])
e$, 44 Farquhar Street, Boston, MA 02131 USA (617) 958-3971
"Reality is not optional." --Thomas Sowell
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