Cyphernomicon Index
Cyphernomicon 12.16

Digital Cash and Net Commerce:
Novel Opportunities

  12.16.1. Encrypted open books, or anonymous auditing
           - Eric Hughes has worked on a scheme using a kind of blinding
              to do "encrypted open books," whereby observers can verify
              that a bank is balancing its books without more detailed
              looks at individual accounts. (I have my doubts about
              spoofs, attacks, etc., but such are always to be considered
              in any new protocol.)
           - "Kent Hastings wondered how an offshore bank could provide
              assurances to depositors.  I wondered the same thing a few
              months ago, and started working on what Perry calls the
              anonymous auditing problem.  I have what I consider to be
              the core of a solution.
              ...The following is long.... [TCM Note: Too long to include
              here. I am including just enough to convince readers that
              some new sorts of banking ideas may come out of
              "If we use the contents of the encrypted books at the
              organizational boundary points to create suitable legal
              opbligations, we can mostly ignore what goes on inside of
              the mess of random numbers.  That is, even if double books
              were being kept, the legal obligations created should
              suffice to ensure that everything can be unwound if needed.
              This doesn't prevent networks of corrupt businesses from
              going down all at once, but it does allow networks of
              honest businesses to operate with more assurance of
              honesty." [Eric Hughes,  PROTOCOL: Encrypted Open Books,
  12.16.2. "How can software components be sold, and how does crypto
            figure in?"
           + Reusable Software, Brad Cox, Sprague, etc.
             - good article in "Wired" (repeated in "Out of Control")
           - First, certainly software is sold. The issues is why the
              "software components" market has not yet developed, and why
              such specific instances of software as music, art, text,
              etc., have not been sold in smaller chunks.
           + Internet commerce is a huge area of interest, and future
             - currently developing very slowly
             - lots of conflicting information...several mailing
                lists...lots of hype
           + Digital cash is often cited as a needed enabling tool, but
              I think the answer is more complicated than that.
             - issues of convenience
             - issues of there being no recurring market (as there is
                in, say, the chip doesn't get bought
                over and over again, in increasing unit volumes)

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