5 ms·

I think the author is very intelligent and very bad at compelling narratives. Yeah, the story's complicated, but it's not that complicated. I've seen much more

I think the author is very intelligent and very bad at compelling narratives. Yeah, the story's complicated, but it's not that complicated. I've seen much more complicated stories written much more clearly. I wish they would stop mentioning all these tangents and asides, and just get to the point of why a strong cryptographic system can't be implemented for money, who is stopping it, and exactly how.

lisper 14y ago
It's relatively straightforward to implement a strong cryptographic system (relative to the general complexity of dealing with crypto in general). The hard part is getting it deployed. And the reason I can't just get to the point and tell you why it's not being deployed is that I don't know. It's a mystery to me. Part of the reason for telling my story and casting a wide net is the hope that someone who knows will see it and clue me in. I'm sorry you don't like my narrative style. I'm trying very hard to stick to the facts and not over-dramatize. There's a reason I'm an engineer by trade and not a journalist.
- rthomas6 14y ago
  Oh, I didn't realize that you didn't know the reason. I misunderstood your topic. My complaint was assuming you knew, and were just stringing the reader along installment after installment while diving into details before getting to the meat of the story. Now, knowing that you don't know why all your meetings with banks were cancelled, and knowing that you ultimately don't know why banks don't want to play ball, it makes a lot more sense the way you're telling the story. And I'm sure your narrative style is much better than if I tried to tell it.
  - lisper 14y ago
    Nope, I'm not trying to be cagey, I'm trying to find a way not to don the tinfoil hat. But thanks for pointing that out, I guess I should be more explicit about that.
- pbreit 14y ago
  You are very much over-dramatizing. Just describe the user experience. There are plenty of people here who know plenty about cryptography, payments and getting service usage. Note: here's all you have to tell us related to cryptography: the service is as secure as a mag-stripe.
  - lisper 14y ago
    > Just describe the user experience http://en.wikipedia.org/wiki/Chip_and_PIN http://en.wikipedia.org/wiki/Chip_and_PIN > There are plenty of people here who know plenty about cryptography, payments and getting service usage I've explained this to you before: not all of the people who read my blog are engineers. > Note: here's all you have to tell us related to cryptography: the service is as secure as a mag-stripe. Apparently I have to explain more than that because that makes no sense whatsoever. Hm, if it quacks like a troll...
    - pbreit 14y ago
      Chip and pin is extremely difficult and expensive to roll out. And doesn't really address any of the shortcomings of the US credit card market. Fraud is essentially a non-issue in card-present situations. Hardly a troll.
      - lisper 14y ago
        > Chip and pin is extremely difficult and expensive to roll out You're moving the goal posts. You asked me to describe the user experience. It would be like chip-and-pin. > Fraud is essentially a non-issue in card-present situations. That is not true. If it were, they would not ask you to enter your billing zip at gas pumps. (Yes, I know they don't do this everywhere, but it is a very common practice precisely because card-present fraud is a significant problem in some areas.) > Hardly a troll. We'll see.
        pbreit 14y ago
        So it's like chip and pin but doesn't require new pos hardware? Is your system easier to use than a card swipe + entering 5 digits?
PeterisP 14y ago
All the problems are the integration with "real money", i.e., the account where you get your salary, the accont where your company pays salaries from, the card/whatever that you buy stuff with, and the card/whatever that you get cash from. For that, you'd need to interchange payments with your system and bank accounts. 1) Gov't regulates financial institutions, and there are good reasons for it - otherwise Ponzi schemes and 'bankers' stealing deposits are a real pain and causes the public to ask for regulation. So they will want (force) you to submit to regulation if you want to do anything serious; or you may try to do "only information" and have another, licenced institution (a large bank) hold the actual money - this is what many finance startups do, but then they depend fully on the bank(s). 2) Gov't and banks don't like anonymous transactions, and there are good reasons for it - money laundering, tax evasion, organized crime and stolen money are very real issues. A basic principle is 'know your customer', i.e., don't do any [above $X] business with anyone you can't identify; and don't allow your customers to front payments on behalf of others, unless they identify all those others to you in each transaction. And it's often simpler/cheaper to disallow 'on behalf' deals at all than to integrate your customer/transaction data with the bank's systems. For example, see MtGox AML limits for money withdrawal - if you want to handle "real money", then that would apply for all transactions, not just withdrawals. 3) There are a bunch of consumer protection laws that may hurt you. For example, if a customer's account is hacked and money transferred, above a certain limit you (not the customer) will be liable for the loss. And there are other cases as well. So you (as the organizer) really, really want a money system where payments are (a) traceable, (b) revocable if legally required and (c) can't easily go to any other untraceable, irrevocable systems. Banks do so. The alternative is to charge huge fees to cover the risks to you. 4) Payment systems (ACH/etc) require huge collaterals or guarantees from participants - and there are good reasons for it, as you don't want to receive a gazillion payments, give the money to your customers, and then have the payer institution say that they're insolvent and won't cover the bill for the payment-messages that they sent. Technical and legal barriers to joining are also quite high.
- foxylad 14y ago
  Good summary. 1, 2 and 4 are really about trust - if we trusted some institution implicitly, they could run the perfect online bank for the world. The first real banks got started in the 19th century when Quakers started them, because people (even from other denominations) trusted Quakers not to rip them off. Maybe the Dali Lama needs to start an internet bank for the world. And point 2... as a society, we have a very important decision to make. Do we trust our governments to control our money - and that of the terrorists, child pornographers and media prirates? The right to control our own money is disappearing as cash is slowly supplanted by cards, and I expect swift action against bitcoin if it gains traction.

lisper 14y ago

It's relatively straightforward to implement a strong cryptographic system (relative to the general complexity of dealing with crypto in general). The hard part is getting it deployed. And the reason I can't just get to the point and tell you why it's not being deployed is that I don't know. It's a mystery to me. Part of the reason for telling my story and casting a wide net is the hope that someone who knows will see it and clue me in. I'm sorry you don't like my narrative style. I'm trying very hard to stick to the facts and not over-dramatize. There's a reason I'm an engineer by trade and not a journalist.

rthomas6 14y ago
Oh, I didn't realize that you didn't know the reason. I misunderstood your topic. My complaint was assuming you knew, and were just stringing the reader along installment after installment while diving into details before getting to the meat of the story. Now, knowing that you don't know why all your meetings with banks were cancelled, and knowing that you ultimately don't know why banks don't want to play ball, it makes a lot more sense the way you're telling the story. And I'm sure your narrative style is much better than if I tried to tell it.
- lisper 14y ago
  Nope, I'm not trying to be cagey, I'm trying to find a way not to don the tinfoil hat. But thanks for pointing that out, I guess I should be more explicit about that.
pbreit 14y ago
You are very much over-dramatizing. Just describe the user experience. There are plenty of people here who know plenty about cryptography, payments and getting service usage. Note: here's all you have to tell us related to cryptography: the service is as secure as a mag-stripe.
- lisper 14y ago
  > Just describe the user experience http://en.wikipedia.org/wiki/Chip_and_PIN http://en.wikipedia.org/wiki/Chip_and_PIN > There are plenty of people here who know plenty about cryptography, payments and getting service usage I've explained this to you before: not all of the people who read my blog are engineers. > Note: here's all you have to tell us related to cryptography: the service is as secure as a mag-stripe. Apparently I have to explain more than that because that makes no sense whatsoever. Hm, if it quacks like a troll...
  - pbreit 14y ago
    Chip and pin is extremely difficult and expensive to roll out. And doesn't really address any of the shortcomings of the US credit card market. Fraud is essentially a non-issue in card-present situations. Hardly a troll.
    - lisper 14y ago
      > Chip and pin is extremely difficult and expensive to roll out You're moving the goal posts. You asked me to describe the user experience. It would be like chip-and-pin. > Fraud is essentially a non-issue in card-present situations. That is not true. If it were, they would not ask you to enter your billing zip at gas pumps. (Yes, I know they don't do this everywhere, but it is a very common practice precisely because card-present fraud is a significant problem in some areas.) > Hardly a troll. We'll see.
      - pbreit 14y ago
        So it's like chip and pin but doesn't require new pos hardware? Is your system easier to use than a card swipe + entering 5 digits?

PeterisP 14y ago

All the problems are the integration with "real money", i.e., the account where you get your salary, the accont where your company pays salaries from, the card/whatever that you buy stuff with, and the card/whatever that you get cash from. For that, you'd need to interchange payments with your system and bank accounts. 1) Gov't regulates financial institutions, and there are good reasons for it - otherwise Ponzi schemes and 'bankers' stealing deposits are a real pain and causes the public to ask for regulation. So they will want (force) you to submit to regulation if you want to do anything serious; or you may try to do "only information" and have another, licenced institution (a large bank) hold the actual money - this is what many finance startups do, but then they depend fully on the bank(s). 2) Gov't and banks don't like anonymous transactions, and there are good reasons for it - money laundering, tax evasion, organized crime and stolen money are very real issues. A basic principle is 'know your customer', i.e., don't do any [above $X] business with anyone you can't identify; and don't allow your customers to front payments on behalf of others, unless they identify all those others to you in each transaction. And it's often simpler/cheaper to disallow 'on behalf' deals at all than to integrate your customer/transaction data with the bank's systems. For example, see MtGox AML limits for money withdrawal - if you want to handle "real money", then that would apply for all transactions, not just withdrawals. 3) There are a bunch of consumer protection laws that may hurt you. For example, if a customer's account is hacked and money transferred, above a certain limit you (not the customer) will be liable for the loss. And there are other cases as well. So you (as the organizer) really, really want a money system where payments are (a) traceable, (b) revocable if legally required and (c) can't easily go to any other untraceable, irrevocable systems. Banks do so. The alternative is to charge huge fees to cover the risks to you. 4) Payment systems (ACH/etc) require huge collaterals or guarantees from participants - and there are good reasons for it, as you don't want to receive a gazillion payments, give the money to your customers, and then have the payer institution say that they're insolvent and won't cover the bill for the payment-messages that they sent. Technical and legal barriers to joining are also quite high.

foxylad 14y ago
Good summary. 1, 2 and 4 are really about trust - if we trusted some institution implicitly, they could run the perfect online bank for the world. The first real banks got started in the 19th century when Quakers started them, because people (even from other denominations) trusted Quakers not to rip them off. Maybe the Dali Lama needs to start an internet bank for the world. And point 2... as a society, we have a very important decision to make. Do we trust our governments to control our money - and that of the terrorists, child pornographers and media prirates? The right to control our own money is disappearing as cash is slowly supplanted by cards, and I expect swift action against bitcoin if it gains traction.