5 ms·

How to make a mint: The cryptography of anonymous electronic cash

27 points by daeken 17y ago

daeken 17y ago
Despite being an old article, I've seen few references to it in the wild, and thought it was very relevant after seeing http://news.ycombinator.com/item?id=777283 http://news.ycombinator.com/item?id=777283
- jacquesm 17y ago
  There was a dutch company called DigiCash that was quite far with developing such a concept. http://en.wikipedia.org/wiki/DigiCash http://en.wikipedia.org/wiki/DigiCash
  - daeken 17y ago
    There's also ECache: http://en.wikipedia.org/wiki/ECache http://en.wikipedia.org/wiki/ECache Very, very interesting stuff.
    - jacquesm 17y ago
      The first party to create a universal micropayment system for the web that is really usable is going to make it very big imo. It would be a viable alternative to the ad supported model. Most websites operate on very small fractions of a cent per pageview, you would have to have an extremely low overhead to make it work. Say you pay a monthly subscription to the payment service provider, they then do all the bookkeeping based on a .js tag that is embedded on the page that you visit. If you don't have an account the .js redirects you to the signup page for the payments service provider, you register, pay your initial fee and continue to browse. You might even end up saving online newspapers in the process.
      - zngtk4 17y ago
        I completely agree with you. I would easily spend 5 or 10 cents to read an interesting article, multiple times per day, especially a well written article from the New York Times or Wall Street Journal.
      - apotheon 17y ago
        . . . which falls apart for people who don't allow JavaScript to execute in the browser. This would definitely impact some Websites more than others.
        sho 17y ago
        The number of pepople who don't allow JS in the browser is vanishingly small and are probably (mostly) the paranoid type who wouldn't use an internet payment service anyway. IMO.
        dtby 17y ago
        I think you are highly confused about the intersection of "people who don't allow random code execution on their machines" and "people who would like a secure micropayment service."
        sho 17y ago
        I don't think I'm confused. I think perhaps many people who browse with JS deliberately turned off (for these reasons) misunderstand the multifaceted nature of security and place irrational weight on the fact that the JS is intended to execute on their machine. A remotely exploitable hole in JS is pretty much exactly the same as a hole in any other of the dozens of components of your browser. I would be much more worried about subtle holes in the myriad of closed-source media plugins you probably don't even know are there, and worse, can be loaded by ad networks. A much better point against JS would have been about XSS or similar. Yes, that's still a real risk, but incidents seem to be on the decline as it's become standard web developer practise to guard against it. And that's only ever a single-site vulnerability, not the local-machine arbitrary-code-execution exploit you seemed to allude to. But even if I am confused about all that, I'm certainly not wrong about the numbers - it's about 5% IIRC, and going down. JS is here to stay, is becoming a necessity on many sites, and everyone's just going to have to deal with that.
        dtby 17y ago
        I don't really think I'm confused. Not to put too fine a point on it, but "of course you don't." If you did, you would change your opinion. * I think the majority of people who browse with JS deliberately turned off are misinformed* Even if so, they are the same so-called 'paranoid' people to whom a secure (and hopefully anonymous) micropayment platform appeals. And even if I am confused about that I'm certainly not wrong about the numbers, they're minute. What is important is not absolute numbers. I reckon that school teachers comprise a minute portion of all web surfers. I doubt that Patrick would use this as a reason to exclude such from his Bingo Card Creator site. I consider myself to be super-paranoid and would welcome with open arms a proper cryptographically secure internet payment system. You would think that one could generalize this.
      - wmf 17y ago
        This is called Contenture. http://www.contenture.com/ http://www.contenture.com/
jonasvp 17y ago
I've been thinking very hard about this topic lately and actually went ahead with writing some code. Then I found http://www.opencoin.org http://www.opencoin.org who already did some of the work. I think there's a lot than can be done in this field - not with micropayments, which everybody seems to think about first when they see this. What I find a lot more interesting is the possibility of many competing Internet currencies not tied to any national one. How about turning HN karma into a currency? Probably no mass-market appeal... what's lacking is a killer application for digital money and when it comes, it'll probably be in a form that doesn't seem like money to us now.
- daeken 17y ago
  I wish I had the answers for where to go with this, because there's no doubt in my mind it's the Next Big Thing (TM). That said, I strongly suggest reading Down And Out In The Magic Kingdom by Cory Doctorow ( http://en.wikipedia.org/wiki/Down_and_Out_in_the_Magic_Kingdom http://en.wikipedia.org/wiki/Down_and_Out_in_the_Magic_Kingd...), as his Whuffie system seems like a path that needs to be taken, somehow.
  - sho 17y ago
    Unfortunately he doesn't go into much detail about how Whuffie would actually work. I agree that some kind of karma system will eventually replace money, but the devil's in the details, and Doctorow offers precious few.
- wmf 17y ago
  What I find a lot more interesting is the possibility of many competing Internet currencies not tied to any national one. Would you also find it interesting to be indicted for money laundering? http://en.wikipedia.org/wiki/E-gold http://en.wikipedia.org/wiki/E-gold http://www.wired.com/threatlevel/2009/06/e-gold/ http://www.wired.com/threatlevel/2009/06/e-gold/
  - jonasvp 17y ago
    Well, it would probably be an interesting experience... not that I would care to find out. That's why I said the killer application would probably not look like money to us. Take Youtube, for instance: people go to considerable lengths to create videos that others find interesting. Then they sit glued to the screen watching the view counter go up. There's a currency: people paying with their time (which everybody only has a fixed amount of) for someone's work creating videos. Now have some ISP give extra bandwidth to people with Youtube videos over x thousand views. It doesn't cost them much "real" money since bandwidth is more or less a fixed cost but you have turned "virtual" money into a currency. Granted, the example is a bit contrived but you can see where I'm going with this.
anthonymc 17y ago
Neal Stephenson has some things to say about this in Cryptonomicon. Great book.
hughster 17y ago
Your e-cash for the Internet must be transferrable in and out of your pocket as well. The same money you use on eBay should be usable at the convenience store. Mondex, etc. were the right idea (though tied to local currencies) but ahead of their time for the technology. Maybe time to start thinking along those lines again?
lionheart 17y ago
The question is, is there anything else that is universally useful that we can use as a basis for the currency? How about something like Amazon Turk? Except you don't get paid in cash, you get paid in points. All points had to have been generated by somebody doing a small, useful service for somebody else.
Barry_Seal 17y ago
I've been thinking about software to create economic instruments from information (e.g., source code) that you could exchange for micropayments. Can you recommend open source packages that might be useful for issuance and trading?

27 points by daeken 17y ago

Despite being an old article, I've seen few references to it in the wild, and thought it was very relevant after seeing http://news.ycombinator.com/item?id=777283 http://news.ycombinator.com/item?id=777283

jacquesm 17y ago
There was a dutch company called DigiCash that was quite far with developing such a concept. http://en.wikipedia.org/wiki/DigiCash http://en.wikipedia.org/wiki/DigiCash
- daeken 17y ago
  There's also ECache: http://en.wikipedia.org/wiki/ECache http://en.wikipedia.org/wiki/ECache Very, very interesting stuff.
  - jacquesm 17y ago
    The first party to create a universal micropayment system for the web that is really usable is going to make it very big imo. It would be a viable alternative to the ad supported model. Most websites operate on very small fractions of a cent per pageview, you would have to have an extremely low overhead to make it work. Say you pay a monthly subscription to the payment service provider, they then do all the bookkeeping based on a .js tag that is embedded on the page that you visit. If you don't have an account the .js redirects you to the signup page for the payments service provider, you register, pay your initial fee and continue to browse. You might even end up saving online newspapers in the process.
    - zngtk4 17y ago
      I completely agree with you. I would easily spend 5 or 10 cents to read an interesting article, multiple times per day, especially a well written article from the New York Times or Wall Street Journal.
    - apotheon 17y ago
      . . . which falls apart for people who don't allow JavaScript to execute in the browser. This would definitely impact some Websites more than others.
      - sho 17y ago
        The number of pepople who don't allow JS in the browser is vanishingly small and are probably (mostly) the paranoid type who wouldn't use an internet payment service anyway. IMO.
        dtby 17y ago
        I think you are highly confused about the intersection of "people who don't allow random code execution on their machines" and "people who would like a secure micropayment service."
        sho 17y ago
        I don't think I'm confused. I think perhaps many people who browse with JS deliberately turned off (for these reasons) misunderstand the multifaceted nature of security and place irrational weight on the fact that the JS is intended to execute on their machine. A remotely exploitable hole in JS is pretty much exactly the same as a hole in any other of the dozens of components of your browser. I would be much more worried about subtle holes in the myriad of closed-source media plugins you probably don't even know are there, and worse, can be loaded by ad networks. A much better point against JS would have been about XSS or similar. Yes, that's still a real risk, but incidents seem to be on the decline as it's become standard web developer practise to guard against it. And that's only ever a single-site vulnerability, not the local-machine arbitrary-code-execution exploit you seemed to allude to. But even if I am confused about all that, I'm certainly not wrong about the numbers - it's about 5% IIRC, and going down. JS is here to stay, is becoming a necessity on many sites, and everyone's just going to have to deal with that.
        dtby 17y ago
        I don't really think I'm confused. Not to put too fine a point on it, but "of course you don't." If you did, you would change your opinion. * I think the majority of people who browse with JS deliberately turned off are misinformed* Even if so, they are the same so-called 'paranoid' people to whom a secure (and hopefully anonymous) micropayment platform appeals. And even if I am confused about that I'm certainly not wrong about the numbers, they're minute. What is important is not absolute numbers. I reckon that school teachers comprise a minute portion of all web surfers. I doubt that Patrick would use this as a reason to exclude such from his Bingo Card Creator site. I consider myself to be super-paranoid and would welcome with open arms a proper cryptographically secure internet payment system. You would think that one could generalize this.
    - wmf 17y ago
      This is called Contenture. http://www.contenture.com/ http://www.contenture.com/

jonasvp 17y ago

I've been thinking very hard about this topic lately and actually went ahead with writing some code. Then I found http://www.opencoin.org http://www.opencoin.org who already did some of the work. I think there's a lot than can be done in this field - not with micropayments, which everybody seems to think about first when they see this. What I find a lot more interesting is the possibility of many competing Internet currencies not tied to any national one. How about turning HN karma into a currency? Probably no mass-market appeal... what's lacking is a killer application for digital money and when it comes, it'll probably be in a form that doesn't seem like money to us now.

daeken 17y ago
I wish I had the answers for where to go with this, because there's no doubt in my mind it's the Next Big Thing (TM). That said, I strongly suggest reading Down And Out In The Magic Kingdom by Cory Doctorow ( http://en.wikipedia.org/wiki/Down_and_Out_in_the_Magic_Kingdom http://en.wikipedia.org/wiki/Down_and_Out_in_the_Magic_Kingd...), as his Whuffie system seems like a path that needs to be taken, somehow.
- sho 17y ago
  Unfortunately he doesn't go into much detail about how Whuffie would actually work. I agree that some kind of karma system will eventually replace money, but the devil's in the details, and Doctorow offers precious few.
wmf 17y ago
What I find a lot more interesting is the possibility of many competing Internet currencies not tied to any national one. Would you also find it interesting to be indicted for money laundering? http://en.wikipedia.org/wiki/E-gold http://en.wikipedia.org/wiki/E-gold http://www.wired.com/threatlevel/2009/06/e-gold/ http://www.wired.com/threatlevel/2009/06/e-gold/
- jonasvp 17y ago
  Well, it would probably be an interesting experience... not that I would care to find out. That's why I said the killer application would probably not look like money to us. Take Youtube, for instance: people go to considerable lengths to create videos that others find interesting. Then they sit glued to the screen watching the view counter go up. There's a currency: people paying with their time (which everybody only has a fixed amount of) for someone's work creating videos. Now have some ISP give extra bandwidth to people with Youtube videos over x thousand views. It doesn't cost them much "real" money since bandwidth is more or less a fixed cost but you have turned "virtual" money into a currency. Granted, the example is a bit contrived but you can see where I'm going with this.

anthonymc 17y ago

Neal Stephenson has some things to say about this in Cryptonomicon. Great book.

hughster 17y ago

Your e-cash for the Internet must be transferrable in and out of your pocket as well. The same money you use on eBay should be usable at the convenience store. Mondex, etc. were the right idea (though tied to local currencies) but ahead of their time for the technology. Maybe time to start thinking along those lines again?

lionheart 17y ago

The question is, is there anything else that is universally useful that we can use as a basis for the currency? How about something like Amazon Turk? Except you don't get paid in cash, you get paid in points. All points had to have been generated by somebody doing a small, useful service for somebody else.

Barry_Seal 17y ago

I've been thinking about software to create economic instruments from information (e.g., source code) that you could exchange for micropayments. Can you recommend open source packages that might be useful for issuance and trading?