IP: Two interesting notes on Blind Signatures Digital Cash in

[Dave Farber <farber () cis upenn edu>]

Date: Wed, 25 Mar 1998 15:19:11 -0500
From: Robert Hettinga <rah () shipwright com>


:
:


So, I'm talking to somebody from Russia about the wonders of digital bearer
settlement recently :-), and this morning he comes back to me saying he's
starting to hear of several people there who are planning on issuing
Chaumian blind signature digital cash, with payee anonymity, even.


I don't know if they're denominating things in dollars, or rubles, or what,
and I certainly don't know if this is really true, which is why I'm here
asking you guys here about it.


I always thought (though I now don't know why I think so) that the blind
signature patent holds in Russia, but, as the world's only um,
anarchocapitalist, society ;-), Russians may honor patents in the breach
more often than not. Lots of out of work cryptographers in Russia, I bet. I
mean, they did Tetris, and Elvis+ (such as it was; their failure was our
fault, not theirs), could RussoDollars be next?


I'm not saying that Russia's a cakewalk these days, but it *is* interesting
to note the current Russian state (or lack thereof) is about as old as the
commercial internet, that not many people use Moscow city phone system
because there are 22 voraciously competing cellphone companies, etc., and,
finally, that Moscow has *lots* of Cirrus ATM machines, which means that
our money can go there. :-).


In the interest of brevity, we'll ignore their, um, geodesic market for
armed personal force for the time being, but maybe things have calmed down
now that their mafia has figured out they can do all the "hostile" bank
takeovers they want, but ownership doesn't a bank make...


Anyway, I haven't heard of a Russian ecash licensee, certainly.


Does anyone on these lists know of anyone in Russia -- or anywhere else in


the old Soviet Union -- who's doing fully anonymous Chaumian
blind-signature digital cash, with a patent license or not?




If done in dollars, all that seignorage, and there would be bunches just in
Russia alone, would be a boon for the Russian balance of payments account,
certainly. In addition to Russians not having to haul those pictures of Ben
around, Americans, and the rest of the world, for that matter, could start
to safely keep and spend their cash on the net, while, of course, earning
some Russian entrepreneur both purchase premia and seignorage.


Irony, thy name might be Russia?


Naaawwww....




Cheers,
Bob Hettinga


-----------------
Robert Hettinga (rah () shipwright com), Philodox
e$, 44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
The e$ Home Page: http://www.shipwright.com/


From: "Maksim Otstavnov" <maksim () volga net>
To: Robert Hettinga <rah () shipwright com>
Date: Thu, 26 Mar 1998 07:16:49 +0400
CC: cryptography () c2 net, dbs () philodox com, e$@vmeng.com, dcsb () ai mit edu




    (In fact, I'm not on the list the original msg CC:'ed to, but I think my
    comments on Bob's msg can be useful enough to forgive my netiquette
    violation. Anybody interested is welcome to answer personally.)


> So, I'm talking to somebody from Russia about the wonders of digital bearer
> settlement recently :-), and this morning he comes back to me saying he's
> starting to hear of several people there who are planning on issuing
> Chaumian blind signature digital cash, with payee anonymity, even.


The first prototype (PayCash by Tavrichesky Bank) is live at


http://195.5.138.171 and those who read Russian are welcome. I hope the
English version of the site contents and software will be available soon.


> I don't know if they're denominating things in dollars, or rubles, or what,
> and I certainly don't know if this is really true, which is why I'm here
> asking you guys here about it.


Their current denomination is "petty rubles", "petty yens", "petty dollars"
and "petty liras". With petty banking and exchange, of course.


> I always thought (though I now don't know why I think so) that the blind
> signature patent holds in Russia, but, as the world's only um,
> anarchocapitalist, society ;-), Russians may honor patents in the breach
> more often than not.


Algorithms are not pantentable in Russia. Programs, chips topologies and
databases are protected as copyrighted stuff.


> I'm not saying that Russia's a cakewalk these days, but it *is* interesting
> to note the current Russian state (or lack thereof) is about as old as the


> commercial internet, that not many people use Moscow city phone system
> because there are 22 voraciously competing cellphone companies,


MGTS (formerely Moscow state phote monopoly) still has some 90% of Moscow
market. Introducing of per-time charges on local calls this year may change
this.


> In the interest of brevity, we'll ignore their, um, geodesic market for
> armed personal force for the time being, but maybe things have calmed down
> now that their mafia has figured out they can do all the "hostile" bank
> takeovers they want, but ownership doesn't a bank make...


Armed personal force is distributed rather in feudal centralized model than
geodesically... in Russia as well as anywhere else, alas...


> Anyway, I haven't heard of a Russian ecash licensee, certainly.


I heard of several banks and financial companies who tried to apply for
ecash(tm) license but negotiations failed. (I have no first-hand evidence
though). I humbly think there is something wrong with DigiCash's terms. With
all respect for DigiCash technological excellence and Dr. Chaum's
distinguished role in "privacy marketing", their PR... aren't the best PR I
have seen ;)


One more comment: we actully don't need the full interoperability. If
Tavrichesky or anybody else issue "real" currency, it would be enough to have
a market of secondary services of exchanges, e.g. Tavrichesky's erubles to
MTB's edollars, or MTB's edollars to Tavrichesky edollars etc. The exchanges
might be located in some friendly jurisdiction - Anguilla, to say, or Grand
Cayman.


Another comment: current Russian banking rules do not allow fully anonymous
banking. But there is at least one ex-Soviet jurisdiction allowing and
encouraging it, Ukraine. (I'm not sure of Baltic states, Latvia being the
most probable candidate).


> If done in dollars, all that seignorage, and there would be bunches just in
> Russia alone, would be a boon for the Russian balance of payments account,
> certainly.


Really? Anybody can audit _national_ payment balance concerning anonymous
ecash? ;)


But if there are any realistic arguments (on how to improve national
payments balance by encouraging anonymous DBSs) I will discuss them with
Central Bank officials. One opportunity is to have Russian Central Bank to
back private banks' e-currency (according to Lysyanskaya/Ramzan recently
proposed architecture, or anything alike).


Though, ceteris paribus, I would prefer experimenting with fully private
currencies ;) Just much more fun.


> In addition to Russians not having to haul those pictures of Ben around,
> Americans, and the rest of the world, for that matter, could start to
> safely keep and spend their cash on the net, while, of course, earning some
> Russian entrepreneur both purchase premia and seignorage.


An interesting question: who have seinorage on eurodollars? Might "an
enterpreneur" in question be the Gov (either federal, or, to say, Moscow)?


> Irony, thy name might be Russia?


You're virtually welcome...


Thank you Bob for initiating this topic!


Cheers,
-- Maksim Otstavnov <maksim () volga net> http://www.ice.ru/otstavnov/
--   - chief, Labs of Civil & Financial Crypto
--   - editor, "CompuNomika" monthly
--   - maintainer of The Russian PGP HomePage