On Thursday, April 11, 2002, at 06:59 AM, Mike Rosing wrote: > On Thu, 11 Apr 2002, Adam Back wrote: > >> Well I also am pretty anti-patent, especially the xor-cursor and >> business process kind, but at least these ecash patents are not >> frivolous patents (well Chaum's RSA blinding online scheme may look >> pretty simple once you've seen it but Brands stuff is pretty >> non-obvious). Plus for the particular application of ecash it would >> seem the biggest stumbling blocks are: > > Patent's aren't the problem - price of royalty is. If Brands is willing > to get .000001 cents per bank per day, he'll be plenty rich and the > banks > won't lose too much. But the reason we have AC today is because Tesla > requested no royalties on his motor/generator. Something for Brands to > think about.
No, we have AC because AC works better than DC in home wiring situations. And the issue of patents on software is a _metering_ problem. When the first microprocessors (and chips in general, but I'll focus on uPs) were sold, there was a lot of intellectual property embodied in the chips: patents, copyrights, etc. But the buyer of a chip, to be used for any purpose he cared to put it to, did not need to concern himself with negotiating anything with the vendor. The patents and other rights were "bundled" into the chip, reified, so to speak. Anyone could buy 1 or 100 or a million chips and put them to any use. This meant a "garage company" could buy a couple of 8080s, build a product, and sell it...unencumbered. Not so with RSA, for example. Before RSADSI would talk to a potential customer, they asked a lot of questions about uses, conflicts with other customers who had already bought the software, how the products would be identified and marked and metered. A "garage company" seeking to build RSA into a product would first have to hire a large negotiating team of lawyers and patent experts, and then would have to disclose full details of products. And RSADSI would probably not be interested in a "chump change" operation anyway. Ditto for Digicash. Ditto for _most_ software products. This is because the products themselves do not, and cannot, "meter themselves." >> - deployment / chicken and egg problem (merchants want lots of users >> before they're interested users want wide merchant acceptance before >> their interested) > > If people believe (notice Tim?) that when they transfer bits from their > electronic wallet to the dealer, and the bank believes when the dealer > transfers bits into his account that the bits are "money" then everybody > will want to use it. Yes, I notice. Thanks. I really do believe (no pun intended) that replacing vague notions of "trust" with actor-centered notions of "belief" is important. But this doesn't solve the metering issue. (What _does_ solve will need another article.) > The idea of "coins" isn't fluid enough, people want something more like > a checkbook. They can move any amount of money from their wallet to > somebody else's wallet, and it needs to be just like cash - it can > have a serial number, but it's not linked to any person. > > Merchants don't like credit cards because it costs them. If they could > use electronic cash - they'd take it in a heartbeat. Digital cash is not free, either. (Or, rather, there is no particular ontological reason to expect it to have no fees attached.) Also, the putative "cost" of processing VISA, MC, and other cards is dropping, and has been dropping for decades. Merchants can often negotiate favorable rates. And there is no basic reason why such systems cannot be _almost_ as efficient in pricing as other systems. And even if the cost of processing is 1-3% for the merchant, he also gains something. Besides gaining customers who may not have either cash or checkbooks with them, especially true for _online_ stores!, his store has less physical cash. Those Loomis and Wells Fargo armored trucks hauling bags of cash around come with some costs. And "shrinkage" from the cash registers and hold-ups of stores is a major cost, both for direct losses and for insurance and hiring costs. Hauling bits is both physically safer and less costly. --Tim May "The great object is that every man be armed and everyone who is able may have a gun." --Patrick Henry "The best we can hope for concerning the people at large is that they be properly armed." --Alexander Hamilton
