> ubject: > Re: Encyclopedia of Information Systems piece on "electronic payments" > Date: > Wed, 24 Jan 2001 12:44:37 -0400 > From: > Ian Grigg <[EMAIL PROTECTED]> > To: > [EMAIL PROTECTED] > CC: > Digital Bearer Settlement List <[EMAIL PROTECTED]> > References: > 1 > > > Jane, > > Apology (#2) for not replying to this earlier! > > > > Reply-To: <[EMAIL PROTECTED]> > > From: "Jane Winn" <[EMAIL PROTECTED]> > > To: "'R. A. Hettinga'" <[EMAIL PROTECTED]> > > Subject: Encyclopedia of Information Systems piece on "electronic payments" > > Date: Thu, 11 Jan 2001 16:05:17 -0600 > ... > > I have agreed to write a very short piece (9,000 words or 30 double spaced > > pages) on "electronic payment systems" for the encyclopedia of information > > systems that will be published by the Academic Press. I'll paste in my very > > rough draft of an outline below so your colleagues have some idea what I'm > > thinking I should be covered. As an attorney, I'd love to cover non-US law, > > but I'm afraid I just can't teach myself that between now and March 1 when > > the piece is due so I'll have to skip it. The encyclopedia is not focused > > on law in any event, so the primary focus of the piece should be the payment > > systems themselves, not the regulatory environment. > > > > I would be very grateful if your colleagues could point me toward any of the > > following: > > > > 1. up-to-date, concise discussions of developments in electronic payments > > for my edification before I start writing; > > > > IMHO, there are two systems of note. > > 1. Paypal. This group have built upon the original idea of First Virtual > in order to piggy back themselves on the credit card system and offer users > access to a currency that is ultimately settled using credit card charges > and rebates. > > Paypal avoided the error of FV, and permitted user-2-user (p2p some call it) > transactions. This gave them an instant application in circles of friends, > at the cost of some regulatory angst. > > They have however only partially solved the problems of credit card fraud, > in that chargebacks can hurt them, and they've passed these hurts onto > consumers in arbitrary ways. Paypal have some innovatory methods for > addressing these problems, but it remains a fundamental limit to the system. > > The huge strategic nightmare that they have is that they are essentially > dependant on the say-so of the credit card companies. The day that these > giants decide they don't like PayPal, it is all over for them. Hence, this > business has been oriented from the start as a customer-base-expansion play. > That is, get as many customers as possible and then sell out. > > The first sellout was to x.com, an Internet Bank. It is now fairly wide > spread knowledge that they have reverse-absorbed X.com (who first dropped > their original Internet Banking products and then changed their name back > to PayPal) and are now on the lookout for the next cash pile to take on. > > Good business if you can get it. However, they have shown that it is > possible to do nicely efficient Internet transactions with a large group > of users, and for that, their model demands investigation. > > 2. www.e-gold.com. This group started out with some bars of gold in > the cupboard and a little accounting system that gave people grem-for-gram > gold balances. They now run to something like 300,000 accounts, and a > tonne of gold. > > All the gold is managed by a governance structure. (Disclosure: I > designed it for them :) Metal itself is stored with the Bank of > NovaScotia, a long time storer of physical metal. All metal is co-signed > by a well known gold fund quoted on the stock exchange, so that the > founders of the company have less control over metal in escrow. > > The system is operated by a Nevis company, E-gold Ltd, which offers > contracts to its users, and places the gold in the name of a trust, > with users named as beneficiaries (not individually). New bars are > "bailed in" to the system by approved agents sending them to the > repository, and the cosignatory approving the addition of metal > balances. > > The same structure was planned for the electronic side: independant > operator of the machines and software, special account managed by > reputable person for adding and subtracting electronic metal. (I > don't know how far they've got with these steps.) > > The system also offers the same in silver, palladium and platinum. > Primarily, it is interesting for two reasons: > > * showing how 100% reserved metal systems are quite viable as > electronic currencies, and > > * showing how a chain of governance - appointees and contracts - > can be built to secure the safety of users' value without > any reference to governments. All that is needed is thought, > contracts, and reputation. > > Given the above, a most interesting development was the arisal > of independant and competitive market makers. There were, in October > of 2000, some 13 market makers around the world, all offering to > change currency into e-gold and back again. This shows how the > "Loading Problem" can be addressed, something that has bedevilled > many of the world's big trials. > > There are other systems around, but I find them uninteresting. > > > > > 2. "recent or classic comprehensive secondary works on the topic" for the > > bibliography (I need 5-15 citations to such works) > > > > There is little that I can recommend that surveys the net art, it has > gone a bit quiet since the heydays. I could humbly submit my most > recent paper on a 7 layer model for financial cryptography, as a > mild introduction to the science of building these things: > > http://www.iang.org/papers/fc7.html > > Which was presented at the last FC, and should be in the proceedings. > I try to describe how the field is very complex, due to its many > needed disciplines, but it can still be broken down into layers for > ease of traversal. > > For smart card systems, Leo Van Hove recently surveyed Europe (see > his site, below). > > > > > 3. relevant Internet resources where relevant and likely to remain > > available for a long time for the bibliography. > > > > Much to my chagrin, IFCA does little to look after its IP and > as such it is only available via Springer-Verlag. I think they > have a pay-to-view site or something equally clumsy. > > Other than that, John Muller's links you will know well. Also, > look at Leo Van Hove's huge bibliography for information on > more smart card systems. http://cfec.vub.ac.be/cfec/purses.htm > > > > > By default, I will have to focus on US issues, but to the extent that I am > > able, I'd be delighted to be able to cover issues in other countries and > > regions as there is no theoretical justification for limiting the discussion > > to the US. > > > > The political situation in Europe revolves around the new Electronic > Money Directive, which seeks to make issuers of e-money limited to > banks or look-alike-banks. It has not been met with much enthusiasm, > I think the industry now implicitly realises that the banks are not > innovative enough to pursue the field. But I'm not in touch any more > with developments there, so can only hazard a guess. > > Other than the directive, most comment has been directed towards > Belgiums national scheme and the Netherland's two competitive schemes. > > > > > Please encourage people to contact me directly at [EMAIL PROTECTED] if they > > have any materials to recommend. > > > > Many thanks in advance for your assistance. > > > > best regards, jkw > > > > """""""""""""""""""""""""""""""""""" > > Jane Kaufman Winn > > Professor > > Southern Methodist University > > School of Law > > Dallas TX 75275-0116 > > [EMAIL PROTECTED] > > www.smu.edu/~jwinn > > www.virtual-langdell.com > > """""""""""""""""""""""""""""""""""" > > > -- > iang > -- http://www.constructiongigs.com/ Use gold as money. It's easy. Create a free e-gold account here: http://www.e-gold.com/e-gold.asp?cid=101670 ConstructionGigs.com's PGP public key is here: http://www.constructiongigs.com/assets/DH-DSSkey.txt Fingerprint: 3C4D A63F 3C8B 2D7B 7E1A FFE8 9A2E 4D78 CAD6 66B7 --- You are currently subscribed to e-gold-list as: [email protected] To unsubscribe send a blank email to [EMAIL PROTECTED]
