Re: Musings on the Economics of ZKS

[lcs Mixmaster Remailer]

Tim May writes:
> By contrast, many of the dot com startups have nebulous revenue 
> models and don't actually _sell_ anything.
>
> (AltaVista is my favorite current example. While it was the first 
> impressive Web search engine many of us used, circa 1995, it doesn't 
> really sell anything. So, how does it pay for its several hundred 
> employees and marketing efforts? True, it tries to sell ad space, but 
> this is, in my opinion (and that of many others) a "non-robust" 
> revenue model. Seeing a search engine screen cluttered with numerous 
> banner ads of no interest to me is not going to cause me to go to the 
> advertiser sites. Most folks using a search engine are there for a 
> purpose, not to pay attention to Odwalla orange-nectarine juice ads.)

However a good counter-example to this is Yahoo, which has essentially
the same revenue model but has been a tremendous success at it:

: Yahoo! Inc. is a global Internet communications, commerce, and media
: company that offers a branded network of services to millions of users
: daily. For the three months ended 03/00, revenues totaled $228.4 million,
: up from $103.9 million. Net income totaled $77.9 million, up from $1.8
: million. Results reflect an increased number of advertisers purchasing
: space on the Company's online media properties, increasing number of
: events boradcasted, and increased investment income.

Re: Musings on the Economics of ZKS

[mob]

Tim May <[EMAIL PROTECTED]> wrote:

>True, it tries to sell ad space, but  this is, in my opinion
>(and that of many others) a "non-robust" revenue model.
>Seeing a search engine screen cluttered with numerous 
>banner ads of no interest to me is not going to cause me 
>to go to the advertiser sites. 

The customized ad techniques, in spite of Doubleclick, don´t
seem to work very well yet. But I'm sure they will get "better".
So if Tim May has the patience I'm sure "his" Alta Vista portal
will have ads for guns and ammunitions in the future.

The new basic Alta Vista engine 
is as clean from ads as Google - and as good, it seems.

//Mob

Re: Musings on the Economics of ZKS

[R. A. Hettinga]

At 6:40 AM + on 6/17/00, lcs Mixmaster Remailer wrote:


> [Did anyone else get a shitload of three day old cypherpunk mail
> dumped on them?]

ayup...

Thought it was a mail loop. It wasn't.

Cheers,
RAH
-- 
-
R. A. Hettinga 
The Internet Bearer Underwriting Corporation 
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'

Re: Musings on the Economics of ZKS

[lcs Mixmaster Remailer]

> Hey, I have real problems figuring out how ZKS ever makes money by 
> collecting only $50, if they get even that, for customers for life. 

You don't get it.  They lose money on every sale, but they'll make it
up in volume.  Hey, it worked for Amazon.

[Did anyone else get a shitload of three day old cypherpunk mail
dumped on them?]

Re: Musings on the Economics of ZKS

[dmolnar]

On Tue, 13 Jun 2000, Tim May wrote:

> net present value (NPV) of buying a better safe. The merchant who has 
> never been robbed and so thinks he never _will_ be robbed is not the 
> guy driving the development of better safes. Analogies with crypto 
> are obvious.

This reminds me of something I realized recently -- it's not
clear to me how to reason about liability for anonymous systems. Not the
normal liability everyone thinks of, in which the service is supposedly
"liable" for the actions of an anonymous user, but the liability incurred
if the service is not anonymous enough.

Hal Finney had a post on the freenet-chat list a few months back in which
he pointed out that if Freenet is used by Chinese (or whoever) dissidents,
and then is not "anonymous enough," people will die. In the U.S. and
Europe, maybe it won't go that far, but if the service fails to be
anonymous enough, odds are good that the user is harmed in a direct 
fashion. Maybe for something which isn't even clearly illegal or
immoral -- think of a whistleblower whose cover is blown.

Whose fault is that, how do we tell, and what happens afterwards? 

will that make two bits of difference one way or the other for anonymous
systems?

I'm **not** eager to see lawsuits against ZKS for "failure to be
anonymous." I'm wondering if we will see such lawsuits, and if we do,
whether the threat of such suits will encourage the development of better
anonymous systems in the same way that real-world threats cause insurance
companies to encourage the development of better safes.

I am a little worried that trying to build better specifications/definitions 
of what kind of anonymity a system provides could be used against a
provider of anonymity services in a lawsuit. Then again, this hasn't
seemed to happen in the crypto world; when was the last time anyone was 
sued for not using semantically secure crypto? 

My understanding of product liability law is really fuzzy. I have this
impression that some sort of "best practices" exist for each industry, and
that manufacturers are supposed to follow them or face consequences. How
do these "best practices" come about, and is this model relevant to crypto
in general and anonymous systems in particular? or am I hopelessly
confused and should seek a law school course?

-dmolnar

Re: Musings on the Economics of ZKS

[Tim May]

At 9:43 AM -0700 6/13/00, Patrick Henry wrote:
>
>meatspace to nymspace money during the bootstrap phase).  Let's say ZKS also
>strikes a deal with Amazon.com to accept nym money.  Hell, if Bezos 
>has his way,
>you'll then be able to buy anything imaginable with your nym money.  The only
>problem you'll have is how to explain to the Feds how you're paying for all
>these goodies arriving at your doorstep.

I assume you're being rhetorical about this "explain to the Feds" 
bit, but the IRS almost never looks at "lifestyle issues." Even when 
mob capos have Palm Beach penthouses on their supposed salaries in 
the meatpacking business, rarely are they asked to "explain" their 
lifestyle. (Al Capone may have gone to prison on tax evasion charges, 
but this is rare, and it involved other evidence besides his 
inability to explain his lifestyle.)

If the "Feds" demanded that I "explain" the boxes of books I get from 
Amazon, I'd just tell them to get lost. Needless to say, this 
scenario would never unfold.

As to the more important issue of ZKS enabling nyms to order books 
through Amazon, why? This would compromise the nym, and even ZKS 
advises cancelling a nym if there has ever been any personal data 
revealed. A UPS shipping address would seem to fit the bill for 
having compromised the nym.



>
>I think there is a sizable percentage of the world's population that would
>willingly remove the greedy hand of government from financial transactions if
>they could be convinced that there would be no way of getting 
>caught.  Once you
>got to a certain critical mass, then the government would be forced to change
>its ways (by collecting revenues through service fees rather than taxes, for
>example).

Better reread the ZKS terms and conditions page. They have many 
grounds for cancelling accounts, with no refund provided on prepaid 
nyms, for illegal or questionable activities.

I'm a big fan of underground or cryptoanarchic transactions, 
obviously. But Freedom has too many strings attached, has a single 
point of failure, has nonsense about "applicable laws," and has not 
been vetted by outside cryptography experts.

This may change.

But for now, it is not what some had hoped for. And it doesn't matter 
if they have "200 and rapidly growing" employees if the fundamental 
approach is flawed.
>
>These concepts have been discussed in cypherpunk circles for over a decade of
>course, but the exciting part about what's going on today is that it's not too
>much of a leap of faith to imagine it actually happening, with 
>existing internet
>companies, and soon.
>
>--PH

Well, Patrick Henry, let us know how it works out using your nym to 
order books from Amazon. Perhaps if you ask Amazon not to make any 
records of where they shipped the books your nyms will be safe. 
Sounds secure to me.


--Tim May
-- 
-:-:-:-:-:-:-:
Timothy C. May  | Crypto Anarchy: encryption, digital money,
ComSec 3DES:   831-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
"Cyphernomicon" | black markets, collapse of governments.

Re: Musings on the Economics of ZKS

[Patrick Henry]

Tim May wrote:

>Hey, I have real problems figuring out how ZKS ever makes money by 
>collecting only $50, if they get even that, for customers for life. 

It's $50 per year...or you're assuming customers cancel after the first year?

Don't rule out ZKS offering other services in the future, such as a digital
wallet to go with each nym.  They could get a piece of each transaction.

I was daydreaming about this the other day in fact (perhaps it was the
fever-induced delirium due to a bad cold).  Imagine bartering your services
through elance.com using one of your nyms.  You then get paid with digital cash
to your nym's wallet.  (Perhaps ZKS offers an exchange service to convert
meatspace to nymspace money during the bootstrap phase).  Let's say ZKS also
strikes a deal with Amazon.com to accept nym money.  Hell, if Bezos has his way,
you'll then be able to buy anything imaginable with your nym money.  The only
problem you'll have is how to explain to the Feds how you're paying for all
these goodies arriving at your doorstep.

I think there is a sizable percentage of the world's population that would
willingly remove the greedy hand of government from financial transactions if
they could be convinced that there would be no way of getting caught.  Once you
got to a certain critical mass, then the government would be forced to change
its ways (by collecting revenues through service fees rather than taxes, for
example).  

These concepts have been discussed in cypherpunk circles for over a decade of
course, but the exciting part about what's going on today is that it's not too
much of a leap of faith to imagine it actually happening, with existing internet
companies, and soon.

--PH

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