Re: Digicash Patents

[R. A. Hettinga]

Okay, so I called my source up, and we chatted a bit

Long story short, Infospace, the company that up until now had Chaum's original blind 
signature patents, sold them, in a bundle of other stuff, to First Data, in a 
reorganization.

First Data is the largest credit-card processor in the US, among other things, but 
they bought the original Digicash patents as a way to get at an authentication 
technology they were paying Infospace to use already, and a business that Infospace, 
in the middle of its own litigation circus, wanted out of, offering it to its two 
biggest customers, First Data and American Express. 

First Data bought it, apparently, as the people in Seattle, who used to work eCash 
Technologies -- and then Infospace -- are supposedly getting their checks from First 
Data now.


Since lots of the important bits are supposed to expire next year, the patents may or 
may not be useful.

On the other hand, if they can be gotten clear, someone could get a running start, I 
suppose, especially if they made a partnership deal with First Data of some kind, and, 
if First Data was active in that partnership, leveraging their other connections in 
the funds-transfer business, that could be interesting.

On the other other hand, :-), it's entirely clear that people could be developing code 
right now in anticipation of the patent expiration and go live with some kind of land 
rush when it's possible to do so.

Plug a mint into an account at GoldMoney, or e-Gold, or even PayPal, if they partner 
with *them* -- and see what happens...

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: Digicash Patents

[Tim May]

On Thursday, July 31, 2003, at 10:44  AM, R. A. Hettinga wrote:
Since lots of the important bits are supposed to expire next year, the 
patents may or may not be useful.

On the other hand, if they can be gotten clear, someone could get a 
running start, I suppose, especially if they made a partnership deal 
with First Data of some kind, and, if First Data was active in that 
partnership, leveraging their other connections in the funds-transfer 
business, that could be interesting.

On the other other hand, :-), it's entirely clear that people could be 
developing code right now in anticipation of the patent expiration and 
go live with some kind of land rush when it's possible to do so.
Some people expected a "land rush" when the main RSA patents expired 
several years ago. Parties were even thrown. The land rush never 
happened.



--Tim May
"The only purpose for which power can be rightfully exercised over any 
member of a civilized community, against his will, is to prevent harm 
to others. His own good, either physical or moral, is not a sufficient 
warrant." --John Stuart Mill

RE: Digicash Patents

[Patrick]

> > On the other other hand, :-), it's entirely clear that people could
be
> > developing code right now in anticipation of the patent expiration
and
> > go live with some kind of land rush when it's possible to do so.
> 
> Some people expected a "land rush" when the main RSA patents expired
> several years ago. Parties were even thrown. The land rush never
> happened.
>
> --Tim May

True, but look at bitpass.com. $1.5 million in capital for a
micropayments system with no innovations that amounts to... a stunted
version of Paypal?

The beauty of a marketplace is that many different parties get
to try every which way of satisfying a need. Most will fail. Even the
first several attempts can fail, disguising a real opportunity as a
guaranteed failure.


Patrick
lucrative.thirdhost.com

RE: Digicash Patents

[Bill Stewart]

Tim replied to Bob -
> > On the other other hand, :-), it's entirely clear that people could be
> > developing code right now in anticipation of the patent expiration and
> > go live with some kind of land rush when it's possible to do so.
>
> Some people expected a "land rush" when the main RSA patents expired
> several years ago. Parties were even thrown. The land rush never happened.
Hey, the parties were pretty good, and RSA gave out T-shirts :-)
In practice, everybody who really needed to use RSA had
either licensed the technology for a reasonable (or too high) price,
or else was a free software developer violating the patents,
or else was a free or low-key software developer living within RSAREF.
At 01:18 PM 07/31/2003 -0600, Patrick lucrative.thirdhost.com wrote:
The beauty of a marketplace is that many different parties get
to try every which way of satisfying a need. Most will fail.
Even the first several attempts can fail,
disguising a real opportunity as a guaranteed failure.
The Mark Twain Bank people had licensed Chaum's patents,
and their failure had a lot less to do with the cost of licensing
the patent than with their inability to figure out how to
get customers and merchants, and their ability to make it
too difficult to get an account.
Mondex wasn't Chaumian, and it failed, along with a number of
other vaguely cash-like payment systems during the boom.
(I'm referring to the payment systems that handled actual money,
not just the silly Green-stamp emulators like Beenz and Flooz.)
By contrast, the Austin Cypherpunks Credit Union project
figured out that making money would be hard before starting a business,
as well as discovering that dealing with Chaum was also hard,
so they didn't get far enough to fail.
Eric Hughes had some good insights into why
"it's really hard to start a new payment system".
I supposed I'd categorize the efforts into two basic groups
- projects run by banks or bank-like companies that
wanted to actually run a service and hoped to make a profit
- startups funded by VC money that wanted to make startup money,
which depends on VCs and IPOs and Other People's Money,
and is only marginally related to actually making a profit,
though most of them also hoped they'd wildly succeed like other dotcoms.
There may have been a few other types of projects,
but this was most of them.

Re: Digicash Patents

[R. A. Hettinga]

At 11:34 AM -0700 7/31/03, Tim May wrote:
>Some people expected a "land rush" when the main RSA patents expired 
>several years ago. Parties were even thrown. The land rush never 
>happened.

True enough.

Of course, there wasn't much land to rush after, it seems, between the minuscule  and 
easily oligopolized market for digital authentication ("signature" is a bogus word, 
for various reasons, along with "certificate" -- except in the case of bearer ones 
:-)) and the stone-dead market for any other financial cryptography besides 
rudimentary encryption for book-entry settlement was merely the icing on the cake.


If, however, after much experimental trial and error, internet bearer transaction 
costs turn out to be low enough, that might be something to rush after.
 

Remember that the Wrights couldn't sell airplanes worth a damn until Curtiss started 
infringing their patents and selling them to actual people, instead of governments the 
way the Wrights wanted to. That was certainly Chaum's mistake, the mistake of all 
monopolists, these days, to want to create a cartel the same way that Nobel did with 
Dynamite, a single user of blind signature technology for each country or currency.


Like the Wrights and Curtiss, the problem with blind signatures is one of a giant dog 
in the manger in the form of whoever the current greater fool owning the patent 
portfolio at the moment. Curtiss had an easier time of it in pre-16th-Amendment 
America, of course. With government so weak, he just kept selling airplanes like 
proverbial hotcakes, until, champerty being what it is, he was rich enough to sue, the 
Wrights won in court, and then demanded that Curtiss buy them out, since they 
obviously couldn't sell airplanes anyway...
 

In the case of blind signatures, though, you need to plug an underwriting engine into 
a bank account, at least for the first generation, and banks, like corporations, are 
creatures of the state. Not to mention "the law is your enforcement" characteristics 
of the modern book-entry payment system, where the financial industry has completely 
abdicated the integrity of their transaction processes to a perfectly willing 
nation-state, who, in turn, uses those transaction trails to extort more wealth from 
their citizenry. You can't have had the growth of the modern nation state without 
book-entry taxation, like those on individual and corporate income, capital gains, 
property transactions, and so on.
 

So, being in business for an underwriter means having the rights to any patents -- if 
there are any. Since there was no money to invest in such a business at the height of 
the boom, much less these days, and any underwriter now would have to bootstrap from 
practically nothing, even miniscule up-front patent royalties, much less the treat of 
patent litigation against the reserve account, would suck the oxygen out of the room 
and kill such a business before it even started.


And, no, Virginia, pizzling on as people here are wont to do about how bearer 
transactions' *only* markets are illegal ones won't wash. If they can't be done at 
least a few orders of magnitude cheaper than book entry transactions, they'll be about 
as ubiquitous as dirigibles are in modern aviation -- and just as obvious and 
indefensible from physical attack whenever *any* state-based transaction authority 
decides the party's over. 

Besides as any Kazaa user now knows, on the modern internet, everything's illegal 
everywhere all the time, right? Waiting around for some anarchic "rapture" to come 
along to fry the "useless eaters" and fix that logical contradiction is as much a 
waste of time waiting for the biblical one would be.


So, go cheap, or go home, folks. Go so cheap that, like all other really useful 
technology, the use of blind signatures and other internet bearer financial 
cryptography is orthogonal to morality. That nobody *cares* if they're used for 
illegal activities, just like nobody *cares* if whores take MasterCard -- or, to use 
an earlier analogy about automobiles and crime, pimps ride around in Caddies.


Finally, of course, this cost reduction is something we still haven't proven, but, 
hopefully, we'll prove soon enough, or most of us who are left wouldn't still be 
trying to work on this.

That's what I mean by "land rush".

Besides, we don't even know what we're rushing towards. Hell, Oklahoma wasn't much use 
for farming, anyway. It was oil that made the place, right? :-).

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: Digicash Patents

[Tim May]

On Thursday, July 31, 2003, at 12:18  PM, Patrick wrote:

On the other other hand, :-), it's entirely clear that people could
be
developing code right now in anticipation of the patent expiration
and
go live with some kind of land rush when it's possible to do so.
Some people expected a "land rush" when the main RSA patents expired
several years ago. Parties were even thrown. The land rush never
happened.
--Tim May
True, but look at bitpass.com. $1.5 million in capital for a
micropayments system with no innovations that amounts to... a stunted
version of Paypal?
PayPal apparently met the needs of its customers, which was for a 
low-tech, low-security, no anonymity online payment system. While I'm 
not saying I predicted it, neither is it surprising that something like 
it succeeded.

(Members of this very list had some discussions with the guy who 
started PayPal...I wasn't in on this, but I gather that he used some of 
the ideas, but not the high security/untraceability ideas...just the 
online payment low-hanging fruit part. The same is true of EBay, by the 
way, where some of our crowd developed an online system very much like 
what E-Bay became, but several years _after_ the AMiX system. C'est la 
vie.)

In any case, there will be many successes and failures in 
Internet-related business. This list is about certain kinds of these 
systems, but not really about "online payments" in their general form. 
I'm not saying folks can't or shouldn't talk about Mondex or PayPal or 
FastTrack, just that they have little to do with the obvious themes of 
the group.
The beauty of a marketplace is that many different parties get
to try every which way of satisfying a need. Most will fail. Even the
first several attempts can fail, disguising a real opportunity as a
guaranteed failure.
Software patents and the difficulty of "metering" usage has made this 
kind of experimentation, this kind of evolutionary learning, much 
harder to do. For example, when Intel sold the 4004 microprocessor 30 
years ago, it owned a bunch of patents and trade secrets about how the 
chip was made, what it's design was, etc.

But it didn't force potential customers to lay out their business 
plans, to sign "no compete" clauses, and it did not have to devise 
complex ways of knowing how many chips a customer was using. The chips 
metered themselves, metered the patents and other IP, and Intel could 
sell them to guys in garage shops, companies in Boise and Peoria, and 
even to distributors to resell and resell.

Such is not the case with, say, the Digicash software. Since Chaum, 
then the Canadians, then the Indians, then First Data, etc., wanted to 
maximize the payoff and "get a piece of the action," they could not 
simply sell the technology, even bits of it, to guys in garages and 
people with bizarre and untested ideas.

And such software is usually not sold to unidentifiable customers. 
Digicash (or its descendants) will not sell one copy of its core 
technology to a company without draconian safeguards and audits. This 
is part of why a paper trail back to the users of various technologies 
exist when above-board licensing is used. (And why many of us would 
obviously then favor simply _taking_ the technology, ripping it off. 
This cuts the paper and liability trail. Yes, there are minor issues 
with "theft of intellectual property," but this is mostly smoke and 
mirrors anyway. No one in the Western world seems to think ideas in 
general are patentable, so how did RSA get patented? We've had this 
discussion many times over the past 11 years. And more.)

This is replicated all over the digital landscape, where software 
packages have complicated licensing schemes and where vendors want to 
see only "staid and conservative" business plans. No Digicash for 
BlackNet, in other words.

This whole phenomenon has dramatically slowed down exploratory 
developement and weird, new ideas. A couple of guys in a tilt-up in 
Silicon Valley simply cannot just go down to Fry's to buy some parts 
and try out some ideas, not in this world of licenses, audits, lawyers, 
and generally pointless efforts to meter usage.

Which is why doing things without benefit of any patent licenses is the 
best strategy. That this also requires no nexus, no trail back to a 
corporate office, is of course part of why it's the best strategy.

--Tim May

Re: Digicash Patents

[Mac Norton]

I'm not sure that Paypal has met the needs of any enduser yet, so I'd question whether 
it "succeeded."   The rest of what you say seems to be to the point that modern "IP" 
laws tend to discourage creativity. To some extent this may be so, as with 
interminable term extensions, but the most immediate discouragement lies in the DMCA, 
not an "IP" law at all but a grant of rather unprecedented monopoly power, 
irrespective of creative labor, among other items of note.
Macon

-Original Message-
From: Tim May [mailto:[EMAIL PROTECTED]
Sent: Thursday, July 31, 2003 4:35 PM
To: [EMAIL PROTECTED]
Subject: Re: Digicash Patents


PayPal apparently met the needs of its customers, which was for a 
low-tech, low-security, no anonymity online payment system. While I'm 
not saying I predicted it, neither is it surprising that something like 
it succeeded.

(Members of this very list had some discussions with the guy who 
started PayPal...I wasn't in on this, but I gather that he used some of 
the ideas, but not the high security/untraceability ideas...just the 
online payment low-hanging fruit part. The same is true of EBay, by the 
way, where some of our crowd developed an online system very much like 
what E-Bay became, but several years _after_ the AMiX system. C'est la 
vie.)

In any case, there will be many successes and failures in 
Internet-related business. This list is about certain kinds of these 
systems, but not really about "online payments" in their general form. 
I'm not saying folks can't or shouldn't talk about Mondex or PayPal or 
FastTrack, just that they have little to do with the obvious themes of 
the group.
>
>   The beauty of a marketplace is that many different parties get
> to try every which way of satisfying a need. Most will fail. Even the
> first several attempts can fail, disguising a real opportunity as a
> guaranteed failure.
>
Software patents and the difficulty of "metering" usage has made this 
kind of experimentation, this kind of evolutionary learning, much 
harder to do. For example, when Intel sold the 4004 microprocessor 30 
years ago, it owned a bunch of patents and trade secrets about how the 
chip was made, what it's design was, etc.

But it didn't force potential customers to lay out their business 
plans, to sign "no compete" clauses, and it did not have to devise 
complex ways of knowing how many chips a customer was using. The chips 
metered themselves, metered the patents and other IP, and Intel could 
sell them to guys in garage shops, companies in Boise and Peoria, and 
even to distributors to resell and resell.

Such is not the case with, say, the Digicash software. Since Chaum, 
then the Canadians, then the Indians, then First Data, etc., wanted to 
maximize the payoff and "get a piece of the action," they could not 
simply sell the technology, even bits of it, to guys in garages and 
people with bizarre and untested ideas.

And such software is usually not sold to unidentifiable customers. 
Digicash (or its descendants) will not sell one copy of its core 
technology to a company without draconian safeguards and audits. This 
is part of why a paper trail back to the users of various technologies 
exist when above-board licensing is used. (And why many of us would 
obviously then favor simply _taking_ the technology, ripping it off. 
This cuts the paper and liability trail. Yes, there are minor issues 
with "theft of intellectual property," but this is mostly smoke and 
mirrors anyway. No one in the Western world seems to think ideas in 
general are patentable, so how did RSA get patented? We've had this 
discussion many times over the past 11 years. And more.)

This is replicated all over the digital landscape, where software 
packages have complicated licensing schemes and where vendors want to 
see only "staid and conservative" business plans. No Digicash for 
BlackNet, in other words.

This whole phenomenon has dramatically slowed down exploratory 
developement and weird, new ideas. A couple of guys in a tilt-up in 
Silicon Valley simply cannot just go down to Fry's to buy some parts 
and try out some ideas, not in this world of licenses, audits, lawyers, 
and generally pointless efforts to meter usage.

Which is why doing things without benefit of any patent licenses is the 
best strategy. That this also requires no nexus, no trail back to a 
corporate office, is of course part of why it's the best strategy.


--Tim May

Re: Digicash Patents

[James A. Donald]

--
On 3 Aug 2003 at 0:34, Bill Stewart wrote:
> Paypal gave people who wanted to occasionally sell things on
> the net a way to receive payments online, quasi-immediately, 
> without going to the major hassle of becoming a registered 
> credit-card-accepting business,

There is a big problem in that "quasi"

Because paypal payments are reversible, Paypal finds itself
very reluctantly in the business of arbitrating disputes, a
potentially expensive and unpopular business which it does very
badly indeed.

The integration with Ebay was intended to reduce this problem,
since ebay does rather well at arbitrating disputes, but
paypal's arbitration is still universally loathed.

If your business model sticks you with performing arbitration,
you find yourself up against the credit card companies, the
eight hundred pound gorilla of arbitration, who do it well, and
more importantly, do it a lot cheaper than you can.

This provides a strong argument for making your payment service
truly irreversible, that is to say, Chaumian. 

--digsig
 James A. Donald
 6YeGpsZR+nOTh/cGwvITnSR3TdzclVpR0+pr3YYQdkG
 wPTF3iJd+YV5zLY6lEBVNFkcGnmNYeC0BBOiAKnK
 4B0UcuuS/khYebiuvTgWDuOOyEiINiAP276pz+oZe

RE: Digicash Patents

[Lucky Green]

Tim wrote:
> Some people expected a "land rush" when the main RSA patents expired 
> several years ago. Parties were even thrown. The land rush never 
> happened.

Just a reminder that there will be a Blind Signature Patent Expiry party
at my place the Saturday before the blind signature patent expires. (The
patent expires on a Tuesday. I called dibs on that party years ago).

--Lucky

Re: Digicash Patents, patent-expiry landrushes

[Major Variola (ret)]

At 11:34 AM 7/31/03 -0700, Tim May wrote:
>Some people expected a "land rush" when the main RSA patents expired
>several years ago. Parties were even thrown. The land rush never
>happened.

Wrong.  RSA algorithm is used freely now in US designs, knowing it is no
longer
patented.  I didn't go to any party, but I flipped a bit in my cranial
store indicating
that it could be used freely.  And this is/was critical, because whereas
a block
cipher (eg IDEA) can be replaced, RSA can't in some apps.

As someone currently rolling his own RSA by setting up the bignums in C,
it is a relief
to be free of patent issues.  I don't believe this would have been the
case before
the expiry.  (This is for embedded devices, I'm not reinventing a
protocol wheel.)

I'll predict a similarly invisible "land rush" when ECC patents run out,
assuming
that its patented and also considered useful when the supposed patents
expire.

Re: Digicash Patents, patent-expiry landrushes

[Mike Rosing]

On Fri, 1 Aug 2003, Major Variola (ret) wrote:

> I'll predict a similarly invisible "land rush" when ECC patents run out,
> assuming
> that its patented and also considered useful when the supposed patents
> expire.

the major one is hardware, and it expires in april 2005.  A minor one is
MQV, and it expires soon after.  Otherwise, there's not that many patents
on ECC.  No need to, people keep finding faster ways of doing things and
publishing it :-)

Patience, persistence, truth,
Dr. mike