ciphers, to allow real-time audio and video streams to be encrypted). There are profound constitutional issues involved, in the U.S. at least. The various rights enumerated in the Bill of Rights would seem to make it impossible for the U.S. government to specify the forms of speech, to insist that locks have keys escrowed with the police, and so forth. Many observers expect cryptography restrictions to face strong challenge on constitutional grounds, and, in fact, a few cases are in the court system, challenging various provisions of U.S. cryptography policy (especially the export provisions of the Munitions Act and related restrictions).
This debate is still going on, and itâs too soon to tell if the âGreat Crypto Crackdownâ will succeed. Certainly there are many reasons to expect that itâs far too late to suppress such technologies, that millions of users will not lightly go to âpostcardsâ for their communications, and that concerns about government corruption, secret FBI dossiers, and economic espionage will undermine Big Brotherâs efforts to control the communications of âcitizen-units.â
Digital Money and Electronic Commerce
This is one of the most exciting frontiers, and one of the most publicized. But it is also one of the hardest to implement correctly. Money intrinsically involves stores of value, transfers of value, institutions, and various interlocking webs of regulations, so implementing digital money correctly has not come easily. In fact, the history of digital money lies mostly in the future. The early years of the new century should see many of the current problems resolved.
Digital cash, untraceable and anonymous (like real cash), is coming, though various technical and practical hurdles remain. What have been dubbed âSwiss banks in cyberspaceâ will make economic transactions much more liquid and much less subject to local rules and regulations. Tax avoidance is likely to be a major attraction for many. One example to consider is the work under way to develop anonymous, untraceable systems for âcyberspace casinos.â While not as attractive to many as elegant casinos, the popularity of ânumbers gamesâ and bookies in general suggests an opportunity to pursue; this is but one of many new opportunities digital money will offer.
By digital money I do not mean the various kinds of electronic funds transfers, automated teller machine transactions, wire transfers, etc. that already exist in so many forms. Nor do I mean the various âsmart cardâ systems that some claim to be âdigital money,â even âuntraceable digital cashâ (in some notorious examples involving flawed protocols). Rather, our focus is on instruments that are actually untraceable in a strong sense. Again, Chaum was the pioneer in this area, and his company DigiCash is the exemplar of digital money at this time, with several large banks cooperating in joint ventures to issue DigiCash. Digital money probably will not be âdigital currency,â in the sense that dollars, yen, and marks are currency. Rather, it will be more like the various financial instruments, denominated in various currencies, such as checks, bearer bonds, letters of credit, promissory notes, chop marks, and even IOUs.
Alice and Bob can exchange digital cash in this way: Alice goes to a bank, submits to the bank a kind of number, and receives a modified form of this number from the bank. Itâs as if the bank has stamped her number with a âGood for 100 Digimarksâ stamp. Ordinarily this number would of course be traceable, but Alice can perform a special operation on this number (âunblindingâ it) which makes it unlinkable to her original purchase of the number. She can then send this number to Bob, perhaps even through an anonymous remailer, and Bob can then present this number to the bank for redemption. The bank can recognize the number as one that it
The Cricket on the Hearth