True Names and the Opening of the Cyberspace Frontier by Vernor Vinge Read Free Book Online Page B

issued, through some manipulations, but cannot link it with Alice. Full-blown digital cash is both payer- and payee-unlinkable. Some of the current proposals being floated limit the untraceability to only partial untraceability, presumably to satisfy the concerns of government and law-enforcement critics of full untraceability. Cypherpunks Ian Goldberg, Doug Barnes, and others have developed methods to make even this partially traceable form fully untraceable.
    The actual details involve some complicated math and need careful thought to get straight, which this article cannot cover. Bruce Schneier’s Applied Cryptography has a good explanation of how Chaumian digital cash works, and Scientific American has also carried some good articles.
    It is often claimed that “digital currencies” will not gain widespread acceptance, let alone the support of governments. If digital money is viewed as a transfer mechanism, and not as a competitor to currency or specie (gold, silver, etc.), then the support of governments is less of an issue, perhaps even a non-issue, because banks have done quite well without explicit governmental sanction of their instruments. And in the international realm, there already is not much of a governmental role: banks have worked out mechanisms for dealing with each other, and for dealing with entities with a reputation for misbehavior. As we will see, international trade represents a kind of anarchy.
    There are many reasons for using untraceable digital cash. Some people simply prefer to pay cash for various reasons, and see no reason why electronic transactions should have more traceability than ordinary folding-money transactions have. Others fear the compilation of dossiers on spending habits, travel agendas, and so forth. Untraceable digital money protects the privacy of economic transactions, just as cash does today. With increasingly powerful networks of ATM and check-processing systems, the development of “shopping profiles” is a concern for anyone interested in privacy. Having insurance companies and employers gaining access to purchasing habits is undesirable; such access could, at its extreme, lead to law enforcement midnight raids on persons suspected of various crimes because of legal purchases they might have made. Untraceable digital money provides protection against this.
    Making automated toll-road payments with untraceable digital cash is one obvious use. Digicash is working with European governments to deploy digital money for this sort of application.
    There are, of course, various transactions involving anonymity, digital pseudonyms, and illegal items that only an untraceable digital cash system makes possible. And some novel applications are new. For example, “perpetual trusts” could be constructed by purchasing a large number of digital money instruments, perhaps being converted regularly to other such instruments. Because they are untraceable, there is no means of, say, canceling the numbers to stop the perpetual trust. Thus, as a hypothetical, no one—certainly not the bankers—will know that which of the instruments are part of the perpetual trust Bill Gates creates in 2010 with ten billion dollars … and this trust could still exist a century later, untouched by taxation and not even really domiciled in any particular nation. Contracts using such digital money instruments could similarly be of this “fire and forget” sort. Thus can fortunes be directed toward specific purposes, beyond the reach of governments. (For the curious, digital time-stamping and cryptographic timed-release techniques are needed to insure that the humans involved don’t violate the contract originally set up.)
    There are, of course, many reasons not to use untraceable digital cash. Businesses typically need to show records of expenses to deduct against gross sales. The simplest example of this involves anonymous payments to employees: few