the limits of crypto and authentication

[R.A. Hettinga]

At 2:48 PM -0700 7/12/05, Bill Stewart wrote:
>It'd be nice if good crypto and authentication methods
>could create a market for improved products

It can, it does, and it's called significantly reduced risk-adjusted
transaction cost in financial econ-speak. Maybe the marketing droids need
to come up with a 50's-era "secret" ingredient, a cryptographic
"Floristan(tm)", but frankly, I don't think they're going to have to.

Frankly, however, I think that reduced transaction costs creates
*dis*economies of scale by reducing barriers to market entry and thus
firm-size, and reducing proprietary anything to fungible graded commodities
traded in so-called (see your Econ 51 textbook) perfectly competitive
markets, instead of monopolistic competition (brands, trademarks, patents
and other artifacts of batch-driven industrial production), which is what
we have today. Think of it as the financial equivalent of grey-goo, or,
better, blood-music, or whatever.

Linux vs Novel/MS-DOS/Unix(tm) for instance, or, again better, IETF-esque
protocols replacing various proprietary secret-sauce bit-slinging methods.

BTW, Perry, I think that as we get to online instantaneity for every
transaction, we eventually converge to pre-underwritten pre-encrypted
pre-authenticated quasi-anonymous unique value-bits circulating on public
networks: internet bearer financial cryptography protocols, in other words.

Cheers,
RAH
"But you *knew* I was gonna say *that*, right?"
-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
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'

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