[Cryptography] Am I missing something about CBDC ?

Robert Hettinga hettinga at gmail.com
Fri Dec 25 13:30:38 EST 2020

> On Dec 20, 2020, at 10:16 AM, Bryan Bishop <kanzure at gmail.com> wrote:
> What happened to that project- did it get into production, and how did it go?

You should have read further on. Absolutely nowhere. It never even became a project. :-) 

TLDR: Dot-bomb. (No more money. We managed to get a few consulting gigs to keep going after about June of 1999, and nothing at all after about a year later) Then 9/11. (OMFG.) Then KYC. (No more new money, forever, for anything like anonymity.) Declan McCullough even wrote an article in Wired making me look for all the world like the Feral Kid in Mad Max shortly before 9/11. Not too far from the truth, in hindsight. :-) 

Oh. And Bitcoin. Which proved that you can do a cash-equivalent commodity, at least, Perry once called it an ‘electrical potlatch’, but one without proof of stake, which is useful for, you know, finance. :-)

> Also, why was Digicash's ecash only deployed in little "fiefdoms" instead of a central clearing model?

It didn’t need to be. Most finance is done on the “fiefdom" model. A securities underwriting, for instance, ain’t called a ’syndicate’ for nothin’. Bearer transactions, digital otherwise, are done between a buyer, a seller, and an underwriter, explicitly in digital form, and implicitly in paper. 

A wire transfer doesn’t require a central bank at all, as long as the banks involved have an account in each other. You change a number on your books and I’ll change an offsetting number on mine. The creation of a clearinghouse allows strangers to change numbers on a third party’s books, and even then you just need a bank in common. CREST was just a database mirror of all the custodial banks in the UK and Ireland, remember.

As for blind signature notes as bearer certificates, maybe even someday, but it could be that David Chaum was Otto Lilienthal and not the Wright Brothers.

The patents, by the way, ended up at whatsitsname — Bob is Old and so is this story -- the giant card services processor, after changing hands several times. I liken it to the last scene of Raiders of the Lost Ark, with the blind signature patent being trundled off into the anonymous distance of a large underground storage facility. Except that in 2003 the patent went ‘poof’, and hey, presto, nothing happened anyway. See KYC, etc., above.

The whole thing was a bet that, if it worked, all this perfectly pseudonymous Crypto-Anarchy stuff would be cheaper than book entry settlement by three orders of magnitude. Hasn’t proven to be so. And bitcoin, um, lowered the bar quite a bit, at least for cash-equivalent commodities. Tim May called it the greatest innovation since double entry bookkeeping, or something...


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