[Cryptography] Anonymous rendezvous (was Business opportunities in crypto)

[Jerry Leichter]

> 
>> What exactly is "reputation" if not (a) an implicit communication through intermediaries to deliver information about the party involved; (b) trusted third parties:  You are trusting their evaluations.  Zero for two.
> 
> There is another form of reputation which comes from repeated contact over time. If I place orders for goods or services with an anonymous party, and I get good service, that party builds a good reputation. Let's say I know this anonymous party by demonstrations that is holds the private key associated with a public key I know.
Yes.  Continuity of connection is an important element.

> I can share that public key with a group that can pool its experiences to build trust in this anonymous party. After a while, the anonymous party may achieve quite a high reputation.
This is where things work well in the small - among a group of people who know and already trust each other - but fail in the large.  Trust isn't transitive.  Turn your small group of friends into an open group and you'll quickly get useful reputations from parties you don't already know - and shortly after that, fake reputations from large numbers of people who are paid to up- or down-rank people and organizations.  It happens today.

> Where this system falls down is in the temptation for the anonymous party to cash in its reputation capital. There is an actual example of this behaviour from the 1960s. ... T.M.Chan developed a very favorable reputation. Then, while it still accepted orders and payments, it stopped shipping. After 1/2 to 3/4 of a year, people tried to track it down and it had disappeared. They cashed in their reputation capital.
There's another kind of failure which I've heard described, but I don't have any solid evidence about.  Allegedly, there is at least one, err, entrepreneur in China who looks for companies with great reputations for quality, buys them, and then drops the quality.  People are still willing to buy even at high prices because the products have always been the highest quality.  Eventually, word gets out that "XYZ brand ZZZ's" aren't what they used to be.  Then the price is dropped somewhat.  A new group of buyers, who had really wanted those fine XYZ ZZZ's before but could never afford them now see the stuff as a bargain.  They aren't plugged in to the network of previous buyers so don't know what to expect.  Eventually they become disenchanted as well.  Repeat further down-market.  After a while, the pool of potential suckers is drained, and the entrepreneur ditches the whole business and moves on to the next brand.
                                                        -- Jerry