[fc-discuss] Financial Cryptography Update: Extra Financial Cryptographic Engineering

iang@iang.org iang@iang.org
Sun, 2 Oct 2005 20:40:36 +0100 (BST)

 Financial Cryptography Update: Extra Financial Cryptographic Engineering 

                            October 02, 2005




Patrick announces his Loom system, which basically (AFAICS) allows
slicing and dicing amounts into URLs that are distinguished by a SHA1
hash.  Each piece of value can be placed into a new location with a new
SHA1 hash, and as long as the SHA1 hash is kept secret, so is the dosh.


This bears comparison to epointsystem.org's ePoints which employ a
similer slicing and dicing method.  This system is heavily
crypto-oriented but by repute employs a simple server that only offers
two primitives:  split, and combine.

Also, the use of SHA1 numbers as essentially big random numbers is what
I use in my BRN extension to Ricardo, which is designed to do all the
infrastructure behind blinded token money, without the blinding. 
(Serious students of FC will know that the blinding is about 2000 lines
of code, and the rest is about two orders of magnitude larger,
depending...  so BRN creates an independent break between the precise
blinding formula and the code that deals the tokens.)

What then is perhaps more interesting to the financial cryptographer is
not the mechanism but the metaphor.  By describing the BRN as a
"location" in cyberspace, and the transfer as a placing of gold in a
secret place, Patrick seems to have inspired his nearby supporters more
than any description of crypto blah blah ever could.

There appears to be a new generation of hackers coming forth with money
systems.  I suspect this is because of the rise of p2p systems, which
bring with them horrific problems in economic coordination.  To my
knowledge, only MojoNet (now MNET) addressed these challenges seriously
with techniques known here but that story remains undocumented in FC
annals (*hint*, *hint* !!!).

Meanwhile, in the Community currency field, there are now several
systems offering basic accounting mechanisms.  These have a much lower
security threshold, befitting their community heritage.  Although some
would argue this is mistake as community currencies often collapse at
the point of success (as measured by being valuable enough to steal), I
don't see it so dogmatically;  like all communities, the CC world has
to experiment, win a few and lose a few, in order to find out which of
their assumptions were right and which wrong.


So my question is whether we now have sufficient FC activity to run
another EFCE?  Have the doldrums of FC passed, and is it time to make
the pilgrimage to the hallowed halls of the Signet Library, or do we
need another E-First City in Europe?

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