[cryptography] Digital cash in the news...

James A. Donald jamesd at echeque.com
Wed Jun 15 01:48:29 EDT 2011

On 2011-06-15 7:58 AM, Nico Williams wrote:
> Let's say you have an unbreakable code.

Which we do.

> But there's still traffic
> analysis, and even with onion routing and such, you don't know if your
> peers are ratting you out,

If one of the mixers is my own, I know that that mixer is not ratting me 

One valid mixer in the chain is sufficient to be a serious obstacle to 
the state.  Two is very serious obstacle.  And chances are that both I 
and the guy I am talking to are running our own mixers.

> Do the same thought experiment regarding cryptographic coins if you
> like.  The state could easily make it so insignificant amounts of
> business gets transacted in a cryptographic coin that the state cannot
> subvert or control.

I observe that a large part of the world's economy is run though virtual 
private networks running through tax haven islands.  Looks to me that 
the horse is already bolting.  Wealthy individuals and big corporations 
use transferable promises to pay by other wealthy individuals 
transferred over video conference as money, which hawala like money is 
difficult or impossible for the state to track.

So for the very rich, particularly wealthy Chinese businessmen located 
outside of China, the cypherpunk program is becoming real. 
Unfortunately, it is not becoming real for cypherpunks, who hoped that 
the white middle class would get in on it.  But *some* people are 
getting in on it.

Chinese are respectful of authority, and superficially compliant, but 
they have a long history of quiet evasion and subtle resistance, so are 
naturally inclined to cypherpunkish solutions.   The growth of China is 
in substantial part the growth of the economy mediated by virtual 
private networks.  Much of the Chinese economy, notably real estate 
development and mining, is transparent to the state and run by companies 
that legally Chinese, and Chinese in reality, but much of the Chinese 
economy, notably hi tech, is run by companies that are not legally 
Chinese, indeed their location is hard to find.

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