Re: <nettime> How DigiCash Blew Everything (complete)

["David S. Bennahum" <davidsol@panix.com>]

Thanks for this very interesting history of DigiCash.  I met David Chaum
and interviewed him in 1995.  The description of Chaum's personality
matches the impression he gave me during out our face-to-face conversation.
In many ways the DigiCash saga is similar to another high-flying visionary
company: General Magic.  There are some eerie parallels between the two,
both in their grandiose universal attempts at brand identity, and their
gambit to create a monopoly on the electronic agora of the future (DigiCash
via "cash"; General Magic via "intelligient agents").

This report, however, left me wondering about several things.  When I met
David, he gave me the impression that DigiCash owned the patents on the
cryptographic algorithms that made their currency both trusted yet
anonymous, mobile yet redeemable.  Now that the company is bust, what is
the status of their patents?  And, if the patents were say to be kept by
Chaum, what limit would this place on the future creation of "digicash" by
another company, using the same model?

The odd, and troubling, thing about digital cash is that, were it to be
adopted, a commercial entity would own the underlying technology making it
"money."  It's as if a company today owned the technology behind "paper
money" and, by analogy, every nation in the world had to pay that company a
fee to print the stuff.  That's an aspect of Chaum's scheme I never quite
understood.  If digital cash were to actually replace cash, wouldn't the
owner of the patented algorithms wind up being (inter)"nationalized" by the
Federal Reserve and its equivalent in other countries?  Given these
questions, it's hard to imagine how DigiCash could have ever succeeded,
even with the most brilliant and nimble of CEOs.

David


.................................................................
. David S. Bennahum, Contributing Editor, W I R E D             .
. bennahum@wired.com  212 * 822 * 0255 v.  212 * 822 * 0222 f.  .
. W I R E D, 16 West 19th St., 11th Floor, NY NY 10011 USA      .
.................................................................
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