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The following archive was created by hippie-mail 7.98617-22 on Sat Apr 10 1999 - 01:18:26
Ian Grigg (iang@systemics.com)
Sat, 6 Feb 1999 10:51:39 -0400 (AST)
Robin Lee Powell said:
> I'd like to hear people's comments on this; I've seen it before (in a
> slightly different form, I think), and I think it's a good idea,
It depends which bit you are referring to. The PR is, um, oriented
towards marketing needs, and doesn't give a good picture as to what
is happening. I'll try and describe it here. This note is rather
lengthy; it describes the structural details first, bottom up, then
the cash details later.
The e-gold.com system is a fairly conventional accounting system
that lives on an SSL webserver. The organisation provides metals-
denominated accounts so that users can do transfers between each
other on different metals. Primarily gold, but also silver,
platinum and palladium.
For each gram of accounted gold available to users, called "e-gold,"
there is a gram of physical metal held somewhere. Most of the
metal is held in Switzerland, in the vaults of a specialist metals
warehouse operation.
To get metal into the system, you either send them your metal, or
send them cash, and they buy the metal for you. The converse also
works, of course. That's e-gold: fairly boring, in crypto terms,
as it is just accounting protected by SSL, and not much more than
the average banking site. That is of course precisely what you
want for this sort of operation.
Now, on top of that, the DigiGold.net organisation (a related
new group) are going to issue a digital currency. In governance
terms this is very interesting, because in order to "back" the
digital currency, DigiGold.net are going to maintain an account
with e-gold.com, and both the digital currency server and the
e-gold server will reveal some vital statistics concerning float
and reserves. This results in a three- tiered, auditable
structure: gold at the bottom, e-gold as the available medium,
and DigiGold as the digital currency.
This might seem a round-about way of doing things, but it makes
a lot of sense from the point of view of trying to build a
structure that people can examine dynamically over the net, and
develop long-term confidence in.
The digital currency, DigiGold, is done using the Ricardo system
from Systemics. This design is fairly classical, as value systems
go, with clients, a protocol and servers. Client is called
WebFunds and is all-Java. Servers are half Java, half Perl.
The protocol, the more interesting part, is called SOX (for Systemics
Open Transactions) and was designed and written by Gary Howland. It
is a nymous transfer protocol, with three phases. The first phase
is called registration, with key exchange, time sync, and public
key registration included. This phase sets up a secure communications
method between the client and the server, with public key crypto
negotiated into secret session keys, all protected by times for
replay.
The second phase is the transfer between public keys. In the
nymous concept, the public key is the identity, and the secret
key gives access to the funds stored within.
The very important third phase is the mailbox. Simply put, the
client gets mail from the server, and signs for it. This feature
allows both reliability and simplicity throughout, as all transfers
can be send-and-forget.
or each transfer, Ivan the Issuer creates two receipts, one
each for Alice, the payee, and Bob, the payer. These are
deposited in their respective mailboxes, and also *optionally*
returned during the transfer phase.
In order to make the protocol work, Ivan is nasty towards the
participants. He forces Alice to sign for her receipts, and
refuses to reveal what is in an account. In this way, Alice
must store receipts reliably (tough in Java), and thus the
system achieves a shared database - both Ivan and Alice hold
exactly the same information. This is Nirvana for dispute
resolution, but it a bit tough on the programmers, who have
to bear the brunt of customer anger.
> but I'm not convinced as to their crypto-saavy.
SOX, and Ricardo, is built on Cryptix - and to be historically
accurate, Cryptix was originally written to support this exact
application. When we had finally got it written and debugged,
we felt that it would be too hard to maintain within a small
company, so pushed it out as freeware. Cryptix now has a huge
user base in Java crypto, whilst the Perl version never really
took off (not because of its own lacking, just that there was
never much interest).
On the biz side, the DigiGold people have asked for a demo and a
talk about it at FC99.ai, which is an annual conference on this
business - that which we call Financial Cryptography. Happening
at a Caribbean Island near you, last week of February.
iang
Notes:
DigiGold.net will issue DigiGold, and hold reserves in e-gold.
www.e-gold.com store the base metal and give you e-gold.
SOX: http://www.systemics.com/docs/sox/overview.html is SOX1
(we are now using SOX2, but the ideas are proven and retained)
Ricardo: http://www.systemics.com/docs/ricardo/ is all doco, albeit
a little rusty, as it is the previous version.
fc99.ai is where we people meet and argue about cash and not-cash.
www.cryptix.org is where the Java world gets its free privacy
The following archive was created by hippie-mail 7.98617-22 on Sat Apr 10 1999 - 01:18:26