Re: Street Performer Protocol

[Robert Hettinga <rah@shipwright.com>]

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At 7:28 PM -0400 on 6/9/99, Bruce Schneier wrote:


> I'm sure others have talked about this type of thing before

If this is what I think it is, the e$lves and I have even hyperneologized it,
and more than once. :-).

We call it a geodesic recursive auction market, or, when we're in our cups, a
geo-recursive market.

Jason Cronk did a quick and dirty talk on the sell side, and Ian Grigg did
another one on the buy side, both at the FC97 rump session. They also cited
Hughes at the time, though, obviously, I wouldn't be surprised if someone else
got there before, as it *is* kind of a mechanical result(1).

The quick and dirty version is, when you have ubiquitous strong cryptography
and a decent digital bearer cash-settlement mechanism, you get
institutionalized piracy as a matter of course, with people selling whatever
copies of whatever software (enterpreted broadly to include what marketroids
call "content") they have on hand, for the highest price available, and as
often as possible, if only to earn back as much as possible of the cost of
*their* copy.

Oddly enough, this is just fine, because, we claim, (and nobody's done the
math yet, but it should work), the person who does *new* stuff in this kind of
market should almost *always* earn the most profit. No matter how much the
product is "pirated" in subsequent recursive auctions, the highest auction
prices, and thus highest net revenue, is almost always paid to the person who
auctions the software first, i.e., economic rent, if any, is always conserved.
Madonna always makes more money than any other single person in the
"value-chain", to speak more marketese.

In the case of a geo-recursive auction, the people who get clobbered are the
distributors of intellectual "property", but, frankly, that's what the
internet does to them, anyway. Life is hard.

Cheers,
RAH

(1.) Ignoring, of course, Shoppenhauer's observation that every good new idea
is first laughed at, then attacked vehemently, and then taken to be obvious
:-).

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Robert A. Hettinga <mailto: rah@ibuc.com>
The Digital Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'