diff --git a/15-Reputations-and-Credentials/15-Reputations-and-Credentials.md b/15-Reputations-and-Credentials/15-Reputations-and-Credentials.md new file mode 100644 index 0000000..923e01e --- /dev/null +++ b/15-Reputations-and-Credentials/15-Reputations-and-Credentials.md @@ -0,0 +1,310 @@ +15. Reputations and Credentials + + 15.1. copyright + THE CYPHERNOMICON: Cypherpunks FAQ and More, Version 0.666, + 1994-09-10, Copyright Timothy C. May. All rights reserved. + See the detailed disclaimer. Use short sections under "fair + use" provisions, with appropriate credit, but don't put your + name on my words. + + 15.2. SUMMARY: Reputations and Credentials + 15.2.1. Main Points + - "a man's word is his bond" + - reputations matter + - the expectation of future interaction/business is crucial + 15.2.2. Connections to Other Sections + - see section on Crypto Anarchy for why reputations matter + 15.2.3. Where to Find Additional Information + - very little published on this + - Bruce Benson's "The Enterprise of Law" + 15.2.4. Miscellaneous Comments + - this is another "transition" chapter, laying the groundwork + for Crypto Anarchy + + 15.3. The Nature of Reputations + 15.3.1. The claim by many of us that "reputations" will take care of + many problems in crypto anarchic markets is disputed by some + (notably Eric Hughes). To be sure, it will not be a trivial + issue. Institutions take years or decades to evolve. + 15.3.2. However, think of how often we use reputations: friends, + books, movies, restaurants, etc + 15.3.3. Reputations and other institutions will take time to evolve. + Saying "the market will talke care of things" may be true, + but this may take time. The "invisible hand" doesn't + necessarily move swiftly. + 15.3.4. "What are 'reputations' and why are they so important?" + - a vague concept related to degree of believability, of + trust, etc. + + "we know it when we see it" + - (sorry for the cop out, but I don't have a good + definition handy....James Donald says studying reputatons + is "nominalist hot air" [1994-09-02], but I think it's + quite important) + + obvious, in ordinary life, but in the cyberspatial context + - reputation-based systems + - escrow, expectations + - "reputation capital" + - like book or music recommendations + - web of trust (is different than just "trust"---tensor, + rather than scalar) + + Actually very common: how most of us deal with our friends, + our enemies, the books we read, the restaurants we + frequent, etc. + - we mentally downcheck and upcheck on the basis of + experience; we learn + - Are there examples? + - Eric's objections + 15.3.5. "How are reputations acquired, ruined, transferred, etc.?" + + First, reputations are not "owned" by the person to whom + they are attached by others + + the algebra is tricky...maybe Eric Hughes or one of the + other pure math types can help straighten out the + "calculus of reputations" + - reputations are not symmetric: just because Alice + esteems Bob does mean the reverse is so + - reputations are not transitive, though they are + partially transitive: if Alice esteems Bob and Bob + esteems Charles, this may cause Alice to be somewhat + more esteemful of Charles. + - a tensor matrix? + - a graph? + + Any holder of a reputation can "spend" some of his + reputation capital + - in praise or criticism of another agent + - in reviews (think of Siskel and Ebert "spending" some of + their reputation capital in the praise of a movie, and + how their own reptutations will go up and down as a + function of many things, including especially how much + the viewing audience agrees with them) + 15.3.6. "Are they foolproof? Are all the questions answered?" + - Of course not. + - And Eric Hughes has in the past said that too much + importance is being invested in this idea of reputations, + though many or even most of us (who comment on the matter) + clearly think otherwise. + - In any case, much more study is needed. Hal Finney and I + have debated this a couple of times (first on the + Extropians list, then a couple or more times on the + Cypherpunks list), and we are mostly in agreement that this + area is very promising and is deserving of much more + thought--and even experimentation. (One of my interests in + crypto simulations, in "protocol ecologies," is to simulate + agents which play games involving reputations, spoofing, + transfers of reputations, etc.) + 15.3.7. Reputations have many aspects + + the trading firm which runs others people's money is + probably less "reputable" in an important sense than the + trading firm in which partners have their own personal + fortunes riding....or at least I know which one I'd trust! + - (But how to guarantee one isn't being fooled, by a spoof, + a sham? Hard to say. Perhaps the "encrypted open books" + protocol Eric Hughes is working on will be of use here.) + + 15.4. Reputations, Institutions + + 15.5. Reputation-Based Systems and Agoric Open Systems + 15.5.1. Evolutionary systems and markets + + markets, emergent order, Hayek, connectionism + - many related ideas...spontaneous order, self interest, + agents, etc. + + a critique of "blind rationalism" + - or hyperrationalism, the idea that a form model can + always be found + - order can develop even in anonymous systems, provding + certain types of contacts are established, certain other + things + 15.5.2. shell games...who knows what? + 15.5.3. key is that would-be "burners" must never know when they are + actually being tested + - with devastating effects if they burn the tester + + example: how to guarantee (to some degree of certainty) + that an anonymous bank is not renegging (or whatever)? + - e.g., a Swiss bank that denies knowledge of an account + - key is that bank never know when a withdrawal is just a + test (and these tests may be done frequently) + - the importance of repeat business + 15.5.4. another key: repeat business....when the gains from burning + someone are greater than the expected future business..... + 15.5.5. reputations are what keep CA systems from degenerating into + flamefests + - digital pseudonyms mean a trail is left, kill files can be + used, and people will take care about what they say + - and the systems will not be truly anonymous: some people + will see the same other people, allowing the development of + histories and continued interactions (recall that in cases + where no future interaction is exected, rudeness and + flaming creeps in) + + "Rumormonger" at Apple (and elsewhere) always degenerates + into flames and crudities, says Johann Strandberg + - but this is what reputations will partly offset + 15.5.6. "brilliant pennies" scam + 15.5.7. "reputation float" is how money can be pulled out of the + future value of a reputation + 15.5.8. Reputation-based systems and repeat business + + reputations matter...this is the main basis of our economic + system + - repeat business....people stop doing business with those + they don't trust, or who mistreat them, or those who just + don't seem to be reputable + - and even in centrally-controlled systems, reputations + matter (can't force people to undertake some relations) + - credit ratings (even for pseudonyms) matter + - escrow agents, bonding, etc. + - criminal systems still rely on reputations and even on + honor + - ironically, it is often in cases where there are + restrictions on choice that the advantages of reputations + are lost, as when the government bans discrimination, + limits choice, or insists on determining who can do + business with who + + Repeat business is the most important aspect + - granularity of transactions, cash flow, game-theoretic + analysis of advantages of "defecting" + - anytime a transaction has a value that is very large + (compared to expected future profits from transactions, + or on absolute basis), watch out + - ideally, a series of smaller transactions are more + conducive to fair trading...for example, if one gets a + bad meal at a restaurant, one avoids that restaurant in + the future, rather than suing (even though one can claim + to have been "damaged") + - issues of contract as well + + 15.6. Reputations and Evolutionary Game Theory + 15.6.1. game of "chicken," where gaining a rep as tough guy, or king + of the hill, can head off many future challenges (and hence + aid in survival, differential reproduction) + + 15.7. Positive Reputations + 15.7.1. better than negative reputations, because neg reps can be + discarded by pseudonym holdes (neg reps are like allowing a + credit card to be used then abandoned with a debt on it) + 15.7.2. "reputation capital" + + 15.8. Practical Examples + 15.8.1. "Are there any actual examples of software-mediated + reputation systems?" + - credit databases...positive and negative reputations + 15.8.2. Absent laws which ban strong crypto (and such laws are + themselves nearly unenforceable), it will be essentially + impossible to stop anonymous transactions and purely + reputation-based systems. + - For example, Pr0duct Cypher and Sue D. Nym will be able to + use private channels of their own choosing (possibly using + anonymous pools, etc.) to communicate and arrange deals. If + some form of digital cash exists, they will even be able to + transfer this cash. (If not, barter of informations, + whatever.) + - So, the issues raised by Hal Finney and others, expressing + doubts about the adequacy of reputation capital as a + building block (and good concerns they are, by the way), + become moot. Society cannot stop willing participants from + using reputation and anonymity. This is a major theme of + crypto anarchy: the bypassing of convention by willing + participants. + + If Alice and Bob don't care that their physical identies + are unknown to each other, why should we care? That is, why + should society step in and try to ban this arrangement? + - they won't be using "our" court systems, so that's not an + issue (and longer term, PPLs will take the place of + courts, many of us feel) + - only if Alice and Bob are counting on society, on third + parties to the transaction, to do certain things, can + society make a claim to be involved + - (A main reason to try to ban anonymity will be to stop + "bad" activities, which is a separate issue; banning of + "bad" activity is usually pointless, and leads to + repressive states. But I digress.) + 15.8.3. Part of the "phase change": people opt out of the permission- + slip society via strong crypto, making their own decisions on + who to trust, who to deal with, who to make financial + arrangements with + + example: credit rating agencies that are not traceable, not + prosecutable in any court...people deal with them only if + they think they are getting value for their money + - no silly rules that credit rating data can "only" go back + some arbitrary number of years (7, in U.S.)...no silly + rules about how certain bankruptcies "can't" be + considered, how one's record is to be "cleared" if + conditions are met, etc. + - rather, all data are considered....customer decides how + to weight the data...(if a customer is too persnickety + about past lapsed bills, or a bad debt many years in the + past, he'll find himself never lending any money, so the + "invisible hand" of the free market will tend to correct + such overzealousnesses) + + data havens, credit havens, etc. (often called "offshore + data havens," as the current way to do this would be to + locate in Caymans, Isle of Man, etc.) + - but clearly they can be "offshore in cyberspace" + (anonymous links, etc.) + + 15.9. Credentials and Reputations + 15.9.1. debate about credentials vs. reputations + - James Donald, Hal Finney, etc. + - (insert details of debate here) + 15.9.2. Credentials are not as important as many people seem to think + - "Permisssion slips" for various behaviors: drinking age, + admission to movie theaters, business licenses, licenses to + drive taxicabs, to read palms (yes, here in Santa Cruz one + must have a palm-reading license, separate from the normal + "business license") + + Such credentials often are inappropriate extensions of + state power into matters which only parents should handle + - underage drinking? Not my problem! Don't force bars to be + babysitters. + - underage viewing of movies? Ditto, even more so. + 15.9.3. Proving possession of some credential + +15.10. Fraud and False Accusations + 15.10.1. "What if someone makes a false accusation?" + - one's belief in an assertion is an emergent phenomenon + + assertion does not equal proof + - (even "proof" is variable, too) + - false claims eventually reflect on false claimant + 15.10.2. Scams, Ponzi Schemes, and Oceania + + Scams in cyberspace will abound + - anonymous systems will worsen the situaion in some ways, + but perhaps help in other ways + - certainly there is the risk of losing one's electronic + cash very quickly and irretrievably (it's pretty far gone + once it's passed through several remailers) + - conpersons (can't say "con men" anymore!) will be there, + too + + Many of you will recall the hype about "Oceania," a + proposed independent nation to be built on concrete + pontoons, or somesuch. People were encouraged to send in + donations. Apparently the scheme/scam collapsed: + + "It turned out to all be a scam, actually. The key + people involved, Eric Kline and Chuck Geshlieder, + allegedly had a scheme set up where they repeatedly paid + themselves out of all of the proceeds." [anonymous post, + altp.privacy, (reprint of Scott A. Kjar post on + Compuserve), 1994-07-28] + - or was it Eric Klein? + +15.11. Loose Ends + 15.11.1. Selective disclosure of truth + - More euphemestic than "lying." + - Consider how we react when someone asks us about something + we consider overly personal, while a friend or loved one + may routinely ask such questions. + - Is "personal" the real issue? Or is that we understand + truth is a commodity with value, to be given out for + something in return? + - At one extreme, the person who casually and consistently + lies earns a poor reputation--anyone encountering them is + never certain if the truth is being told. At the other + extreme, the "always honest" person essentially gives too + much away, revealing preferences, plans, and ideas without + consideration. + - I'm all for secrets--and lies, when needed. I believe in + selective disclosure of the truth, because the truth + carries value and need not be "given away" to anyone who + asks. + 15.11.2. Crytography allows virtual networks to arrange by + cryptographic collusion certain goals. Beyond just the + standard "cell" system, it allows arrrangements, plans, and + execution. + - collecting money to have someone killed is an example, + albeit a distasteful one