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List:       cryptography
Subject:    [Cryptography] The threat of privacy
From:       Bob Hettinga <hettinga () gmail ! com>
Date:       2020-08-03 14:38:22
Message-ID: 03C058C8-6EBC-444E-B6DF-999600D91498 () gmail ! com
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http://www.kahnfrance.com/cmk/The%20threat%20of%20privacy%20distribution%20version.pdf



The Threat of Privacy 
By Charles M. Kahn1

Like artists, we academics want to believe that if one of our works doesn't get \
enough attention it's because we're ahead of our time. I'd like to pretend that \
everything I've written is pathbreaking, and will eventually be recognized for its \
true importance. But I have to admit that there are really only a couple of cases \
where I can say with hindsight that something I wrote has been ahead of its time.

One of them2 is a paper written with Jamie McAndrews and Will Roberds, published in \
2005, and titled "Money is Privacy." We wrote it partly as a response to Narayana \
Kocherlakota's famous paper "Money is Memory," which could be taken as arguing that \
cash is essentially a record-keeping device, tracking who was a net creditor and who \
a net debtor to society with respect to resources provided or consumed. The \
implication was that if it became easy to keep credit records directly, cash could \
wither away. In our paper we argued instead that a key role of cash was its ability \
to protect the purchaser's identity. So we predicted that, even while the reductions \
in costs of record keeping and increases in the speed of data transmission were \
expanding the usage of credit- and deposit-account- based payments arrangements, cash \
would survive. Because the desire for privacy would always generate demand for cash, \
it would be a mistake—and ultimately futile—to attempt to abolish it. At the \
time, people were attuned to many of the problems of privacy, but there had not yet \
been a clear recognized link between the value of privacy and the role of payments \
systems. (Remember, bitcoin was only released in 2009).

[...]


1 Keynote address at "Financial Market Infrastructure Conference II: New Thinking in \
a New Era" at De Nederlandsche Bank, Amsterdam, 7-8 June 2017. 2 The other was my \
dissertation, back in 1980. It was on liquidity and the pricing of illiquid assets. \
At that time, no one thought this was an important issue in finance: financial \
markets were liquid; everybody "knew" that. So the work went nowhere. Oh well. \
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