Subject: [Asrg] ziff-davis editorial on sender-pays

From: david nicol <[email-masked]>
Date: 01 Oct 2003 00:17:37 -0500

Security Supersite Editor Larry Seltzer argues
against sender-pays as intractably complex:

http://www.eweek.com/article2/0,4149,1272889,00.asp

-- 
david nicol / get a spamless forwarding address at http://www.pay2send.com

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From: Yakov Shafranovich <[email-masked]>
Date: Wed, 01 Oct 2003 02:13:46 -0400

> http://www.eweek.com/article2/0,4149,1272889,00.asp

NOTE: I changed the subject as per the posting guidelines

To summarize the article, the following problems apply to sender-pays:

1. The Internet is global - "So implementing Sender Pays would require 
an international treaty".
2. "Micropayments remain a problem."
3. "Payment systems would have to be set up so that innocent parties 
wouldn't be stuck covering the cost of other persons' e-mails. Probably 
everyone would have to pay some amount in advance to cover the mail we 
might send."
4. "by adding a cost to a message, Sender Pays would certainly impact 
the free e-mail business. Such services would have to decide whether to 
pass the costs along or pick up the tab."
5. "Here's another interesting problem: allegations have been made that 
there are Internet worms and other attacks that create an open proxy for 
spammers on an infected system" - "While this particular form of 
hijacking is built on old-fashioned SMTP, it would still suggest that 
Sender Pays will require that we first solve the open proxy problem—yet 
another difficult issue."

Perhaps someone here wants to address them?

---

From: Phil Miller <[email-masked]>
Date: Wed, 01 Oct 2003 16:47:02 -0400

> an international treaty".

No, it only requires a multinational money-transfer agency, or a group 
of such that can collectively manage this. Like Western Union, or the 
global banking system, which seems to handle wire transfers just fine 
worldwide.

> 2. "Micropayments remain a problem."

As their volume increases, their individual overhead will go down, due 
to economies of scale. It may not be economical for a bank to allow the 
transfer of 5 cents, or 1 cent, or a fraction thereof today, but it is 
becoming cheaper at a steady pace. Again, not an insurmountable problem.

> another difficult issue."

3 seems almost nonsensical. Is the author worried about hijacked 
accounts? This is already a problem in the world in the form of identity 
theft, and it costs more than and does more damage than sending a few 
million emails. And the systems to detect this used in the real world 
are even easier to apply to email, because there must be some central 
point from which the charge is drawn, and unlike credit charges, which 
can be delyed, email, especially bulk email, is sent as a large lump, 
and is thus easily detectable by whatever credit agent (bank, ISP, w/e) 
handles the charges.
5 deals with a non-issue in secure client systems. The malacious agent 
would be unable to authenticate itself as the owner or a user of the 
system it resides on, and thus messages it sends would be rejected.

Another approach to solving the hijacking problem would be to hold users 
liable for any messages sent that authenticate successfully as being 
sent by them. This provides an economic incentive to secure one's 
system, and could also lead to an insurance system for large entities 
(think multi-billion dollar corporations) that would pool this risk and 
provide a similar incentive to keep one's premium down.

> pass the costs along or pick up the tab."

Odds are that the elimination of spam will save them much more than this 
will cost them. And if it doesn't, they will be forced to adapt or die.
At any rate, a person could certainly consent to receive mail that does 
not have a payment enclosed, if they wish to correspond with another 
person who is unable to pay for email transmission.

Philip Miller

---

From: "Eric S. Johansson" <[email-masked]>
Date: Wed, 01 Oct 2003 17:28:08 -0400

I apologize for disappearing on this topic for well but I have been in Web 
framework hell.  I will probably only pay attention for a short while before I 
go back to Sisyphian labors.
---eric

> To summarize the article, the following problems apply to sender-pays:

more specifically, money based sender-pays.  None of these issues exist with 
proof of work stamp based sender-pays.

> an international treaty".

Postage in this case becomes an end to end protocol and not a cost of entry to a 
controlled access monopoly delivery service.  All it would require it is private 
agreements for various issuers to settle accounts.  If anything, there would be 
a strong need for government intervention to prevent monopolization of postage 
issuance as has almost happened in the certificate market.

> 2. "Micropayments remain a problem."

quite true but since this is a closed domain not an issue..  Generating a coin 
is no problem.  It is purchased from and cleared from the same source.  also can 
be dealt with by settlement agreements between two issuers.

> everyone would have to pay some amount in advance to cover the mail we 

think bearer instruments.  Mail will not be accepted without a valid coin.  No 
need for book entry.

> pass the costs along or pick up the tab."

not necessarily.  using a bearer instrument, the service is not an originator of 
the postage but merely passes it along.   One could also have an account of 
postage coins with the e-mail service so one could send e-mail while they are on 
the road and no longer have access to their stamp pad.

> another difficult issue."

proxy relaying will have no impact on sender pays systems.  They still have to 
have a stamp of some form in order to be delivered.  The real problem is a worm 
that gets into your system and takes over your e-mail client and sends lots of 
mail to mailboxes in Nigeria.  If you compromise 300,000 hosts (like they did 
last time), it only takes $3.50 per machine to give you $1 million.  ka-ching!
Now Chairman Bill really can get a dime every time one of his machines are 
compromised...

things he didn't consider:

cost of infrastructure.  And who pays.

invariably the cost of infrastructure is very high because it must be designed 
for peak loads.  Additionally, the double spending database must record every 
single issued coin and its state for a given epoch.  This is not a small database.

The issuer pays for their infrastructure out of fees tacked onto the issuance of 
stamps.  One could make this model more sender pays if the fees were tacked onto 
the redemption of stamps.  But in the end, somebody pays and pays a lot.

latency of double spending database

spammers will double spend.  It's important to keep the latency of the double 
spending database to a minimum which means stamp redemption as soon as the mail 
is received and subsecond update times from stamp redemption to entry in double 
spending database.  That way the window of opportunity for a double spent stamp 
becomes very small.  The acceptable size of this window is a function of how 
many double spend checks per second one can make of the database.

how to cope with inaccessibility of double spending database.

since then that is not perfectly reliable, invariably the double spend database 
will be unavailable at times.  The decision is then whether to hold mail or pass 
mail.  Both are problematic in different ways.  Additionally, if there are 
multiple network caches of the double spent database providing service to a 
greater portion of the net.  If they lose connectivity to the double spent 
database, they should go silent and not give potentially false answers.

issuer noncooperation

some folks might see it as a competitive advantage to have a private currency. 
They may perceive it as a "lock in" and if they can just get a monopoly, they 
will be set for life.

What's more likely is that there will be a large number of issuers some of which 
will settle with others and some of which won't.  As a result, people probably 
have dozens of little accounts where postage accumulates.  This will trigger a 
market in software to purchase postage from all these different accounts if 
there is a sufficient positive balance in any of them thereby solving the 
settlement problem with external tools.

many issuers will go bankrupt.

if anything, this will trigger the most discussion of government regulation and 
a significant loss in confidence in a sender pays by money world.  Underfunded 
issuers will regularly go bankrupt causing individual losses on the order of 10 
or $15 per person.  if this happens once or twice to a person.  It won't be a 
big deal and will push them towards big bank backed issuers.  We will see a 
similar cycling of fees up and down as we have seen in the personal banking arena.

But the threat of people losing money will be the biggest kick in the pants to 
government regulators to try and "protect people's interests".  It probably 
won't go far if the banking industry steps in and office to provide a stable and 
safe environment.  If anything, you'll see regulation at that point to reduce 
competition and freeze out the independents.

the loss of confidence is a more serious problem especially during the 
transitional phase if people get stamps issued by a defunct bank that has been 
taken over by a spammer.

international regulations

or more to the point, transit fees to governments or private parties imposed by 
international regulations.  folks may look at all that money flowing around the 
net and decide that they want to piece of the action for no other reason than 
the traffic is transiting the network.

Money is so much fun...

---eric

[1] this is a SWAG number.  It's a gut feel based on how long you will let a 
double spending event persist and allow Spam to traverse filters.

---

From: david nicol <[email-masked]>
Date: 01 Oct 2003 16:56:05 -0500

Here's what I sent the author:

Hello, I am pleased to see an article listing arguments
against sender-pays systems.

Thanks!

Here are some hopefully cogent answers to your objections:

1: I do not consider it a problem when my e-mail receiving
server in Kansas City refuses
to accept messages from strangers in Belarus who don't know
me well enough to include a "magic phrase" with their
introductory note. 

2: Micropayments are only a problem due to fear, uncertainty,
doubt and greed on the part of established payment system players.
The tipjar.com micropayment infrastructure has been happily
processing payments of single pennies since 1996.  No, it hasn't
made any money, but if it ever reaches its break-even point it
will.

3: You seem to think that a sender-pays system would have
to be a mandated top-down system that would replace all
current systems in a momentous, sparky revolution.  The
pay2send infrastructure plays nicely with current e-mail
protocols, blocking postage-due messages with language
that current e-mail systems understand.  When a service
provider joins the pay2send sender-pays infrastructure,
that service provider's customers can then have their
micropayment bill included with their regular monthly
bill, much the way that a long distance bill is included
with the monthly bill for a telephone land-line.

Thank you very much again for the thoughtful article.  Would
you accept a position on the pay2send technical advisory board?

David Nicol

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From: Yakov Shafranovich <[email-masked]>
Date: Thu, 02 Oct 2003 00:09:44 -0400

Would someone present like to put together a short document evaluating 
the concept based on the discussion in the last few days? Checking the 
archives might bring out additional nuggets. Keep in mind the req. and 
tech considerations docs.

Yakov

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From: david nicol <[email-masked]>
Date: 05 Oct 2003 17:54:10 -0500

On Wed, 2003-10-01 at 16:28, Eric S. Johansson wrote:
a series of well-though out criticisms.

>   None of these issues exist with 

Yes, but how does the recipient collect?  Where do I trade
my hashcash in for cash and/or valuable prizes?

> They may perceive it as a "lock in" and if they can just get a monopoly, they 

I certainly hope so! :)

> will settle with others and some of which won't.

You have hit the nail on the head regarding my issues with attached
stamps. 

pay2send insists on prepayment by bulk mailers, and is therefore
concerned with easily authenticating identities of bulk-mailers to
avoid theft from their prepaid pay-to-spam accounts.

-- 
david nicol

---

From: Art Pollard <[email-masked]>
Date: Mon, 06 Oct 2003 15:01:33 -0600

>my hashcash in for cash and/or valuable prizes?

Personally, I like the idea of having it such that instead of the recipient 
getting the money (which could be prone for abuse), the money instead would 
go to a charity of their choice.  Who knows what might come from that -- 
perhaps a medical cure for some nasty disease.

Of course, if somebody got nixed on a sender pays scheme then they should 
be notified.  (I am assuming here that we are talking about a system where 
it is generally free but the recipient may charge if they deem the email to 
be spam.)

-Art
-- 
Art Pollard
http://www.lextek.com/
Suppliers of High Performance Text Retrieval Engines.