an excerpt from the article

"E-Money (That's What I Want)"

reprinted from "WIRED" Magazine, December 1994 issue

[emphasis has been added to the original text]

... Yet it is not at all clear that even this sort of limited anonymity will gain, er, currency. Users of electronic cash - the general public - will probably never be polled on whether they prefer it to be anonymous. Brickell admits that anonymity will be a hard sell. " There's going to be so much information about individuals floating around, that we want to protect privacy as much as we can," he says. " But some of the bankers feel that an anonymous system is never going to make it, or even be something that they can get behind." In fact, says Niels Ferguson, a cryptographer who works for DigiCash, "the people who decide actually often have an interest in not protecting people's privacy because they are among the potential benefactors of gathering the information."

But what of the Nathan Myhvolds, who seem to argue that they want traceability? Ferguson sighs. "Oh, the number of times I've had to argue with people that they need privacy! They'll say, 'I don't care if you know where I spend my money.' I usually tell them, 'What if I hire a private investigator to follow you around all day? Would you get mad?' And the answer always is, 'Yes, of course I would get mad.' And then my argument is, 'If we have no privacy in our transaction systems, I can see every payment - every cup of coffee you drink, every Mars bar you get, every glass of Coke you drink, every door you open, every telephone call - you make. If I can see those, I don't need a private investigator. I can just sit behind my terminal and follow you around all day.' And then people start to realize that, yes, privacy is in fact something important. Any one part of the information is probably unimportant. But the collection of the information, that is important. "

Which is exactly why certain officials are licking their chops at the prospect of traceable cash. These include, of course, law-enforcement agencies, who are more than eager to see hard cash phased out. What would the drug dealers do? The money launderers? The underground economy? They will argue that granting anonymity to digital cash would provide a bonanza for kidnappers, muggers ... criminals of every stripe. But consider a world where all money is electronic and traceable, and you have the most potent crime-fighting weapon in history.

The institution with the most to gain is the Internal Revenue Service. The computer age has been very good to the IRS, which now has access to any number of databases that yield reality checks on any given citizen's tax returns. Traceable cash would accelerate this process, and the tax-collection agency can't wait to take advantage of it. In a recent speech - presented on April 15, no less! - Coleta Brueck, the project manager for the IRS's Document Processing System, described some of the IRS's plans. These include the so-called "Golden Eagle" return, in which the government automatically gathers all relevant aspects of a person's finances, sorts them into appropriate categories and then tallies the tax due. "One-stop service,"; as Brueck puts it. This information would be fed to other government agencies, as well as states and municipalities, which would draw upon it for their own purposes. She vows "absolutely" that this will happen, assuming that Americans will be grateful to be relieved of the burden of filing any taxes. The government will simply take its due.

"If I know what you've made during the year, if I know what your withholding is, if I know what your spending pattern is, I should be able to generate for you a tax return," she says. "I am an excellent advocate of return-free filing. We know everything about you that we need to know. Your employer tells us everything about you that we need to know. Your activity records on your credit cards tell us everything about you that we need to know. Through interface with Social Security, with the DMV, with your banking institutions, we really have a lot of information, so why ... at the end of the year or on April 15, do we ask the Post Office to encumber itself with massive numbers of people out there, with picking up pieces of paper that you are required to file? ... I don't know why. We could literally file a return for you. This is the future we'd like to go to." ...

Back