October 31, 1996 -- New Kinds of Money

Transcript of the live chat session that took place Thursday, October 31, 1996.

These sessions are scheduled for noon-1 PM US Eastern Time (GMT -4) every Thursday.

These sessions are hosted by Richard Seltzer. If you would like to receive email reminders of our chat sessions, simply send a blank email message to or go to and sign up there.

For transcripts of other previous sessions and a list of future topics, click here.

For an article on how to make "business chat" work (based on this experience), click here.

Since the chat itself happens at a rapid pace, it's often difficult to note interesting facts in particular URLs as they appear on-line. Here's a place to take a more leisurely look. I've rearranged some of the pieces to try to capture the various threads of discussion (which sometimes get lost in the rush of live chat).

Please send email with your follow-on questions and comments, and suggions for topics we should focus on in future sessions. So long as the volume of email responses is manageable, I'll post the most pertinent ones here for all to see.

Threads (reconstructed after the fact):


Richard Seltzer ( - 12:03pm -- The scheduled chat is on Business on the WWW. If you are here for that discussion, please identify yourself.

Richard Seltzer ( - 12:04pm -- We're here to share experiences about doing business on the Internet -- particularly the World Wide Web. What works? What doesn't work? Why? What are the trends that matter? How can you/should you adapt to the Internet culture and environment?

I work for the Internet Business Group at Digital Equipment in Littleton, MA. In that capacity, I end up talking to people from large companies about how they can use the Web for business. I also have my own personal Web page -- which is content rich and no frills -- which I do for practically nothing and draws a fair amount of traffic and attention.

In a chat session like this things can get pretty frantic. It's sometimes difficult to follow the threads of conversation. And there's no time to write down interesting URLs and facts. So last week, I took a copy of the raw transcript and edited it to make the threads clearer and posted it at my own little Web site so anyone could take a look. You can see it at I plan to do the same today. Barring technical difficulties, I hope to have a transcript up later today. I'll post it at the same site, naming this one /chat16.html

Richard Seltzer ( - 12:06pm -- Today, we'll be discussing "new kinds of money" -- i.e., virtual cash,smart cards, micropayments (Millicent), etc. What they are. What's likely to happen. What are the implications for business on the public Internet and also for intranets. (Also, implications for banks and other financial institutions).

rjones ( - 12:04pm -- Hi, Richard. My name is Russ Jones and I'm involved in Digital Equipment's Millicent micropayment project.

Richard Seltzer ( - 12:05pm -- Welcome, Russ. Glad you could make it.

Jim Dorval ( Vivo Software ( - 12:06pm -- Hello netizens. We (Vivo) are implementing the use of Cybercash for our product sales.

Bob Hettinga ( - 12:16pm -- Hi everyone.. Sorry I'm late. I got here too early and forgot to punch the reload button...

Vip ( - 12:16pm -- Hi, Vipul here. I am interested in electronic payments as applicable to Intranets

Tom Dadakis ( - 12:20pm -- Hi, I'm joining late so I'll follow the thread but I am interested in internal transfers within a company.

Richard Seltzer ( - 12:14pm -- If others have joined us, please speak up and introduce yourselves and let us know your areas of interest, and in particular please let us know if you have direct experience with any of the "new kinds of money" that are coming into use on the Internet.


Eddie ( - 12:08pm -- I have a question about email lists.

Richard Seltzer ( - 12:09pm -- Eddie -- What's the question?

Eddie ( - 12:09pm -- Do Email list-brokers exist?

Richard Seltzer ( - 12:12pm -- Eddie -- Good question. I'm sure that there are companies selling email lists. The real question is whether any companies are doing it right -- in other words did the people on those lists ask to be there and are they going to be angered receiving your email. I just saw an interesting offer from Millenium -- let me know your email address and I'll forward it to you. Apparently they are offering to pay people "digital cash" (on-line coupons redeemable elsewhere on the Internet) for viewing/reading emailed ads.

Richard Seltzer ( - 12:13pm -- Eddie -- You'll note that that coupon model is in fact another "new kind of money" so it in fact relates directly to our main focus for today. We want to explore the new kinds of business models that new kinds of money can open up -- and email lists -- where people express their willingness to receive commercial messages in exchange for "digital money" is certainly a model of that kind.

Eddie ( - 12:14pm -- Thanks Richard. You can reach me at If you want my web site goes by the same address.


Eddie ( - 12:18pm -- Richard--That is a very exciting concept, but I must admit that i am rather uninformed in this area. Is "cybercash" currently accepted on the web?

Richard Seltzer ( - 12:20pm -- Eddie -- Yes. To varying degrees. it's just getting started. Check these references:

Bob Hettinga ( - 12:25pm -- We went into this a bunch last time, but I think that "token" systems, like ecash, or MicroMint, or Millicent, will become the value transaction method of choice once all the bugs work. They're simply cheaper and safer to operate. Fear of cryptography is like fear of aerodynamics. A tethered balloon flies, but you don't go anywhere in a hurry... :-).


Richard Seltzer ( - 12:19pm -- Russ -- I understand that Millicent is in the labs at Digital in Palo Alto and that there have been a number of presentations about it and there are on-line documents about it. Are there any live demos, pilots in the works now (or will there be soon) so people could try it out?

rjones ( - 12:53pm -- Richard -- The Millicent team is gearing up for a public pilot. If anyone is interested in Millicent details, we have a Web server at There is also a distribution list for individuals wanting to stay abreast of the Millicent project. Details are on the Web site.

more detail on Millicent from followup correspondence


Richard Seltzer ( - 12:09pm -- Welcome, Jim. Can you provide us with a thumbnail definition of Cybercash. And tell us how you use it, why you chose it, what's working and what isn't?

Richard Seltzer ( - 12:09pm -- Jim -- Also, do you use Cybercash exclusively or in conjunction with regular on-line credit card payments?

Jim Dorval ( Vivo Software ( - 12:14pm -- Cybercash is an encrypted message based data transaction similar to POS devices currently used for credit card transactions. The transport they use is TCP/IP to a "secure" server with a crypto box. In simple terms it is like transposing the ATM machine model onto the internet.

Richard Seltzer ( - 12:16pm -- Jim -- What's the cost of processing a transaction with Cybercash? What's the smallest size sale that makes sense with it (from your point of view)? And what level of encryption does it use? Is it exportable or limited to the US? And how does the user acquire cybercash to spend?

Jim Dorval ( Vivo Software ( - 12:21pm -- CyberCash provides netizens with a Cyber-wallet which is merely a credit line extended from your credicard or other financial institution. A product ID is associated with the product the merchant is trying to sell. The user is prompted for their ID and password when the ask to purchase the product. The product ID and the user information is encrypted and delivered to the CyberCash server. The server validates the transaction for authenticity and financially and send back an OK if everything works out.

rjones ( - 12:22pm -- Eddie -- CyberCash is a company, not a new form of money. They provide the software needed for an online merchant to accept payment in either standard credit card form (Visa/MC/AMEX) or in dollars via their coin product. As a great example of where CyberCash has been applied, the American Red Cross uses it to accept donations over the Web. Users chose which credit card they want to use and they make the payment using the CyberCash wallet. The CyberCash server that accepts the payment runs at the American Red Cross Web site (which is running on one of Digital's AlphaServers.)

Richard Seltzer ( - 12:24pm -- Jim -- How long have you been using CyberCash? About how much in the way of transactions comes to you that way in a typical month? And what's the cost of a transaction to you? Is it comparable to regular credit card transactions (more or less?)

Jim Dorval ( Vivo Software ( - 12:25pm -- I think Mr. Jones covered the questions you asked, except for the charge rate which is similar to credit cards. Bill Melton the founder of CyberCash, previously founded Verifone. Verifone is a very successful POS terminal company. ( I used to work for a competitor called DataCard.)

Jim Dorval ( Vivo Software ( - 12:29pm -- We currently are in the beta stage for our Web site, but have not seen any problems. I think the greatest barrier is going to be user acceptance. The model is exactly like credit cards which originally took some getting used too. Once they were accepted as "OK" they just exploded.

Richard Seltzer ( - 12:30pm -- Jim -- What size transactions do you use CyberCash for? Is this just an alternative to an ordinary on-line credit card transaction? If so, what are the advantages? Is it just to deal with unfounded concerns about passing credit card info on-line? Does it open up any new business models for you? (I believe that micropayment systems like Millicent do open new business models.)


Bob Hettinga ( - 12:37pm -- I think the problem with credit card transactions on the net is that they're not peer-to-peer enough. The net is a geodesic place, where direct connections to anyone is possible. Checks and cash are peer-to-peer money. When you had a yard sale, or sold a car, or even got paid for a contract, did you take MasterCard?

Richard Seltzer ( - 12:39pm -- Bob -- Sounds great to me. Which of the "new kinds of money" are peer-to-peer in your view? Probably not CybeCash, if I understand you correctly.

rjones ( - 12:40pm -- Bob -- I agree that overtime token-based commerce, actually micropayments are going to become the dominant payment transaction on the Web. For example, with Digital's Millicent system content providers can use it to support mutiple revenue models; 1) per-access fees at the page level down to 1/10th of a cent, 2) subscription based access (but with subscription granularity at a month, week or day), and 3) advertising rebates (where the consumer is paid to view ads). Additionally, Millicent can be deployed behind the firewall on an organizational Intranet to meter access to internal Web servers and other corporate services.

Jim Dorval ( Vivo Software ( - 12:42pm -- Bob, I would have to partially agree with you on the peer-to-peer money issue. I rarely have and substantial amount of cash on hand, and what I have is for reflex purchasing. If I were to buy a car on the internet, I would not expect to download it on the spot as I would in buing gas. But I do agree that there does need to be the peer-to-peer transaction.

Richard Seltzer ( - 12:43pm -- Russ -- I particularly like your last point -- that this technology can also be used to monitor usage of corporate resources like Web pages. As intranet usage explodes that could become quite a significant application.

Richard Seltzer ( - 12:45pm -- Russ -- I've also heard of the idea of "renting" software using a micropayment system like Millicent. In other words, as some folks/companies move toward Network Computers, with software and data residing on the network rather than on your hard disk, micropayments could help you charge for software on a per use basis.

Jim Dorval ( Vivo Software ( - 12:46pm -- A purchase over the internet does not always result in immediate product delivery, and introduces a great opportunity for scam artist. Most people would prefer a credit card type transaction for product with delayed delivery. This way there is recourse to the action in the case of fraud.

Richard Seltzer ( - 12:48pm -- Jim -- That's a good distinction: a credit card-type transaction makes sense for delayed delivery of goods with significant worth. But for on-line delivery and/or delivery of good with relatively insignificant worth, micropayments seems to look very good. But I'd love to see some live pilots of micropayments. Any of that in the works yet, Russ?

Todd ( - 12:47pm -- Richard - I'm a bit skeptic of your example where readers pay for each page accessed. I personally much prefer a flat rate, and would cite the prevalence of flat rate ISPs as evidence that others do as well.

Richard Seltzer ( - 12:51pm -- Todd -- I actually prefer "free" to paying at all. But there are some kinds of content that the producers/writers will never put up for free on the Web. Micropayments provides another option -- a way that information providers can creatively make their content available to a wide audience and get paid directly, rather than indirectly through advertising. I don't think it's the be-all and end-all. But I do see some internet business models that could be built on it.

Bob Hettinga ( - 12:48pm -- Peer-to-peer money involves the buyer, and the seller for the trade to clear. With a check you still need banks to settle. With cash you clear and settle the trade all at once. With credit cards, you need the bank to clear and settle the trade. Clear means swapping book entries, settle means that the money actually changes hands. A credit card trade doesn't settle until you pay the bill, for instance.

Jim Dorval ( Vivo Software ( - 12:49pm -- If you found a product you wanted in an advertisement, and they said to send an envelope with cash in it to them and they will mail you the product, would you do it?

Bob Hettinga ( - 12:54pm -- I made the joke last week that, since ipsec gives us encrypted packets anyway, we might enter the age of micromoney as router food. A router saving enough out of operations to buy a copy of itself. Now *that's* dynamic resource allocation. See Kevin Kelly's "Out of Control" for a good discussion of emergent systems like this...


Richard Seltzer ( - 12:26pm -- Russ and Bob and Jim -- Are there any reasonable estimates of the number of regular users who have cybercash "wallets" or who have/use the other current forms of electronic money? Are we talking hundreds, thousands, hundreds of thousands, millions? Where are we today and what will it take to spread it to large numbers of people?

Bob Hettinga ( - 12:32pm -- I think what it will take to expand the market for e$ is products that you can buy with e$ and nothing else. At least for starters. That doesn't sound so hard, when you can do a point-to-point transaction with anyone, anywhere, without going through a typical industrial distribution chain. At the level, the web is way cheaper than mail-order catalogs and telephones. I also think that, paradoxically, in the digital "token" markets, the players are trying to bite off more than they can chew. To take a leaf from securities underwriting, trustees shouldn't be underwriters and cryptographic protocol developers shouldn't be in the software business...

rjones ( - 12:34pm -- Richard -- Our friends at CyberCash tell us that they have distributed over 700,000 wallets, have about 1000+ inquiries from merchants that want to establish CyberCash "Cash Registers" and, so far, have helped implement about 125+ of those thousand. So the numbers are substantial, but just a fraction of the potential with the size of the Web (users,merchants).

Jim Dorval ( Vivo Software ( - 12:36pm -- The internet is a frightening place for people who are not tech-heads, but when you add "hackers" to the scenario it is even more frightening. Fear of computers kept consumers from buying PC's. Now that PC's are accepted, the next step is to get the internet to the same level. Only after people realize that hackers on the internet are no different than criminals anywhere else in the world will they begin to accept financial transactions over the internet.


JR ( - 12:31pm -- When is online commerce going to get easy? I hate typing my credit card in every time I want to buy something...

Vipul ( - 12:32pm -- JR, maybe if all PC's in the future come equipped with card readers ? you can simply slide yours through then :)

Richard Seltzer ( - 12:35pm -- JR -- perhaps the various forms of on-line money might eliminate the need to repeatedly enter credit card money. You do it once and get "credits" which you then can spend at a variety of sites.

rjones ( - 12:49pm -- JR -- I agree that typing in credit card numbers in clunky. Perhaps you should look at some of the wallets that are appearing in the marketplace. From a credit card point of view, you load your wallet and then just click on which ones you want to use. In micropayments, this clunkiness is taken to the extreme. In Digital's Millicent micropayment system we invision the wallet more as an intelligent assistant than someplace you stick your credit cards. When consumers are spending a penny to by a page or content, a Java applet or a video stream it has to be pretty transparent. After being prompted for about the 100th time, we think consumers will want to tell their wallets to "feel free to spend a penny without asking". Of course, that should be user configurable setting as differrent people will have different comfort levels with the lose change.


Vipul ( - 12:26pm -- btw. is anyone aware of an online bank. they provide online check writing services too besides other banking services.

Richard Seltzer ( - 12:28pm -- Vipul -- I've heard of the bank,but not their check writing service. How does that work? How does it different from bill paying with at-home banking?

Vipul ( - 12:29pm -- Richard, you can use a secure web browser to enter check data online. The bank is then responsible for providing payments to the recipients. It is similar to an online checking servie except its on the web.


Richard Seltzer ( - 12:22pm -- Vipul and Tom Dadakis -- I also am very interested in intranet use of these new kinds of money. In a recent speech I heard that there are 10,000 times as many transactions inside companies as among companies. Also, I had an email message from someone who couldn't join us today and was very interested in intranet applications inside financial services companies. Anyone out there have experience of that kind?

Richard Seltzer ( - 12:41pm -- Vipul and Tom Dadakis -- Back to the intranet issue -- do you know of any concrete examples of uses of "new kinds of money" over intranets? It seems to make such good sense, it's hard to believe that it isn't widespread already. Why should companies pay high per-transaction costs for internal transfers of money? It seems that inside a company low-levels of security/encryption might work very well for interdepartmental transfers, etc. Anybody doing that?


Vip ( - 12:20pm -- Richard. and others. a question Besides encryption issues. what other issues crop up when cybercash based trade takes place internationally ?? for ex. a buyer in china uses the Internet shopping network to order goods and pay using a digital form of money he earned from another internet transaction. how will the govts control this ? what regulations are in place right now ? any pointers ?

Vip -- In spite of the money currently being spent over the Internet, there are still many issues hanging open. For example, taxation is considered a big issue. Tax laws vary on a country to country basis, and within the United States a state-by-state basis and even down to the county level. What makes it worse is that their are different laws by type of "goods". For example, cigarettes vs newspapers vs books.

Richard Seltzer ( - 12:33pm -- Russ -- Law-wise I think there are two major complications with regard to Internet transactions -- 1) where does the transaction take place? 2) first Amendment, freedom of the press and sale of information. Newspaper sales aren't taxed (no sales tax) because of "freedom of the press". Book sales are taxed (does that make sense). When it comes to selling content on the Web, does buying the right to read a Web page for a fraction of a penny fall into the realm of "newspaper" or the realm of "book". And how does one apply a tax to a transaction of less than a penny? (even if both the content provider and the recipient lived in the same state so there wasn't a questions of "where" the transaction takes place).

Vipul ( - 12:35pm -- Richard, how about revenue generated from sponsors/advertisers for a web page ? is that taxable ? if so by who ??

Richard Seltzer ( - 12:38pm -- Vipul -- I'm not a lawyer, but I'd suspect that the advertising takes place at the Web site that posts it, just as a magazine is published from the site from which it is mailed. And hence the laws the that state/country would apply taxation wise. But that's an uneducated guess. I wish Warren Agin from LawSolutions were here. (He's been with us almost every other chat session we've held.) You might want to check his email address from one of the transcripts and write to him on that.

Vipul ( - 12:40pm -- Thanks Richard. I have been investigating this for a while.


Richard Seltzer ( - 12:07pm Russ -- I've seen some stories in the press related to export controls getting in the way of Internet payment systems. In particular, I understand that there are barriers to exporting WebTv because of the encryption software it embodies for on-line payments. Is that true for all the strange new kinds of "money" on the Internet? Or do the micropayments solutions get around it?

rjones ( - 12:16pm -- Richard -- Many types of Internet payment technology use encryption. Depending on what type of encryption algorithm is used and whether it is implemented in an application-specific or bulk way, there may be export issues. For example, CyberCash uses very strong public key cryptography, but doesn't do it in a "bulk" way. By only focusing on the encryption of credit cards, they have obtained export waivers to ship the same strongly encrypted product worldwide. In micropayments, because the transaction values are so small, public key cryptography is overkill. Millicent uses simple hash functions to guarantee payment transaction integrity. So no, there is no export issue.

Richard Seltzer ( - 12:18pm -- Welcome Bob -- Could you help explain the relationship of cryptography-related export controls to the various kinds of "new money" on the Internet? What flavors of on-line payment run into export control barriers and what ones don't and why?

Bob Hettinga ( - 12:22pm -- I like to say that digital commerce *is* financial cryptography. The "token" systems like ecash, or MicroMint, or, even Millicent (however much they deny it) are all cryptographic at their core. The book entry systems like cybercash all use link-level cryptographic protocols to ensure authentication and privacy.


Bob Hettinga ( - 12:43pm -- On lists where we talk about this stuff, we use the term "regulatory arbitrage". Multinational corporations call it jurisdiction shopping. With the net, anyone can jurisdiction shop. We're doing the world's first conference on financial cryptography, and we're collecting the money on a server in Anguilla, a taxless island in the Carribbean. We're also holding the conference there. In February. ;-). Actually the feds are pretty wise to this. Besides the post-Marcos Phillippines, the USA is the only country in the world where all your income is taxable, no matter where you make it.

Richard Seltzer ( - 12:47pm -- Bob -- I recently received your announcement about that upcoming conference. I'll post it with the transcript for this session at later today. Also, you mention mailing lists that discuss these issues. Could you please let us know the names/addresses of those lists? If you don't know them off the top of your head, please send them to me by email and I'll add those to the transcript too.

Bob Hettinga ( - 12:52pm -- The e-mail lists are places like e$, or cypherpunks, or dcsb, or set-talk, or ecash. I'll send you the list subscription instructions. On the other hand, you can subscribe to e$pam, which is a filtered feed of traffic from those lists that I run. See for details...

Richard Seltzer ( - 12:53pm -- Bob -- Thanks for the info. Please do send the details so I can post them.

Bob Hettinga ( - 12:57pm -- If you're interested in Financial Cryptography 1997, which is the conference we're having in February in Anguilla, check out . Thanks everyone! It was fun...


Richard Seltzer ( - 12:53pm -- All -- From my perspective, this is just getting interesting and time is running out. Can I get a quick vote from the audience -- is this topic one we should visit yet again next week? If so, are there people/companies you would like me to contact and request that they join us? If not, please send me your suggestions for other topics.

rjones ( - 12:55pm -- Jim -- A quick question before you go. You describe using CyberCash to take payments for Vivo's software (which is very cool, btw) online. Any thought to using a micropayment system to sell video steams online?

Jim Dorval ( Vivo Software ( - 12:56pm -- Thanks Mr. Jones. I will visit your site. We may be able to recommened your product to some of our customers.

Jim Dorval ( Vivo Software ( - 12:57pm -- Richard, thanks for hosting an interesting topic.

Richard Seltzer ( - 12:58pm -- All -- before you go, please post here your email addresses and URLs so we can keep in touch and follow up.

rjones ( - 12:59pm -- Russ Jones,,

Jim Dorval ( Vivo Software ( - 12:59pm -- Vivo Software, Inc. Streaming Multimedia over the inter/intra-net

Bob Hettinga ( - 1:00pm -- Mine' . The e$ home page is . FC97 in Anguilla is ...

Richard Seltzer ( - 12:59pm -- All -- Please send me email with your preferences for a focus for next week. Should we continue this one more time? Also please email me your followup thoughts for posting with the transcript at

Richard Seltzer ( - 1:00pm -- Thanks to all for your participation. If any of you want to be added to an email reminder list for these sessions (every Thursday), please send me email.


New Kinds of Money

From: Tom Dadakis <> Date: Sun, 3 Nov 1996 03:05:21 -0800

The last couple of topics, WebTV & cyber money have been out side of my experiences so I was more a lurker than a participant. However I do think these are valid topics for discussion for doing business on the web and from what I read in the transcripts certainly active discussion points. I'm not sure where cyber money is going to go and I always believed that if someone could come up with a secure way of transfering funds and take a tenth of a cent (millicent) they would make Gates look like a piker. I think the mechanics have been achieved now we have to work on peoples perceptions, real or imagined. You can bring a horse to the bucket of water but you can't stick his head in it. But that gets into the whole discussion of benefits and incentives for doing transactions online and what would make a consumer want to do a transaction online. What's in it for them. That could be a whole discussion.

What intrigued me was your comment about business to business transactions. The reason I concentrate on consulting to business is that more of them have computers than consumers and the incremental cost of getting online for a business is minimal because they already have computers and are usually already networked so that connecting to the internet is just extending their reach.

My current assignment is developing the Corporate Intranet for a CT corp in their Corporate Finance dept for their Capital division. They have several interesting initiatives for pursuing business to business interaction on the internet but it is not happening yet. In other words, other businesses are not jumping on the net to conduct business yet even though the mechanics and infrastructure are being put in place to support it.

So I come back to my question from last week. What to do businesses expect to get out of conducting business online, what is the benefit for a company to do business on the net. I can list how efficient, how broad the reach, how open, how fast. But there must be something else which I am not seeing, which is holding businesses back from jumping on to the net to conduct their transactions or is it just that we have not yet reached a critical mass for conducting business on the net.

For example, we have far surpased the critical mass needed for finding information on the net. In fact now we need filters to rate the value (relevancy) of the information we retrive. How do we reach the same critical mass for conducting business to business transactions on the net. As an example, I have been looking for a new laptop & I know exactly the specs I am looking for. The few websites I have looked at did not give me as much info as some print magazines. So is the problem that we have not yet developed the right methods for marketing business to business on the net or are we trying to use other medium's methods which don't work on the net.

I'm not sure I'm making my point clear but other than tech support and informational transactions; I don't see business to business transactions on the net yet and my question is what do the business customers expect to get out buying online from other businesses. One place to start is to ask how many have used Fedex or UPS's website for ordering a pickup (some of us do not have regular pickups). Of course, I then would ask why didn't they just take the same information which is printed on dead trees in the envelope and send it by email or ftp.

Richard, the reason I like your discussion group is it gives me a chance to hear what some of those on the frontlines of this revolution are thinking or doing.

Tom Dadakis 203-622-4717 DadaCom Internet Consulting Services

Intranets in banks

From: WorkingAndStudying <> Date: Tue, 29 Oct 1996 21:04:28 -0500 (EST)

I'm working on a paper about Intranets and mission critical issues regarding building and maintaining Intranets in banks. I would like to join your discussion on Thursday and would like a reminder. Also, if you have already discussed this topic, could you point me to the appropriate archives?


Please do join us this Thursday. The main topic will be "new kinds of > money" and their implications for Internet business. But there are intranet applications for on-line money as well (internal transactions in large corporations) and the impact on banks is likely to be major, and in any case we always welcome any questions related to business on the Internet.

You can find the transcripts at


I heard about your chat at the "First! Intranet" web site at URL:

I will research your archives for my paper.

...but I just found out I will be in a meeting tomorrow all day!

Is it possible for you to raise the question regarding mission critical issues regarding building and maintaining Intranets in the financial arena? I know you probably get lots of requests like this and I will respect your decision not to if it goes against the chat room policy. On the other hand, if you do decide to, thanks so very much in advance!

Tuwenia Barnes GMU MBA '97 

Future Topics

From: Richard Seltzer <> Date: Tue, 5 Nov 1996 11:35:47 -0501 (EST)

I believe that there are still some more issues related to "new kinds of money" that merit discussion. In particular, as Tom Dadakis pointed out in a followup email message -- "I think the mechanics have been achieved and now we have to work on people's perceptions, real or imagined. You can bring a horse to the bucket of water but you can't stick his head in it. But that gets into the whole discussion of benefits and incentives for doing transactions online and what would make a consumer want to do a transaction online. What's in it for them? That could be a whole discussion."

I'd like to deal with the question of "bootstrapping" the use of "new kinds of money" both on the Internet and also in intranets. It's easy to see the benefits of low-cost online transactions/micropayments once large numbers of vendors and buyers are set up and familiar with it. But how do you get from here to there? What have people tried? What makes sense to try?

If that doesn't stimulate discussion or the right mix of people aren't connected, as an alternative, I would like to talk about the impact of search engines on Web page/Web site design. In other words, how you can use search engines like AltaVista to find fixable problems at your site, how you can design your pages to maximize the likelihood that people who want to find a site like yours will find you; and maybe use and abuse of metatags. My book on The AltaVista Search Revolution was just published by McGraw-Hill, and these kinds of things are on my mind right now. Is that something you'd be interested in?

Other topics I'm considering for future weeks include:

Please let me know what matters most to you so we can make these sessions as effective as possible.

Richard Seltzer

Future Topics

From: Nancy Enright <> Date: 5 Nov 96 13:49:41 EDT

> But how do you get from here to there? What have people tried? What makes sense to try?

Sounds interesting.

>how you can design your pages to maximize the likelihood that people who want to find a site like yours will find you;

I would like to know the answer to this one!

Nancy Enright nenright@idea.com

Wireless Internet -- Future Topic

From: "Alan A. Reiter" <> Date: Tue, 05 Nov 1996 18:41:53 -0500

As editor of a wireless Internet newsletter, I would be glad to participate and add my two cents to any discussions on the integration of the Internet with paging, PCS, cellular, spread spectrum, etc. Information about the subject is on my Web site.

Alan A. Reiter, Editor, "Wireless Internet & Mobile Computing" E-Mail: Web site:

Future Intranet Topics

From: Vipul <> Date: Tue, 05 Nov 1996 21:12:02 -0400

Heres a topic I am interested in.

Use of robots,spiders etc on intranets.

How can these very powerful applications be applied to intranets and what changes have to be made to do so. What kind of applicaitions would a robot have on an intranet.


Feedback from Australia

From: James Cameron <> Date: Wed, 6 Nov 1996 08:31:07 +1100

> If that doesn't stimulate discussion or the right mix of people aren't connected, as an alternative, I would like to talk about the impact of search engines on Web page/Web site design.

I can't attend the chat, as it's my time for sleep ... ;-)

But I'd like to make one point on this subject:

When I design web sites now, I try very hard to fit to the one-page-per-object style, so that the site can be indexed properly by a robot. I try to stay away from query interfaces that are carried over from older systems. I've seen a few form based query systems on the web that are clearly a carry-over, and they are difficult to use because they don't fit the web's modality.

James Cameron ( Digital Equipment Corporation (Australia) Pty. Ltd. A.C.N. 000 446 800

Message from Hong Kong -- Interested in "New Kinds of Money"

From: Quentin Staes <quentin@iMAGIC.COM.HK> Date: Thu, 7 Nov 1996 12:06:04 +0800

My Name is Quentin Staes and I am living in Hong Kong. Coming from the music business and in particular the music publishing and copyright, I just changed job. I am now responsible for business development in the multimedia branch of a large local telecom group. Although I have an enigineer training and an MBA I am not a techie like most guys on your forum are, so please excuse me if my questions are a bit unclear.

One of the aspect of our business is intranet development and your transcripts of past forums have been one of the most valuable source of info for the beginner I am. We are also looking at e$ for our business here. Bringing E-transaction to the public in the street (through kiosks and other non-personal/private client access) or in other public areas through web technology is one of our option. The question I would like to raise (as you can guess I am not sure I will be able to attend your forum 'Live' at 1AM) is related to small transactions. In most cases the cost of clearing e-transaction does not allow the use of credit cards or bank cards for small amounts. On the other end the use of coins si too costly in terms of maintainance and collection. What do you and the forum think about Mondex, visa cash and other cash cards? Would system as Digital Milicent be adaptable for Mr. Streetguy-Dontknowaboutcomputer and street use? What other strategy could you think about?

Thank you for your great site.

Quentin Staes, iMagic Infomedia Technology Ltd., 37/F Manulife Tower, 169 Electirc Road HK, Voice: (852) 2806 6620, Fax: (852) 2887 2950,


From: Russ Jones,, Sent: Friday, November 08, 1996

To: Quentin Staes

Millicent is designed to meter access to files (such as audio clips) for small amounts of money. In US Dollars, Millicent can cost-effectively handle transactions as small as 1/10th of a penny. We expect the average transaction to be about 1 penny. The system can scale up to comfortably support transactions in the $1.00 range. Millicent is a software-based scheme for uses surfing the Web. It might be a stretch to implement in a kiosk environment, as their is overhead and cost associated with getting the Millicent wallet and configuring it for use, loading it with money, etc. However, it could be an excellent alternative for home users.

You can visit our Web site to learn about Millicent at:

Attached is background document that describes Millicent's key attributes and how Digital envisions Millicent's deployment on the World Wide Web.

I'll add you to our distribution list to keep you apprised of Millicent developments.

Russ Jones, Internet Business Group, Digital Equipment Corporation

Digital's Millicent Micropayment System

Millicent (patent pending) is a lightweight and secure protocol for electronic commerce over the Internet. The Millicent micropayment system implements the Millicent protocol. As a microcommerce system, Millicent is designed to support buying and selling content over the World Wide Web for fractions of a cent.

Millicent is best thought of as a pay-ahead, coupon system. It is based on decentralized validation of electronic coupons at the content provider's Web server without any additional communication, expensive encryption, or off-line processing. Millicent is optimized for transparent, high-performance transactions between the user's Web browser and the content provider's Web server. In the Millicent scheme, the content provider is also referred to as the vendor.

The key innovations of Millicent are its use of brokers and of scrip:

Millicent is: The name Millicent is derived from the underlying cost associated with each micropayment transaction.

Integrating Millicent into the World Wide Web

Millicent requires three software components -- a user wallet, vendor server, and broker server. All three components utilize the Millicent protocol. The Millicent protocol is implemented as an extension to the HTTP protocol. It does not interfere with normal HTTP transaction processing nor the standard Web browser / server interaction. As an HTTP extension, it flows transparently through any standard public domain or commercial proxy server. In this sense, Millicent is firewall-ready and will smoothly interoperate both inside and outside the enterprise.

Digital has completed a low-functionality implementation of all three of these Millicent software components to test the protocol interaction. This initial implementation will also serve as a reference implementation for interoperability with production quality software.

Millicent Software Components

1. The Millicent Wallet

The Millicent Wallet is client-side software that cooperates with the users Web browser to handle Millicent transactions on behalf of the user. The Millicent Wallet can be a client-side helper application that functions as a proxy between Millicent-enabled Web servers and the user's Web browser. This is how our reference implementation is done. Production software could alternatively be implemented as a plug-in or integrated directly into the Web browser.

2. The Millicent Vendor Server

The Millicent Vendor Server is server-side software that cooperates with the vendor's Web server to validate and admit purchase requests. In our reference implementation, the initial Millicent Vendor Server is implemented as a gateway that intercepts page requests headed for the vendor's real web server, handles the payment processing, and forwards the request on to a standard Web server. Vendors can control the price of pages on a server-wide basis, a directory-to-directory basis and a per-page basis. Functionally, the Millicent Vendor Software validates micropayments to test for double-spending, tampering, theft and adequacy of payment. This validation is done with no additional round-trip interaction to the user or to a Millicent broker.

3. The Millicent Broker Software

The Millicent Broker Software is server-side software that deals with converting real money into scrip and converting between different forms of broker and vendor scrip. How the customer purchases scrip in bulk is broker specific. Some brokers may choose existing "macro" payment mechanisms, such as the CyberCash Wallet, for the bulk purchase of scrip against credit cards. Brokers such as ISPs and online service providers will choose to bill the customer as part of the normal a monthly account settlement. The Millicent Broker Software is conceptually similar to the Millicent Vendor Software. It differs in that it sells broker scrip instead of Web pages.

The Millicent design does not utilize heavy-weight public key cryptography, instead it makes extensive use of light-weight hash and digest functions to guarantee the overall system integrity. This also removes the typical U.S. domestic software export issues usually associated with Internet payment technology.

Digital is also working as part of the Joint Electronic Payment Initiative (JEPI) to assure that Millicent is an accepted electronic payment mechanism within the industry. JEPI is sponsored by the World Wide Web Consortium and CommerceNet. The goal of JEPI is to provide the consumer easy payment system selection. JEPI is developing common software standards for Web browsers/server payment negotiation.

Chat Session Helps Win Business in Singapore

From: Harold Messias <> Date: Tue, 5 Nov 1996 14:07:00 -0500

Unfortunately, I will not be able to make the session this week because I have customers visiting me. All part of making a living on the Web. I would like to tell you about this business deal and how I put it together. The customers are coming from Singapore. See!! It really works.




Where can I ourchase a copy of your book?


Was that chat participant from Singapore any help?

> Where can I purchase a copy of your book?

I believe they have it at Quantum Books in Cambridge ( You can also order from or directly from Osborne/McGraw-Hill -- look under New).

It will soon be referenced from and orderable from the AltaVista site

And it will also soon be arriving at other book stores.

Chapter 5 (on designing pages and sites with search engines in mind) is probably the most useful part.

Good luck with those customers on Thursday.


From: Harold Messias <> Date: Wed, 6 Nov 1996 11:07:53 -0500

Well, indirectly your chat session made my sale possible. It was not the contact from Singapore, as such. But rather, it was the reality of having easy communication with remote prospects (e.g., Singapore) that inspired me to go for the close. And it worked. I am in the process of expanding this remote high technology consulting business and your chat sessions are very helpful to me.

Thanks again,


Previous transcripts and schedule of upcoming chats --

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