Ed Gerck wrote: >1. If there is no limit, then the well-known doubling >strategy would allow the user to, eventually, make the >bank lose -- the user getting a net profit.
I think you misunderstand the nature of the martingale strategy. It's not a good way to win in Las Vegas, and it's not a good way to win here, either. Anyway, even if it were a problem, there would be lots of ways to prevent this strategy in a digital cash system. >2. If there is no prepaid amount, lucky users could quit >"while ahead" -- which would hurt the bank since those >users would be out of the pool to be charged, but they >have used the service. No problem. This is expected to be roughly counterbalanced by the number of unlucky users who quite "while behind". >Another question, which answer I guess is more >market-related than crypto-related, is whether banks >will accept the liability of a losing streak ...for them. >[...] The problem here >is that, all things being fair, the system depends on >unlimited time to average things out. No, it doesn't. It doesn't take unlimited time for lottery-based payment schemes to average out; finite time suffices to get the schemes to average out to within any desired error ratio. The expected risk-to-revenue ratio goes down like 1/sqrt(N), where N is the number of transactions. Consequently, it's easy for banks to ensure that the system will adequately protect their interests. And everything is eminently predictable. Suppose the banks expect to do a 10^8 transactions, each worth $0.01. Then their expected intake is $1 million, plus or minus maybe $1000 or so (the latter depends slightly on the exact parameter choices). Any rational bank ought to be willing to absorb a few thousand in plus or minus, at this level of business. In short: I think your list of "problems" in the approach are not actually problematic in practice. --------------------------------------------------------------------- The Cryptography Mailing List Unsubscribe by sending "unsubscribe cryptography" to [EMAIL PROTECTED]
