Cypherpunks, e-money and the technologies of disconnection - encryption technology; includes related articles; excerpt from book, 'Out of Control'

Whole Earth Review, Summer, 1993 by Kevin Kelly

Edison pushed a flat fee for electricity -- a fixed amount if you are connected, nothing if you aren't -- because he felt that the costs of accounting for differential usage would exceed the cost of the variances in electricity usage. But mostly Edison was stymied about how to meter electricity. For the first six months of his General Electric Lighting Company in New York City, customers paid a flat fee. To Edison's chagrin, that didn't work out economically. Edison was forced to come up with a stopgap solution. His remedy, an electrolytic meter, was erratic and impractical. It froze in winter, sometimes it ran backwards, and customers couldn't read it (nor did they trust the meter readers). It wasn't until a decade after municipal electrical networks were up and running that another inventor came up with a reliable watt-hour meter. Now we can hardly imagine buying electricity any other way.

A hundred years later, the information industry still lacks an information meter. George Gilder, hi-tech gadfly, puts the problem this way: "Rather than having to pay for the whole reservoir every time you are thirsty, what you want is to only pay for a glass of water."

Indeed, why buy an ocean of information when all you want is a drink?

No reason at all, if you have an information meter. Entrepreneur Peter Sprague believes he has just invented one. "We use encryption to force the metering of information," says Sprague. His spigot is a microchip that doles out small bits of information from a huge pile of encrypted data. Instead of selling a CD-ROM crammed with a hundred thousand pages of legal documents for $2,000, Sprague invented a ciphering device that would dispense the documents off the CD-ROM at $1 per page. A user only pays for what she uses, and can use only what she pays for.

Sprague's way of selling information per-page is to make each page unreadable until it is decrypted. Working from a catalog of contents, a user selects a range of information to browse. She reads the abstract or summaries (and is charged a minuscule amount). Then she selects a full text, which is decrypted by her dispenser. Each act of decryption rings up a small charge (maybe fifty cents). The charge is tallied by a metering chip in her dispenser that deducts the amount from a prepaid account (also stored on the metering chip), much as a postage meter deducts credit while dispensing postage tapes. When the CD-ROM credit runs out, she calls a central office, which replenishes her account via an encrypted message sent on a modem line running into her computer's metering chip. Her dispenser now has $300 credit to spend on information -- by the page, by the paragraph, or by the stock price, depending on how fine the vendor is cutting it.

What Sprague's encryption-metering device does is decouple information's fabulous ease in being copied from its owners' need to have it selectively disconnected. It lets information flow freely and ubiquitously -- like water through a town's plumbing -- by metering it out in usable chunks. Metering converts information into a utility.