From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Sun Mar 09 2003 - 15:21:51 MST
----- Original Message -----
From: "Hal Finney" <hal@finney.org>
> Rafal writes:
How does Palladium work?
>
> Basically Palladium attempts to let the computer user prove to a
> remote computer what program he is running locally. It achieves this
> through a rather complex system involving cryptography, secure
> hardware, and special extensions to the operating system.
>
> Perhaps the remote server will download some data to the user, but only
> to a program which it knows will observe the Digital Rights Management
> (DRM) rules built into that data. The user can use Palladium to prove
> to the remote system that he is running one of the programs which will
> follow the DRM rules. In this way the transfer can go forward on terms
> which are mutually acceptable to both parties.
### Thanks for the explanation. This is by itself a good idea, it makes
error-free content copying a hassle, but not impossible (at least in the
case of text), so there is some balance between the copyright holder and the
user - if the owner has too high demands, he will get pirated, but the
reasonable ones will have users willing to pay what they see as reasonable
fees.
On the other hand, if this type of hardware became mandatory, the situation
would be very bad - you would be barred from owning general-use computing
devices, and the owners would have extreme advantage over users. A very,
very bad idea.
Any solution must provide a balance between the short-term interests of
content providers and content users (which are at cross-purposes), to
achieve maximization of long-term gains for both. The optimal balance point
changes with time, due to technological progress (MP3) and can be influenced
by political pressures (e.g. DMCA). This is bad, because it limits
efficiency of the system. In a discussion here with Lee Crocker I once
outlined a system of dynamic copyright where the provider would buy an
injunction against copying from an enforcing/distribution agency (one of
many competing ones), for a fee depending on the cost of enforcement. The
cost would increase exponentially with time and the number of copies made,
so that the price of subsequent copies would be automatically lowered or
else piracy would make further enforcement impossible. Of course, the
customer would also have the choice of enforcement companies, with varying
fee structures and varying schemes for monitoring compliance (with different
levels of intrusion into the user's life). The enforcement companies would
develop a set of multilateral agreements on supporting each other's content
portfolios, but they couldn't push their cooperation too far, or else new
entrants would simply disregard their agreements and live fully off pirated
stuff. The effective copyright duration would not be set as a law, but would
emerge from the interaction of large numbers of players, and would depend on
the type of content (e.g. music copyright would very quickly become
unenforceable, but only after providing the producer with income
proportional to the number of copies made, while copyright on abstruse
technical handbooks would stay longer, because of the smaller number of
users who would be most likely willing to pay more per copy). This would be
a dynamic, free-market scheme for balancing the two sides, similar to David
Freeman's competing private court system.
Rafal
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