Half penny here, a half penny there And pretty soon, you're talking real money. At least, that's the promise of digital money, and electronic payment system being cooked up in Silicon Valley sweatshops. When you hold cash or a check, you're holding a promise by someone to pay someone else a certain amount. When you hold digital money, you're holding a bag of computer code that amounts to the same thing. That's the word The Why Files got from Dan Lynch, chairman of CyberCash. CyberCash is a bank service firm, Lynch said. "We help banks use real-time banking. All their customers are already using computers, and the banks are pretending they don't," Lynch says. Visa and MasterCard long ago figured out the profitability of electronic payments. But their transaction cost is about half a buck. That's not much good if you want to buy a recipe for a quarter, or want to rent software for a day for a couple of bucks. In fact, CyberCash has gone beyond vaporware -- you can actually spend the stuff. Here's how it works.

			You buy a "bag of code" from a bank.
			When you are on line and want to spend some of your CyberCash, you simply "pay" a merchant who accepts the stuff.
			At the end of the day, the merchant transfers ("deposits") the bits in her account, which then becomes cash.
			CyberCash makes its money on the transactions, Lynch says. How much is it planning to charge? "The fee varies for a variety of reasons," he says, not the least of which is that we have no idea what people are willing to pay."
			By entering the business of trading code for cash, CyberCash (and its competitors) have entered the ultimate information-age business.

To put this in perspective, there's an on-going effort to crack a Data Encryption Standard (DES) 56-bit key, right now. You can help out in this "brute force" attempt to find the right key. Check out the DES Challenge. Take a look here for some staggering statistics: DESCHALL Status Report. See the status of The Why Files effort toward getting the correct key.

And it's pretty complex code, since anybody who breaks it will be breaking the bank. A successful transaction would go through about 50 lines of code, Lynch says. But there are 100,000 lines of "failure code," intended to deter criminals and embezzlers eager to break into the system. Half of the company's 200 employees are programmers, Lynch says. What about internal embezzlement? Couldn't somebody who had contributed to the development break in? Yes, but the "Master key," the one that can unlock any transaction, is distributed among 10 people, Lynch says. To prevent fraud, the encryption (defined) keys contain 1024 bits. That means a random attepmt to unlock the bag of bits would have one chance in 2 1024 of succeeding. If you don't want to calculate that monster, trust us. It's a big number. Still, eventually, somebody will break the code, Lynch says. Thus the company has bought surety bonds to repay anybody who gets ripped off. Want to learn to read a stock table?

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