[ppml] alternative realities (was PIv6 for legacy holders (/w RSA + efficient use))

Paul,

On Jul 30, 2007, at 7:22 PM, Paul Vixie wrote:
> i'd like to know what makes this alternative the most likely.

Roughly, the way I figure it, given:

a) there is a demand for that resource (say, people who want to  
connect to the Internet)
b) there is a limited supply of a resource (say, for argument, unused  
IPv4 addresses)
c) there are entities who have more of the resource than they need
d) there are entities who are willing to exchange value for that  
resource
e) "traditional" mechanisms to obtain the resource will not work (no  
more free pool)

Then you have a breeding ground for a market (color isn't important  
here).

The situation today, given:

1) IPv6 isn't backwards compatible with IPv4
2) upgrading to IPv6 isn't free
3) there is no killer IPv6 app to drive acceptance
4) the vast majority of content is only available over IPv4
5) RIR policies effectively block the establishment of markets

then the vast majority of users have no business incentive to deploy  
IPv6 and hence no reason to ask your ISP for IPv6 service.  Without  
customer demand for IPv6, it has been empirically shown ISPs do not  
have incentive to undertake the costs to deploy IPv6.  Hence, demand  
for IPv4 continues unabated, but that demand is met by the registries.

Now, fast forward a couple of years.  The IPv4 free pool exhausts.   
What changes?

(1) probably won't change (although someone might come up with a  
"superNAT" that allows for backwards compatibility).
(2) will reduce over time, but it will never be free.
(3) might happen, but I wouldn't bet the farm on it.
(4) will probably change (call me an optimist), but I argue there  
will be significant content that is not available via IPv6 for the  
foreseeable future.
(5) will become less effective over time as more and more addresses  
are traded on the black market (I actually expect VCs to jump into  
the nascent address market: remember that the only reason RIR  
policies works is because the ISPs abide by those policies. A startup  
address market company could likely short-circuit this by simply  
paying the ISPs to look to their registry before looking at the RIR  
registries).

So, I believe demand driven by (4) for IPv4 will continue satisfying  
(a) above.  Looking at the rest of the conditions for the creation of  
a market:

(b) will obviously remain true.
(c) is true now (unless you believe MIT needs all 16M addresses they  
have, etc.)
(d) has been demonstrated in the past and I doubt it will go away.
(e) will obviously be true.

So, from my perspective, it would seem the conditions are ripe for a  
market.  The question then becomes, why wouldn't a market form? I  
haven't been able to come up with a convincing reason.

> if someone
> who holds the "markets are efficient and inevitable so just relax"  
> view
> can show how that view is falsifiable, i'm listening.

I don't have a strong opinion on whether the markets are efficient.   
However, given a market already exists, albeit one that is buried  
under the need to buy/sell companies which hold IP address assets,  
I'm not sure how you can say they aren't inevitable.

And just to be perfectly clear, I don't necessarily consider this a  
good thing.  The creation of the entities known as "domainers" is a  
perfect example of the risks of market driven economics.  However, it  
isn't clear to me that playing King Canute and demanding the tide not  
come in is a good stewardship nor a good way to address those risks.

Rgds,
-drc