The Market Failure of Anonymity Services

While technologies for anonymous communication have been thoroughly researched and despite the existence of several protection services, the deployment of such services has not yet reached the mass market of end users. So far only a very small fraction of users are using anonymity services and early adopters, which are necessary to reach a critical mass of adopters, have not been attracted. Consequently, there is no beneficial market today for anonymity services. In this paper we conduct an analysis grounded in the diffusion of innovations theory on the reasons for the slow diffusion of anonymity services. We conclude that an unclear relative advantage, a high complexity and the inability to observe or demonstrate that the communication is really anonymous are major hindrances. Furthermore, we discuss several possibilities on how to stimulate the adoption.

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