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Digital Cash. Damodar Nagapuram. Overview. Monetary Freedom Digital Cash and its importance Achieving Digital Cash Disadvantages with digital cash Conclusion. Why Monetary Freedom?. Monetary transactions Cash, Check, and Credit Card transactions

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Digital cash l.jpg

Digital Cash

Damodar Nagapuram


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Overview

  • Monetary Freedom

  • Digital Cash and its importance

  • Achieving Digital Cash

  • Disadvantages with digital cash

  • Conclusion


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Why Monetary Freedom?

  • Monetary transactions

    • Cash, Check, and Credit Card transactions

  • Organizations keep records for purchases, communication, financial history

  • Can be against privacy

  • Consumers need to trust that net will make safeguard their privacy and transactions, while continuing to make shopping easy and enjoyable

  • Freedom from Unit of transaction


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Digital Cash

  • Digitally signed payment message

  • Piece of information which is recognized as having value

  • This piece is then accepted by Merchants

  • True digital cash stores and conveys meaning in and of itself

    • Not just represent value in bank account

  • This is missing in today’s e-commerce


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Key Elements of Digital cash

  • Minimum requirements

    • Confidentiality

      • Anonymity

      • No monitoring

    • Authentication

      • Digital Cash is valid

      • Banks can authenticate parties

    • Integrity

      • Should not be easy to alter a piece of digital cash

    • Non-Repudiation

    • Confirmation that the transaction was complete

    • Settlement


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Key Elements of Digital cash (contd.)

  • Other characteristics

    • Divisibility

    • Off-line capability

    • Peer-to-Peer transactions

    • Scalability


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Achieving digital cash

  • Register Based Systems

    • A counter is stored on a smart card

  • E-cash

    • Tokens storable on card/computer

  • Digital Checks

    • Similar to paper checks + digital signatures

  • Electronic coupons

    • Similar to digital checks but limited to one issuer


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Protocols for Digital Cash

  • Withdrawal phase of secure credit card scheme

  • Alice sends her public key k to bank

  • Bank returns a signature for it


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Protocols (contd.)

  • Payment phase

  • n-acct number

  • Her public key k signed by bank

  • Shop can verify Alice’s acct, pub key

  • Shop can verify sign. on the receipt, amount

  • Receipt fwd.ed to bank


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Blind Signatures

  • A bank can create a digital bank note by signing a message which specifies the serial number and value of the note

  • Bank sends to Alice

  • Alice sends it to Bob

  • Bob deposits with bank account


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Blind Signatures (contd.)

  • Problem: Bank knows that Alice and Bob have just mad a transaction.

  • Solution: Blinding signatures

    • Multiply the note number by a random factor before sending it to bank

    • Divide the number after its signed by bank

  • Double spending problem

  • Verification with bank when a digital note is used


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Issues with Digital Cash

  • Easy to do illegal transactions if forged/ technology failures

  • $1 million in paper will be heavy!!

  • Consumer resistance: Lack of complete trust

  • Other issues:

    • Power failures

    • Loss of records

    • Undependable software


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Conclusion

  • Promising Technology

  • Monetary freedom

  • Several issues to resolve before we can truly achieve this


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