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Digital Cash. Present By Kevin, Hiren, Amit, Kai. What is Digital Cash?. A payment message bearing a digital signature which functions as a medium of exchange or store of value Need to be backed by a trusted third party, usually the government and the banking industry. . Key Properties.

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digital cash
Digital Cash

Present By Kevin, Hiren, Amit, Kai

what is digital cash
What is Digital Cash?
  • A payment message bearing a digital signature which functions as a medium of exchange or store of value
  • Need to be backed by a trusted third party, usually the government and the banking industry.
key properties
Key Properties
  • Secure
  • Anonymous
  • Portable
  • Reusable
  • User-friendly
the online model

Link with other banks

Bank

Withdraw Coins

Deposit Coins

Payment

Merchant

User

The Online Model
  • Structure Overview
pros and cons of the online scheme
Pros and Cons of the online scheme
  • Pros
    • Provides fully anonymous and untraceable digital cash.
    • No double spending problems.
    • Don\'t require additional secure hardware – cheaper to implement.
  • Cons
    • Communications overhead between merchant and the bank.
    • Huge database of coin records.
    • Difficult to scale, need synchronization between bank servers.
    • Coins are not reusable
the offline model
The Offline Model
  • Structure Overview

Bank

Others

T.R.D.

Temper-resistant device

Merchant

User

pros and cons of the offline model
Pros and Cons of the offline model
  • Advantages
    • Off-line scheme
    • User is fully anonymous unless double spend
    • Bank can detect double spender
    • Banks don’t need to synchronize database in each transaction.
    • Coins could be reusable
    • Reduced the size of the coin database.
  • Disadvantages
    • Might not prevent double spending immediately
    • More expensive to implement
traceable signature protocol

Merchant

Customer

Bank

send

m

(m)d

spend

(m)d

send

(m)d

verify

Traceable Signature Protocol

m

message m = amount, serial no

(m)d

d is secret key of the Bank

blind signatures

message

Blind Signatures
  • Add a blinding factor b
  • r = (m)be
  • rd = (mbe)d
  • Bank could keep a record of r
  • Remove blinding factor
  • (mbe)d = (m)dbed
  • b-1md
untraceable digital cash

Random Serial Number

Random Serial Number

m1

mk

, …,

Untraceable Digital Cash
  • Create k items of m

m1 = (…, amount, serial number)

mk = (…, amount, serial number)

untraceable digital cash12

m1b1e

mkbke

, …,

Bank

Untraceable Digital Cash
  • Create blinding factors:b1e,…, bke
  • Blind the units - m1b1e, …, mk bke
  • Send to bank for signing
untraceable digital cash13

i

Untraceable Digital Cash
  • Bank chooses k –1 to check
  • Customer gives all blinding factors except for unit i
  • Bank checks they are correct
untraceable digital cash14

Customer

Serial no

Untraceable Digital Cash
  • Bank signs the remaining one and sends it back – (mibei)d = midbi
  • The customer removes the blind using bi-1 mid
problem
Problem!
  • When the merchant receives the coin, it still has to be verified
  • The merchant has to have a connection with the bank at the time of sale
  • This protocol is anonymous but not portable
secret splitting
Secret Splitting
  • A method that splits the user ID in to n parts
  • Each part on its own is useless but when combined will reveal the user ID
  • Each user ID is XOR with a one time Pad, R
slide18
Cont…
  • E.g. User ID = 2510, R = 1500:
  • 2510 XOR 1500 = 3090
  • The user ID can now be split into 2 parts, I.e. 1500 and 3090
  • On their own they are useless but when XOR will reveal the user ID
  • I.e 1500 XOR 3090 = 2510
a typical coin
User ID:

1500 3090

4545 6159

5878 7992

A Typical Coin
  • Header Information
  • Serial number
  • Transaction Item – pairs of user ID’s
a typical coin20
User ID:

1500 XOR 3090 =2510

4545 XOR 6159 =2510

5878 XOR 7992 =2510

A Typical Coin
  • Header Information
  • Serial number
  • Transaction Item – pairs of user ID’s

User ID

blanking
User ID:

0 3090

4545 6159

5878 7992

Blanking

Randomly blank one side of each identity pair

blanking22
User ID:

0 3090

4545 0

5878 7992

Blanking

Randomly blank one side of each identity pair

the coin is now spent
User ID:

0 3090

4545 0

5878 0

The coin is now spent

You can no longer tell who owns the coin

  • Merchant would now deposit this coin into the bank
the coin is copied and spent at another merchant
The coin is copied and spent at another merchant
  • Before the user spent the coin the first time, the user made a copy of it
  • User ID:

1500 0

4545 0

0 7992

  • Merchant would now deposit this coin into the bank
how can we catch the user
Original Coin

User ID:

0 3090

4545 0

5878 0

Duplicate Coin

User ID:

1500 0

4545 0

0 7992

How can we catch the user?

This is what is in the bank

how can we catch the user26
Original Coin

User ID:

0 3090

4545 0

5878 0

Duplicate Coin

User ID:

1500 0

4545 0

0 7992

3090 XOR 1500 = 2510

5878 XOR 7992 = 2510

User ID

How can we catch the user?

This is what is in the bank

probability of catching the culprit
Probability of catching the culprit
  • Depends on the number of the identity strings used
  • Probability of catching a user is:
    • 1 - ½n , where n is the number of identity strings

E.g. n = 5, the probability of catching a user is: 0.97

reusability
Reusability
  • Once the coin has been spent the merchant has to deposit it to the bank
  • Therefore, coin can only be spent once
  • Convenience, ability to give change, unnecessary transactions between bank and merchant
  • Banks database size – less serial numbers
  • Solution – Add the new User ID to the coin
setup
Setup

ID=HIREN

ID=AMIT

ID=KEVIN

coins
Coins
  • Users Coin
  • User ID:

A MIT

AM IT

AMI T

amit spends his coin at hirens shop
Amit spends his coin at Hirens shop

The coin will now look like this:

User ID:

A 0

0 IT

AMI 0

HI REN

HIR EN

H IREN

Amit no longer owns

the coin, it is bounded

to Hiren

hiren can now go and spend his coin at kevin s shop
Hiren can now go and spend his coin at Kevin\'s shop

The coin looks like this:

User ID:

A 0

0 IT

AMI 0

HI REN

HIR EN

H IREN

hiren can now go and spend his coin at kevin s shop33
Hiren can now go and spend his coin at Kevin\'s shop

The coin will now look like this:

User ID:

A 0

0 IT

AMI 0

0 REN

0 EN

H 0

KE VIN

K EVIN

KEV IN

size matters
Size Matters!
  • Coin m = (Serial num, denomination, Transaction list (transactions * user ID), Other Header info)
  • Limit size by Validity Period and/or max Transactions
other proposals

£4

£2

£2

£2

£2

£1

£1

£1

£1

£1

£1

£1

£1

Other proposals
  • What if you what buy something that costs £4.99 and you have £5 coin?
  • Would have a ‘file’ for every coin
fair blind signatures

Sender

Signer

Signing protocol

Un-linkable

Message-signature pair

View of protocol

Judge

Fair Blind Signatures
  • Possible solution to undetectable money laundering or ransom demands
conclusion
Conclusion
  • Feasible from a purely technological perspective
  • Anonymous is at the heart of the government\'s attack
  • Cannot attract funding
advantages
Advantages:
  • Convenience
  • Secure
  • Handling costs
  • Time saving
  • Transaction Costs
global disadvantages
Global Disadvantages
  • Safety Issue
  • Physical Securities
  • Users Issue
  • Legal problems
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