Digital Cash

1
Digital Cash

• Damodar Nagapuram

2
Overview

• Monetary Freedom
• Digital Cash and its importance
• Achieving Digital Cash
• Disadvantages with digital cash
• Conclusion

3
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

4
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 todays e-commerce

5
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

6
Key Elements of Digital cash (contd.)

• Other characteristics
• Divisibility
• Off-line capability
• Peer-to-Peer transactions
• Scalability

7
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

8
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

9
Protocols (contd.)

• Payment phase
• n-acct number
• Her public key k signed by bank
• Shop can verify Alices acct, pub key
• Shop can verify sign. on the receipt, amount
• Receipt fwd.ed to bank

10
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

11
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

12
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

13
Conclusion

• Promising Technology
• Monetary freedom
• Several issues to resolve before we can truly
  achieve this