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 today’s 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 Alice’s 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