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Digital cash
- 1. Digital Cash PresentBy Kevin, Hiren, Amit, Kai
- 2. What is DigitalCash? ¨ 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.
- 3. Key Properties ¨Secure ¨ Anonymous ¨ Portable ¨ Reusable ¨ User-friendly
- 4. Digital Cash vsCredit Card Anonymous Identified Online or Off-line Online Store money in digital wallet Money is in the Bank
- 5. The Online Model ¨ Structure Overview Link with other banks Deposit Coins Bank Withdraw Coins Payment User Merchant
- 6. Pros and Consof 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
- 7. The Offline Model ¨ Structure Overview Bank Merchan t User Temper-resistant device Others T.R.D .
- 8. Pros and Consof 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
- 9. Traceable Signature Protocol Merchant Customer Bank m message m = amount, serial no (m)d d is secret key of the Bank (m)d spend send m (m)d send (m)d verify
- 10. Blind Signatures ¨Adda 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 message
- 11. Untraceable Digital Cash ¨Create k items of m m1 = (…, amount, serial number) mk = (…, amount, serial number) Random Serial Number m1 Random Serial Number , …, mk
- 12. Untraceable Digital Cash ¨Create blinding factors:b1 e,…, bk e ¨Blind the units - m1b1 e, …, mk bk e m1b1 e mkbk , …, e Bank ¨Send to bank for signing
- 13. Untraceable Digital Cash ¨Bank chooses k –1 to check ¨Customer gives all blinding factors except for unit i ¨Bank checks they are correct i
- 14. Untraceable Digital Cash ¨Bank signs the remaining one and sends it back – (mbe )d = mdbiii i Customer ¨The customer removes the blind using bi Serial no -1 mi d
- 15. Problem! ¨When themerchant 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
- 16. How to makeit off-line
- 17. Secret Splitting ¨Amethod 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
- 18. Cont… ¨E.g. UserID = 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
- 19. A Typical Coin ¨Header Information ¨Serial number ¨Transaction Item – pairs of user ID’s ¨ User ID: 1500 3090 4545 6159 5878 7992
- 20. A Typical Coin ¨Header Information ¨Serial number ¨Transaction Item – pairs of user ID’s ¨ User ID: 1500 XOR 3090 = 2510 4545 XOR 6159 = 2510 5878 XOR 7992 = 2510 User ID
- 21. Blanking Randomly blankone side of each identity pair ¨ User ID: 0 3090 4545 6159 5878 7992
- 22. Blanking Randomly blankone side of each identity pair ¨ User ID: 0 3090 4545 0 5878 7992
- 23. The coin isnow spent You can no longer tell who owns the coin ¨ User ID: 0 3090 4545 0 5878 0 •Merchant would now deposit this coin into the bank
- 24. The coin iscopied 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
- 25. How can wecatch the user? ¨ Original Coin ¨ User ID: 0 3090 4545 0 5878 0 ¨ Duplicate Coin ¨ User ID: 1500 0 4545 0 0 7992 This is what is in the bank
- 26. How can wecatch the user? ¨ Original Coin ¨ User ID: 0 3090 4545 0 5878 0 ¨ Duplicate Coin ¨ User ID: 1500 0 4545 0 0 7992 This is what is in the bank 3090 XOR 1500 = 2510 5878 XOR 7992 = 2510 User ID
- 27. Probability of catchingthe 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
- 28. Reusability ¨Once thecoin 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
- 29. Setup ID=HIREN ID=KEVIN ID=AMIT
- 30. Coins ¨ UsersCoin ¨ User ID: A MIT AM IT AMI T
- 31. Amit spends hiscoin at Hirens shop The coin will now look like this: Amit no longer owns the coin, it is bounded to Hiren User ID: A 0 0 IT AMI 0 HI REN HIR EN H IREN
- 32. Hiren can nowgo 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
- 33. Hiren can nowgo 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
- 34. Size Matters! ¨Coinm = (Serial num, denomination, Transaction list (transactions * user ID), Other Header info) ¨Limit size by Validity Period and/or max Transactions
- 35. Other proposals ¨Whatif you what buy something that costs £4.99 and you have £5 coin? ¨Would have a ‘file’ for every coin £4 £2 £2 £1 £1 £1 £1 £2 £1 £1 £2 £1 £1
- 36. Fair Blind Signatures ¨Possible solution to undetectable money laundering or ransom demands Sender Signing protocol Signer Message-signature pair Un-linkable View of protocol Judge
- 37. Conclusion ¨Feasible froma purely technological perspective ¨Anonymous is at the heart of the government's attack ¨Cannot attract funding
- 38. Advantages: ¨ Convenience ¨ Secure ¨ Handling costs ¨ Time saving ¨ Transaction Costs
- 39. Global Disadvantages ¨Safety Issue ¨ Physical Securities ¨ Users Issue ¨ Legal problems
- 40.