Cryptography Reference
In-Depth Information
Checks have to be covered . This is easier for electronic checks than it is
for paper ones: all electronic checks are signed by the bank and auditable
by everyone, since it will issue only covered checks.
Checks have to be tamperproof . With electronic checks, this means in
particular that they cannot be used more than once, since copying cannot
be prevented.
The second requirement is not as easy to fulfill as the first. If we take the word-
ing literally, it means: any attempt to pay once more using the same check shall
be declared to be invalid. No matter how the protocol is handled — the mer-
chant has to have the check verified by a centralized party, which is generally
the bank itself. Such protocols are called online-payment protocols . They can
cause extremely high network loads. Moreover, every merchant has to be able
to quickly establish a connection to many or all banks, and every bank has to
be able to process its entire electronic payment traffic in real time.
This is unrealistic with the current state-of-the-art in technology, so people
developed offline-payment protocols . With an offline-payment protocol, the
merchant collects checks as usual and submits them to his bank or several
banks in 'bundles'. In this case, submitting copied checks cannot be prevented,
so there has to be a way to detect this type of fraud beyond any doubt. The
Chaum - Fiat - Naor protocol is such an offline protocol. But there is another
important requirement:
The payment traffic must be anonymous . This means that the merchant
learns the customer and the bank. When the merchant submits checks,
however, the bank may see that they are their checks and that they are
submitted by that merchant, but the customer must not be revealed.
Why is this so important? The bank always knows both the issuer and the
presenter of every clearing check! True, but only in theory. A considerable
part of the payment traffic still involves anonymous cash money and bills and
other hand-written papers that are not completely scanned so that they are not
completely back-traceable.
In contrast, gapless logging is no problem for digital checks and coins. 'So
what,' you might say, 'let the bank know where I buy my stuff.' That's a dan-
gerous mistake. Payment systems can reveal behavioral patterns, such as your
preparedness to take risks, punctuality, personal preferences, contributions to
political parties, cash reserves, employment relationships, alimonies, and many
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