Digi cash

1. Digital Cash
Dr Paras Kothari

2. Overview
►Monetary Freedom
►Digital Cash and its importance
►Achieving Digital Cash
►Disadvantages with digital cash
►Conclusion

3. Why Monetary Freedom?
► Monetary transactions
 Cash, Cheque, 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 used 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 Cheques
 Similar to paper Cheques+ digital signatures
►Electronic coupons
 Similar to digital Cheques but limited to one
issuer

8. Protocols for Digital Cash
► Withdrawal phase of
secure credit card
scheme
► Ram 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 Ram’s
acct, pub key
► Shop can verify sign.
on the receipt, amount
► Receipt forwarded 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 Ram
►Ram sends it to Krishna
►Krishna deposits with bank account

11. Blind Signatures (contd.)
►Problem: Bank knows that Ram and Krishna
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
► Large amount transaction 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

14. Query Session
More learning is required to solve
doubts …