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Unformatted text preview: d governments seem unwilling to give up the control that the current banking system’s audit trail provides. They’ll have to, though. All it will take for digital cash to catch on is for some trustworthy institution to be willing to convert the digits to real money. Digital cash protocols are very complex. We’ll build up to one, a step at a time. For more formal details, read [318, 339, 325, 335, 340]. Realize that this is just one digital cash protocol; there are others. Protocol #1
The first few protocols are physical analogies of cryptographic protocols. This first protocol is a simplified physical protocol for anonymous money orders: (1) Alice prepares 100 anonymous money orders for $1000 each. (2) Alice puts one each, and a piece of carbon paper, into 100 different envelopes. She gives them all to the bank. (3) The bank opens 99 envelopes and confirms that each is a money order for $1000. (4) The bank signs the one remaining unopened envelope. The signature goes through the carbon paper to the money order. The bank hands the unopened envelope back to Alice, and deducts $1000 from her account. (5) Alice opens the envelope and spends the money order with a merchant. (6) The merchant checks for the bank’s signature to make sure the money order is legitimate. (7) The merchant takes the money order to the bank. (8) The bank verifies its signature and credits $1000 to the merchant’s account. This protocol works. The bank never sees the money order it signed, so when the merchant brings it to the bank, the bank has no idea that it was Alice’s. The bank is convinced that it is valid, though, because of the signature. The bank is confident that the unopened money order is for $1000 (and not for $100, 000 or $100, 000, 000) because of the cut-and-choose protocol (see Section 5.1). It verifies the other 99 envelopes, so Alice has only a 1 percent chance of cheating the bank. Of course, the bank will make the penalty for cheating great enough so that it isn’t worth that chance. If the bank refuses...
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This note was uploaded on 10/18/2010 for the course MATH CS 301 taught by Professor Aliulger during the Fall '10 term at Koç University.
- Fall '10