Hettinga wrote:
> At 9:22 PM -0400 on 5/23/01, Craig Spencer wrote:
>
> > Unfortunately, this is not quite accurate. All "digital bearer
> > instrument" schemes require a central clearing mechanism to
> > prevent double spending. This amounts to an account based system.
>
> Fortunately, :-), it doesn't. I've gone over this point with
> *everybody*, including cryptographers like Ron Rivest, :-), and I
> can see how you can be confused, but don't conflate an *on-line*
> system, which is, in fact, necessary for non-repudiation in any
> current internet payment system, book-entry or bearer, with an
> *account-based*, or *book-entry* system, like VISA, or ACH, SWIFT,
> or even E-Gold.
(snip)
> Again, just because non-repudiation -- and, probably, some unknown
> cryptographic axiom itself necessitating that any participant in a
> cryptographically strong payment system share some conditionally-
> revealed secret with a financial intermediary in real-time -- requires
> us to do only on-line transactions for any transaction to execute
> clear and settle, especially instantaneously, it doesn't mean that
> a given transaction system is account-based.
There is no point in arguing about the meaning of "account based" as
this just changes the subject. The context of the discussion was
how transactions could be made more secure not the meaning of
account based.
The comment to which I was replying was the following.
> The other long term solution is to completely abandon account based
> systems and switch to digital bearer instruments or "digital cash".
> These can be stored on the users hard drive in an encrypted form, or
> stored on a smart card, or stored on a zip disk, offline where
> hackers can't reach them.
This suggested that the risks entailed by the need for communication
with a remote server would be eliminated by using "digital bearer
instruments". My point was that because
> an *on-line* system, which is, in fact, necessary for non-repudiation
> in any current internet payment system, book-entry or bearer
and
> necessitating that any participant in a cryptographically
> strong payment system share some conditionally-revealed secret
> with a financial intermediary in real-time
this was not exactly true. The cryptocraphic protocols of digital
bearer instruments certainly make them more secure but there still
is vulnerability due to the need for communication with a central
clearing mechanism.
CCS
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