Subjects:
but now it is rapidly becoming commercialized. It has on-line "shops", even
electronic "shopping malls". Customers, browsing at their computers, can view
products, read descriptions, and sometimes even try samples. What they lack is
the means to buy from their keyboard, on impulse. They could pay by credit card,
transmitting the necessary data by modem; but intercepting messages on the
Internet is trivially easy for a smart hacker, so sending a credit-card number
in an unscrambled message is inviting trouble. It would be relatively safe to
send a credit card number encrypted with a hard-to-break code. That would
require either a general adoption across the internet of standard encoding
protocols, or the making of prior arrangements between buyers and sellers. Both
consumers and merchants could see a windfall if these problems are solved. For
merchants, a secure and easily divisible supply of electronic money will
motivate more Internet surfers to become on-line shoppers. Electronic money
will also make it easier for smaller businesses to achieve a level of automation
. . .
a global marketplace, not one that's tied to bankers' hours. Although
encryption fortifies our electronic transaction against thieves, there is a
cost: The processing overhead of encryption/decryption makes high-volume, low-
volume payments prohibitively expensive. We need to resolve four key technology issues before
consumers and merchants anoint electric money with the same real and perceived
values as our tangible bills and coins. This proves ownership of the currency when it's being spent.
Millicent, a division of Digital Equipment, may achieve this goal.
Encryption may help make the electric money more secure, but we also need
guarantees that no one alters the data--most notably the denomination of the
currency--at either end of the transaction. If unchecked, all our transactions, as well as analyses of our
spending habits, could eventually reside on the corporate databases of
individual companies or in central clearinghouses, like those that now track our
credit histories. Everyone who
expects to receive a message publishes a key.
The bank then sends the authenticated coins back to the consumer, who removes
the blinding factor. To send digital cash to someone,
you look up the public key and use the algorithm to encrypt the payment. Millicent
uses a variation on the digital-check model with decentralized validation at the
vendor's server. Electric-money
systems must be able to handle high volume at a marginal cost per transaction. One possible
implementation of secure hash functions is in a zero-knowledge-proof system,
which relies on challenge/response protocols.
The fourth technical component in the evolution of electric money is flexibility. Consumers register their credit cards with First Virtual over
the phone to eliminate security risks, and from then on, they uses personal
identification numbers (PINs) to make purchases.
Essay's Topics
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