Digital Cash

[mpd@netcom.com (Mike Duvos)]

Hal writes:

 > The notion of a "cryptographically tamperproof software
 > module" is interesting, but I'm not sure such a thing exists
 > or could exist.  The secure offline cash systems I have seen
 > rely on tamper-resistant HARDWARE modules which at least
 > exist although this requirement would be very inconvenient.

Quite a bit of work has already been done on this concept.
Basically one generates a very large sequence of machine
instructions which computes the image of the output of an
algorithm under a strong cipher from the image of the input under
the cipher.  A controlled amount of redundant information is
added to both the input and output.  This yields a piece of code
so obtuse and complex that nothing may be gleaned about what
algorithm it is executing by observing it run.  Figuring out what
it actually is doing is a cryptanalytically hard problem.  Also,
determining a way of modifying the code which does not break it
is a similarly hard problem.

Once encased in such a module, an algorithm may be distributed
with no fear that it will be stolen.  This raises interesting
poblems with software patents, since one can not tell from such a
module whether it is performing a function in a way which
infringes.

Of course, there is a severe performance penalty to be paid for
such protection.  But in the case of digital cash, it could
provide a mechanism for implementing a secure offline system
without special hardware.

 > Again, I don't know how you handle the case of two
 > almost-simultaneous attempts to redeem the same note (or
 > piece of cash).  Both notes are identical, so having the two
 > notes gives you no more information than having just one,
 > hence if one note is anonymous so will two be.  You know
 > someone is cheating in this situation, but who?  One of the
 > redeemers may have stolen a copy of the cash from the other;
 > the two redeemers may be working together; or the note maker
 > may be working with one of the redeemers having slipped them
 > a copy of the note as soon as it was presented for
 > redemption.  How can a court decide who is right?

Assuming the transactions are done via a tamperproof module
distributed by the issuer, and the math is arranged such that
using a note in multiple transactions reveals the perpetrator,
the system prevents anonymous double-spending while still
providing all the benefits of digital cash.  Of course, you could
claim that someone was in possession of your tamperproof module
and associated passwords, but it is your responsibility to guard
these and report them stolen promptly, just as with credit cards
and PINs.

P.S. Is anyone worried that the Netherlands seems on the verge of
banning PGP?  Wasn't this country once a hacker's paradise?

-- 
     Mike Duvos         $    PGP 2.3a Public Key available    $
     mpd@netcom.com     $    via Finger.                      $