RE: Info needed on observers

[ljo@ausys.se (Johansson Lars)]

>I am currently preparing a paper on payment systems for the Internet
>and related issues.  I recently found out that so-called observers could
>be placed on smart cards (in order to prevent double spending, or even to
>prevent people from cheating on taxes...).
>
>To be honest that's about all I know about observers and I am very eager
>to find out more.  I am, however, having a hard time finding interesting
>references on this subject.
>
>Hence, all suggestions to get me started would be extremely welcome.
>Questions of particular interest are: possible functions (and limits),
>how 'real' are they already?, what about privacy?, ...
>
>Many thanks in advance.

Leo,

The concept 'Wallet (Databases) with Observers' was introduced by
David Chaum and Torben Pryds Pedersen at Crypto '92. See the
proceedings of that conference. Put shortly, it is a method of preventing
double spending of digital cash, stored on a smart card, and still
provide full payer anonymity.

Since then, others have worked on improving the original protocol,
e.g. Ronald Cramer, Niels Ferguson and Stefan Brands. In particular
the system by Stefan Brands have drawn much attention since it was
said to offer "provable security". It is his protocol that is used in the
european project CAFE.

In CAFE, each user is thought to have a PDA (Personal Digital Assistant)
which stores the digital cash. The observer is a smart card that has to
be inserted into the PDA in order to spend that cash. I don't know how
far this project has come, implementation wise but I think another project,
called SWAP was about to test these electronic wallets in practise.

Regards,
/Lars Johansson
ljo@ausys.se