IT430_lecture26_E-CASH PAYMENT SYSTEM

E-CASH PAYMENT SYSTEM

In electronic payment systems we
have read about many systems, we learned about Credit and Debit Card
systems, Virtual PIN payment system, First Virtual Payment systems.
After that we learn that we make our payments by e-checks, and e-checks
are electronic form of paper cheques.

Well today, we will learn
about e-cash/digital Cash. You may call it e-cash, digital cash or
DigiCash or you may call it electronic cash, these all words have same
meaning. In this payment system, There are three participants buyer,
merchant and bank. Both, symmetric and asymmetric type of cryptography
is used in this system.

E-CASH COINS:

In this
system, currency is called E-cash Coin. In our real life a coin has 2
basic elements, one it made with aluminum or steel whatever that matel
is called and second it has a specific shape like round. Isn't it? But
our e-cash coins are much differ from real coins which we daily seen in
our life. Well an e-cash coin has three elements/parts or you may say
it has three identities from these three we can recognize e-cash coin.

1. serial #,
   
2. keyversion
   
3. serial no. signed by the secret or private key of a certain denomination of the e-cash bank.
   

How E-cash system works:

The system was based on digital tokens called digital coins. DigiCash operated as follows:

• A
  customer establishes an account with the bank or other organization
  that could mint and receive digital coins. The customer's account was
  backed by real money in some form, for instance it could be linked to
  the customer's checking account.
  

• The customer also needs to download and install a software called electronic wallet.
  
• To
  obtain DigiCash, the customer uses the electronic wallet to create
  digital coins. The coins are sent to the bank to sign. When the coins
  are signed, the equivalent amount of money is withdrawn from the
  customer's account.
  

In the proposed protocol the customer
also had an option of "blinding" the coins. To blind a coin, the
customer multiplies it by a random number r before sending it to the
bank to sign. The bank signs the data. After the data and its digital
signature are sent to the customer, the customer computes the digital
signature of the original (non-multiplied) coin by dividing the bank's
signature by r. This way the bank doesn't know the coin, but the
customer, who knows r, can trace his/her payments. Blind signatures
have not been implemented.