Jim Miller says:
So to prove that the bank is lying you show a third party your copy of the digitally signed receipt of the disputed transaction? I assume the third party uses the bank's public key and your public key to verify the receipt.
Presumably something like that.
This brings up a good question: How does the withdraw of digital money from a bank account work? In particular, how does the bank simultaneously give you money and a receipt that neither party could repudiate?
I can see how they could give you the money and a receipt signed by the bank.
I do not yet see how they could simultaneously give you the money and a receipt signed by both parties.
It needn't be signed by both parties. The bank could always simply claim that you'd never given them an order to withdraw money and refuse to give it to you -- cheating halfway into giving you a receipt isn't interesting, so it also needn't be simultaneous. What needed is a) the bank has to be able to show a third party a signed request for every transaction they've performed, and b) you have to be able to show a third party a signed (by the bank) receipt for every transaction you've performed. In other words, you are protected because the bank can't simply claim to the arbitrator "oh, he withdrew all his money yesterday" because they can't show an order. The bank is protected because you can't claim "oh, I deposited ten million dollars yesterday" if you can't show a receipt. Perry