From: tcmay@got.net (Tim May)
You missed a very good talk by Ian Goldberg of UC Berkeley at the Saturday Cypherpunks meeting at Stanford, where Ian talked for more than an hour on just this issue. (He also talked for an hour on his crack of the RSA challenge using 250 workstations...this was also a good talk.)
I wish I could have heard that, it sounds good... A simple idea we have discussed for full anonymity uses the idea of exchanging coins at the bank. You make an anonymous connection to the bank, supply some ecash you have received along with some blinded new ecash. The bank verifies that the ecash is good and signs your blinded ecash, sending it back to you. You unblind it and have good, fresh smelling ecash which you can keep, spend, or later deposit in your account. If the merchant performs this exchange operation on-line as soon as he receives ecash, then his anonynmity is protected. The customer is protected too, by the blinding he used when he withdrew the ecash earlier. So both sides remain anonymous. It sounds like Ian may have worked out details of a system where third parties do these exchanges. Banks may be reluctant to allow them for liability reasons, and the market, abhoring the vacuum, will supply intermediaries who perform exchanges for a fee. Resolving the various forms of cheating is the hard part. When Lee asks about a signed receipt, it is hard to understand what is the point if the seller is fully anonymous! A signed receipt from a freshly-minted key is not of much use to anyone. If the participants are using persistant pseudonyms then whatever reputation capital they have can be put on the line when cheating happens, although it still may be hard to tell who cheated whom. Did the customer pass bad cash and claim it was good, or did the merchant deposit good cash and claim it was bad? The same thing could happen every day at the supermarket, of course. A customer insists they paid $20 but got change for a $10. If dozens of customers say the same thing has happened to them, we start to mistrust the market, while if several businesses say this particular customer has made the same claim to them, we blame the customer. Hal