Bill Frantz writes:
Garfinkel described it like this: [...] "This counterfeit currency looked just like the real thing, except it was a fraud. She even found some of it -- a digital dollar that was signed and sealed by the US government's secret key, yet had a serial number that had never been issued. The money that was being made was on the Net. It was everywhere and nowhere. And it was encrypted, so that we wouldn't even know it if we found it. Last month, we estimate, the total fraud was up to $900,000 a month, and it is increasing still."
I don't see how this third scam would work in a system such as DigiCash which uses online clearing. Unissued serial numbers would be refused when presented for clearing.
The whole point of DigiCash is that its blind to the issuing bank; it doesn't know any serial numbers. However, Garfinkel's journalism is faulty, because the bank would never see "unissued serial numbers" in a system like DigiCash. Perry