digital clearinghouse idea
I am a crypto-novice, so perhaps you can develop these ideas better. But, here goes. Right now, if you want an anonymous transaction done and a small amount of money is involved, you can go down to a bank or Seven Eleven and purchase a money order for cash. You mail the money order, and it is very hard for anyone to find out who you are. The money order has introduced anonymity between you and the payee. My concept is similar, but it would seem that any such concept must work with your existing checking accounts, to be useful today. So, to establish an ecash digital clearinghouse, how about the following: 1. Set up an Ecash Clearinghouse (ECH) in bank secrecy haven, such as Bahamas, Liechtenstein, etc. 2. Subscribers to ECH pay $2/month plus small transaction charge (say $.15/transaction) 3. Each subscriber authorizes his bank to accept electronic checks from ECH as debits to his account. Electronic checks are currently handled by the U.S. banking system as Automatic Clearinghouse transactions, and are used by organizations such as Checkfree(tm) and by insurance companies to automatically take money out of your account each month for premiums, etc. 3. Ecash is emailed to ECH. 4. ECH issues an electronic debit to payor's account. This debit clears, so now the money is in the account of the ECH. 5. ECH issues an electronic payment to the payee's account. This electronic payment is from the ECH, with the ecash number as the "backup" for the transaction. 6. Now everyone has gotten paid. Weaknesses perhaps you can address: the ECH "knows" who is the payor and payee for each transaction. Similar to anon.penet.fi, in that there _is_ a list somewhere which could be seized and use to reconstruct the transactions, e. g. for "law enforcement" purposes. Perhaps ECH subscribers could open an ECH account as a "numbered" account, but even so, since the ECH would have each subscribers' regular checking account number, this wouldn't be much protection. Without the ECH knowing your checking account number, ecash isn't convenient. Any ideas? BROOKFIELD ECONOMICS INSTITUTE (U.S.A.) Limited ----------------------------------------------------------- Do you want to subscribe to our newsletter? Send email to brookfld@netcom.com, with the words SUBSCRIBE BBA your_first_name your_last_name as the subject of the message. Do you have a business question? Send it to brookfld@netcom.com. Questions which Brookfield determines are of common interest will be answered in the newsletter. Submissions become property of Brookfield Econcomics Institute. Copyright (c) 1994 Brookfield Economics Institute (U.S.A.) Limited. Rights are granted for use or duplication of this information by subscribers and individuals, but all commercial rights and rights of resale are reserved. Other use or duplication is prohibited. Brookfield is not engaged in rendering professional advice. In business and legal matters the advice of an attorney or other competent professional should be sought.
Electronic checks are currently handled by the U.S. banking system as Automatic Clearinghouse transactions, and are used by organizations such as Checkfree(tm) and by insurance companies to automatically take money out of your account each month for premiums, etc If you use the ACH system, you can't pre-authorize sporadic payments for arbitrary amounts. Since the receiving institution enters the transaction into the ACH, and since the security environment of the ACH is, er, primitive to what can be accomplished with public key techniques, each transaction amount must be specifically authorized with a piece of paper. Individual transactions can be authorized, as well as periodic payments such as loans and insurance premiums. With Checkfree, the sender must separately authorize each payment, as I understand it. The receiving institution cannot ask for payment. It's a hole in the payments system--an electronic way for individuals to give authorization to take money from their accounts on a per transaction basis. Eric
Date: Sun, 29 May 94 18:40:48 -0700 From: hughes@ah.com (Eric Hughes) If you use the ACH system, you can't pre-authorize sporadic payments for arbitrary amounts. I talked to both Fidelity Checks and Checks-By-Phone, and both of them said that they would accept electronic mail as evidence of authorization. They work as alternatives to credit cards. When a customer calls you up, you tell them that you can accept a check over the phone. They read you the check number, account number, and routing code. You submit that information to them by modem and they print up the checks and overnight them to you. Fidelity Checks charges $200 startup fee plus $2.50 per check. Checks-By-Phone charges $350 startup fee plus $2.00 per check. They both contend that this a standard way to buy things and that customers accept it. Personally, I've *never* had a vendor suggest that they could write a check on my account. -russ <nelson@crynwr.com> ftp.msen.com:pub/vendor/crynwr/crynwr.wav Crynwr Software | Crynwr Software sells packet driver support | ask4 PGP key 11 Grant St. | +1 315 268 1925 (9201 FAX) | Quakers do it in the light Potsdam, NY 13676 | LPF member - ask me about the harm software patents do.
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