Whoa, now... (was Re: Digital Cash)

[Timothy C. May]

Graham Toal writes:

> By the way, the reason I've never discussed the ecash threads on this
> group is because it was obvious right from the start that double-spending
> makes the schemes unworkable, and that only a central reference authority
> could patch the system to make it work, which (in my seldom humble opinion)
> entirely negates the point of these schemes.

Nope, not "entirely." Anonymity is still preserved, through the
"blinding" operation, even when a clearinghouse approach is used. That
is, the bank can assure itself that it issued the original note, even
though the note presented to it cannot be correlated to the issued
note.

This is the breakthrough Chaum and others achieved. Anonymity (or
untraceablility by Big Brother and Big Mother) is achieved, which is
the major point of digital money. The possible need for online
clearing is not a fatal flaw.

A good place to read about this is the November 1985 "Communnications
of the ACM" journal, in Chaum's cover article "Transaction Systems to
Make Big Brother Obsolete." (Chaum has updated the article since, and
newer versions can be found in various places.)

--Tim May


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