12.13.1. "Is physical identity proof needed for on-line clearing?"
- No, not if the cash outlook is taken. Cash is cash. Caveat
emptor.
- The "first to the locker" approach causes the bank not to
particularly care about this, just as a Swiss bank will
allow access to a numbered account by presentation of the
number, and perhaps a key. Identity proof *may* be needed,
depending on the "protocol" they and the customer
established, but it need not be. And the last thing the
bank is worried about is being able to "find and prosecute"
anyone, as there is no way they can be liable for a double
spending incident. The beauties of local clearing! (Which
is what gold coins do, and paper money if we really think
we can pass it on to others.)
12.13.2. "Is digital cash traceable?"
- There are several flavors of "digital cash," ranging from
versions of VISA cards to fully untraceable (Chaumian)
digital cash.
- This comes up a lot, with people in Net newsgroups even
warning others not to use digital cash because of the ease
of traceability. Not so.
- "Not the kind proposed by David Chaum and his colleagues in
the Netherlands. The whole thrust of their research over
the last decade has been the use of cryptographic
techniques to make electronic transactions secure from
fraud while at the same time protecting personal privacy.
They, and others, have developed a number of schemes for
UNTRACEABLE digital cash." [Kevin Van Horn,
talk.politics.crypto, 1994-07-03]
12.13.3. "Is there a danger that people will lose the numbers that
they need to redeem money? That someone could steal the
number and thus steal their money?"
- Sure. There's the danger that I'll lose my bearer bonds, or
forget my Swiss bank account number, or lose my treasure
map to where I buried my money (as Alan Turing supposedly
did in WW II).
- People can take steps to limit risk. More secure computers.
Dongles worn around their necks. Protocols that involve
biometric authentication to their local computer or key
storage PDA, etc. Limits on withdrawals per day, etc.
People can store key numbers with people they trust,
perhaps encrypted with other keys, can leave them with
their lawyers, etc. All sorts of arrangements can be made.
Personal identification is but one of these arrangements.
Often used, but not essential to the underlyng protocol.
Again, the Swiss banks (maybe now the Liechtenstein
anstalts are a better example) don't require physical ID
for all accounts. (More generally, if Charles wants to
create a bank in which deposits are made and then given out
to the first person who sings the right tune, why should we
care? This extreme example is useful in pointing out that
_contractual arrangements_ need not involve governmental or
societal norms about what constitutes proof of identity.)
By Tim May, see README
HTML by Jonathan Rochkind