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Cyphernomicon 2.12

MFAQ--Most Frequently Asked Questions:
Digital Cash

   2.12.1. "What is digital money?"
   2.12.2. "What are the main uses of strong crypto for business and
            economic transactions?"
           - Secure communications. Ensuring privacy of transaction
              records (avoiding eavesdroppes, competitors)
           - Digital signatures on contracts (will someday be standard)
           - Digital cash.
           - Reputations.
           - Data Havens. That bypass local laws about what can be
              stored and what can't (e.g., silly rules on how far back
              credit records can go).
   2.12.3. "What are smart cards and how are they used?"
           + Most smart cards as they now exist are very far from being
              the anonymous digital cash of primary interest to us. In
              fact, most of them are just glorified credit cards.
             - with no gain to consumers, since consumes typically don't
                pay for losses by fraud
             - (so to entice consumes, will they offer inducements?)
           - Can be either small computers, typically credit-card-sized,
              or  just cards that control access via local computers.
           + Tamper-resistant modules, e.g., if tampered with, they
              destroy the important data or at the least give evidence of
              having been tampered with.
             + Security of manufacturing
               - some variant of  "cut-and-choose" inspection of
           + Uses of smart cards
             - conventional credit card uses
             - bill payment
             - postage
             - bridge and road tolls
             - payments for items received electronically (not
                necessarily anonymously)

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