For digital currency on a personal electronic device (PED)
to find widespread worldwide acceptance it must meet, at a minimum, the
following requirements:
- Invulnerability to theft.
- Anonymous use (with allowances for law enforcement)
- Easy and real time conversion to non-digital currency
- Legal protection
Invulnerability to theft may seem to be unattainable,
however if sufficient business processes exist, theft can become so hazardous
to the perpetrators, that it simply will not be worth the attempt. Simple
features such as user authentication function accepting two personal
identification numbers, one for regular access to the stored value, and one that
broadcasts a robbery is in progress. Payment applications revoke the user
signature if the payee does not receive a transaction within a configurable period.
Insurers restore funds (OK insurers will still be vulnerable to theft, but they
are insurers, they will make more than they lose or will not be in the
business) in a rare case of a successful attack (an attack is only successful
if the attacker converts the digital funds to regular currency). Regular
synchronization of the payment log with the insurer will limit friendly fraud
and losses due to damaged or lost PED.
The possibility of anonymous use will attract the paying
public away from card technology and will become a great draw for widespread
acceptance of digital currency. All transferred values will require the
signature of the payee, but the insurer and/or the FI that issued the value to
the PED only need to know the real identity of the signer.
A typical payment application might give users a menu shown
in Diagram 28.
Shoulder surfers might see the log displayed in Diagram 29
or exactly what the user intends.
Diagram 29 Example Payment Log
Secure, fast, and cheap means widespread acceptance by PED
users. Unlimited deposited funds for unlimited time will attract the first
issuers followed rapidly by their competitors. It cannot happen fast enough
what with the flat footed response by payment industry to data scraping attacks
and the loss of revenue by capped interchange fees. Will the last retailer
using a point of sale, please turn out the lights.
Next Blog: A
timed embezzlement attack
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