Subject: ecash-info

Message-Id: <2fa75688.herman@DigiCash.nl>

To: rballard@cnj.digex.net

From: "DigiCash Information"

Date: Wed, 03 May 1995 12:10:15 DST

Subject: ecash-info

From: "DigiCash Information"

Date: Wed, 03 May 1995 12:10:15 DST

How the Web Was Won Subject: ecash-info

From: "DigiCash Information"

Date: Wed, 03 May 1995 12:10:15 DST

Status: RO
X-Status: A

Thank you for your interest in our electronic money technology.
Because of all the reactions we have received, we have made available
some background information on our Web server

       http://www.digicash.com/
                            
On this server you will not only find the original press-release
(May'94) and an ecash product description, that are also included 
in this message, but also the referenced Scientific American article 
and some general DigiCash information. Documents are also available 
via anonymous ftp from this address, in the /pub/www directory.

Our ecash trial is now in full swing on the Internet, and we will
keep you informed of the developments by email. If you are interested
in applying for participation in the trial, please complete the
registration form that you will find in the ecash section of the
web-server mentioned above. Please note that some of the information
on the Web server is currently data protected and will become
available to the people participating in the trial.

If you don't want to participate in the trial, but do want to be kept
informed of the latest developments, please let us know more about the
nature of your interest, and at least which of the following
categories fits best:

   (a) potential acceptor of electronic cash for services offered
       over the network, 

   (b) potential provider of electronic cash service itself to other
       network service providers, 

   (c) member of the press, 

   (d) interested in the technology for other purposes, or

   (e) interested in licensing the technology.

We are looking forward to finding a way that we can work together.

Very kind regards,


David Chaum
Managing Director



**********************
DIGICASH PRESS RELEASE
**********************

World's first electronic cash payment over computer networks.
============================================================
							    
Payment from any personal computer to any other workstation, over
email or Internet, has been demonstrated for the first time, using
electronic cash technology. "You can pay for access to a database, buy
software or a newsletter by email, play a computer game over the net,
receive $5 owed you by a friend, or just order a pizza. The 
possibilities are truly unlimited" according to David Chaum, Managing
Director of DigiCash TM, who announced and demonstrated the product
during his keynote address at the first conference on the World Wide
Web, in Geneva this week.

Electronic cash has the privacy of paper cash, while achieving the
high security required for electronic network environments
exclusively through innovations in public key cryptography. "It's the
first software only solution. In the past we've pioneered such cash
for chip cards and electronic wallets, always with a tamper-resistant
chip for storing the value--now all you have to do is download the
software and you're up and running" continues Dr. Chaum.

The product works with Microsoft(R) Windows TM, Macintosh TM, and
most UNIX TM platforms. It was shown integrated with Mosaic, the
most popular software for people accessing databases, email, or other
services on the Internet and World Wide Web. The graphic user
interface allows intuitive "dragging and dropping" of icons
representing stacks of coins, receipts, record books, etc.

The company will be supplying the technology through other firms who
will release the products, under various cooperation and trial
programs. The user software, which allows both paying and receiving
payment, will be distributed free of charge.

The product was developed by DigiCash TM Corporation's wholly owned
Dutch subsidiary, DigiCash TM BV. It is related to the firm's earlier
released product for road pricing, which has been licensed to Amtech TM
Corporation, of Dallas, Texas, worldwide leader in automatic road
toll collection. This system allows privacy protected payments for
road use at full highway speed from a smart card reader affixed to the
inside of a vehicle. Also related is the approach of the EU supported
CAFE project, of which Dr. Chaum is Chairman, which uses
tamper-resistant chips inserted into electronic wallets.

The underlying 'blind signature' technology was described in the
article "Achieving Electronic Privacy," by David Chaum, Scientific
American, August 1992.



*************************
ECASH PRODUCT DESCRIPTION
*************************

Electronic Cash: What it is and What it Means
=============================================

The age of electronic commerce is about to commence. World wide
computer  networks like the Internet, are no longer the domain soley
of computer techies and academics. Due to developments like the World
Wide Web, more people than ever are able to participate in this new
world, which has been aptly christened: 'Cyberspace'.

In defining Cyberspace, an important decision has to be made in the
area of  electronic commerce. As all communication becomes
increasingly automated choices have to be made regarding what kind of
electronic world we want to build for ourselves. Several possible
scenarios come to mind. One is a world in which it becomes very easy
for someone to keep track of everyones' spending habits (and thus
behaviour), since all data is already handled by automated systems.
Another scenario may be equivalent, or even an improvement, on our
world today; a world where personal data is kept private and
safeguarded by the individual.

Here we examine the options and the risks of these differing scenarios
by  discussing several methods of payment currently available on the
Internet other networks.


Payments external to the net
----------------------------

The first payments for services on the Internet were conventional
ones.  Subscribers transferred monthly fees for a service from their
bank-account into the accounts of the selling party. These payments
are expensive and take a long time to process, especially when the
payment is made from one country to another. Perhaps this is
sufficient for long lasting relationships, or frequent users of a
certain database. But the one-time user who wants small amounts of
data from many sources or a fast answer to a question is not well
served by this payment mechanism.


Payments using credit card details
----------------------------------

In order to avoid bank-transactions, credit card payments on the
Internet  became the next possibility. If you want to use a commercial
service, you simply send your credit card details to the service
provider involved and the credit card organization will handle this
payment like any other. However, there are some risks to be
considered. First of all, your credit card details are transmitted
over the Internet. The customer doesnt know exactly how these details
will reach the receiver. His message can pass through via multiple
systems on its way to its final destination and maybe someone,
somewhere along the way, is scanning these messages for credit card
details; details which could be used for criminal purposes, making
this system unsecure.


Payments using encrypted credit card details
--------------------------------------------

It would make sense to encrypt your credit card details before sending
them  out, but even then there are certain factors to consider. One
would be the cost of a credit card transaction itself. Such cost would
prohibit low value payments by adding costs to the transaction
amounting to more than the payment itself.


Payments using third parties
----------------------------

One solution is the introduction of a third party: a company that
collects and  approves payments from one client to another. After a
certain period of time, one credit card transaction for the total
accumulated amount is completed.

There are, however, other factors to consider when using third party
(or credit  card) payments. For one, there is always a possibility
that a payment is refused because the spending limit has been reached.
For another, all payment details of a person are gathered in one
centralized system: where they buy, when they buy and sometimes what
they buy is stored. The collection of this data tells much about the
person involved and this can conflict with the individual's right to
privacy.


Payments using ecash
--------------------

Fortunately, in real life people always have the right to choose. If
desired they  can pay with cash, anonymously. If we want to introduce
this right on the Internet we need digital cash: ecash.

Ecash is the digital equivalent of cash. You can withdraw digital
coins from  your Internet bank account and store them on your hard
disk. Whenever you want to make a payment, you use these coins. The
payment is fast and anonymous, and the payer can always prove that he
made a certain payment. In some environments (like offices) there may
be a need for additional security to prevent other users from
accessing your ecash. Smart cards can be used to store your ecash
allowing you to carry your ecash with you.


The CyberBucks experiment
-------------------------

Ecash is currently being tested on the Internet, prior to releasing
the fully  operational service. About 4000 people from almost 50
countries applied to participate in this test (as of 1 January 1995).

The currency used in this trial is a virtual one, CyberBucks, which
currently  have no guaranteed exchange value. Only  1,000,000
CyberBucks will be issued and each participant in the trial so far has
received  100 CyberBucks when opening their account.


About ecash
-----------

In order to start using ecash you will of course need a network
connection. The  ecash software for clients is available for MS
Windows, Macintosh and various UNIX platforms. With this software you
can both send and receive payments. An automated shop can easily be
made from the client software.

When you run the ecash software for the first time it helps you open
an account  at the ecash bank on the Internet. A dialog box pops up
asking you for your name and other details. After giving this
information, a simple click on a button is enough to open your
account.

The ecash software appears on your screen as a small box showing the
amount  of money stored on your hard disk, with a five button tool bar
where each button is a mini-icon for the basic function. One button is
for transactions with your bank and another for transactions with
other ecash users. The third button shows you your payment history for
both payments made and received. The fourth and fifth button give you
a current status report and a personal settings dialog box.

Making a withdrawal from your ecash bank account can be done simply by
clicking on the first button in the dialog box that appears and typing
in the amount requested . If your balance is sufficient, digital coins
will be sent to your PC and stored on your local hard disk. Making
deposits or payments is just as easy. When youre using the World Wide
Web, your ecash-software can be active in the background. As soon as a
payment is required, a dialog box automatically pops up and you will
be asked to confirm the requested payment. A click on the yes or the
no button is enough to make or refuse the requested payment.
Payments are made using the digital coins from your hard disk.

Starting an ecash accepting shop on the World Wide Web is almost as
easy as  installing the client software. If you have a Web server
running and you have installed the ecash client software, you can use
already made script files to start your shop and start asking ecash
for any data or access you wish to sell. The ecash that is paid to
your shop goes directly to your ecash account at the digital bank.


Principles of ecash security
----------------------------

When executed for the first time, the ecash software automatically
generates a  pair of RSA encryption keys. Every person or entity using
ecash has a unique pair of keys. RSA (public key) cryptography is the
basis of the ecash security. The DigiCash blinding technology
introduces the privacy aspects.

It would be too detailed to describe all the aspects of public key
cryptography  here, but the following properties allow understanding
the value of this technology: - conventional cryptographic systems use
one and the same key for both encoding and decoding a message. The RSA
system uses a pair of keys (two); - a message that has been encoded
with one key, can only be decoded with the other key of that pair, and
vice versa; - from one key, the related key cant be computed.

As mentioned above, every party working with ecash has a unique set of
keys.  One key will be kept secret (his secret key) and the other key
will be made public (his public key). If a party wants to authenticate
a message, he will encrypt it with his secret key: everyone can verify
that he signed this message by decoding it with his public key. If a
party wants to send a confidential message, he will encrypt the
message with the public key of the receiver: the receiver; is the only
one who will be able to decode the message.


How ecash works inside
----------------------

Every person using ecash has an ecash account at a digital bank on the
Internet.  Using that account people can withdraw and deposit ecash.

When an ecash withdrawal is made, the PC of the ecash user calculates
how  many digital coins of what denominations are needed to withdraw
the requested amount. Next random serial numbers for those coins will
be generated and the blinding factor will be included. The result of
these calculations will be sent to the digital bank.

The bank will encode the blinded numbers with its secret key (digital 
signature), and at the same time debit the account of the client for
the same  amount. The authenticated coins are sent back to the user
and finally the user will take out the blinding factor that he
introduced earlier. The serial numbers plus their signatures are now
digital coins; their value is guaranteed by the bank.

The coins can be stored locally on the PC of the user. As soon as he
wants to  make a payment, his PC collects the coins needed to reach
the requested total value. These coins are sent to the receiver, then
the receiver sends them directly to the digital bank. The bank
verifies the validity of these coins and that they have not been spent
before. The account of the receiveris credited. Every coin is used
only once. Another withdrawal is needed if the receiver wishes to have
new coins to spend.


For more information
--------------------

Information about ecash and the ecash trial is available on the World
Wide Web  at: http://www.digicash.com/ecash/ecash-home.html



Further Reading:
---------------

"Achieving Electronic Privacy", David Chaum in Scientific American,
August  1992, pages 96-101.

"Security without Identification: Transaction Systems to Make Big
Brother  Obsolete", David Chaum in Communications of the ACM, Vol. 28,
No. 10, pages 1030-1044: October 1985.

"Privacy Protected Payments: Unconditional Payer and/or Payee
Untraceability", David Chaum in Smart Card 2000: The Future of IC
Cards. Edited by David Chaum and Ingrid Schaumuller-Bichl.
North-Holland, 1989.


(DigiCash currently has a non-exclusive licensing policy. DigiCash,
ecash and  CyberBucks are trademarks.)



Contact us at:
-------------

DigiCash bv
Kruislaan 419
1098 VA  Amsterdam
The Netherlands

tel: + 31 20 665 2611
fax: + 31 20 668 5486

email: info@DigiCash.nl
http://www.DigiCash.com/


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