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Anonymous banking.

Nice Coder Member since: 1/20/2004 From: Lithgow, Australia

Posted - 3/25/2005 12:28:09 AM

This system comes in two parts. The peer to peer network, and the bank (i'll assume theres only one).

Notes are a hash of a set of specs.
For eg. The denomination (is this a 1c note, or a 100$ note?), the serial number, ect.

Now, once you have the hash, you can't modify the attributes so that you change from haivng a 1c note to a $100 note, becuse its computationally infeasable. (it would take too many guesses to find the correct serial number so that the hash still matches).

When buying something, you do the following things:
You, the person that your buying it off, and the bank enter a three way conversation (secured against each of the rest. So you can talk to the seller, the seller can talk to the bank, ect. without each of you overhearing the other channels).

You lock the note (you basically say "Bank, for note #13285794857, do not allow anybody to change it until i give you the number 238572935781932857".

Then you give the notes specs to the seller. (who can then compute the hash, as well as knowing how much it is, ect.)

Now the seller, checks to see if its a good note, by authenticating it with the bank. (now the bank says 'yes its a good note').

Now, if the seller is trying to rip the buyer off by saying a legitimate note is faulty, just to reuse it, then the buyer just sends the unlock message, along with a note change message (explained later), at once. (to stop the seller changing it between messages. Remember: The bank cannot tell the seller from the buyer.)

If the seller isn't trying to do that, then the seller agrees to it.
Once the seller does, the buyer unlocks the note, and the seller asks the bank to change the note, into a new note with the same denomination with a new serial numeber. (these go up incrementally, so this would make it very unlikely that anybody will ever be able to counterfight it).

Now, the seller knows the new note.
The buyer doesn't (so the note that he knows is faulty, because it won't authenticate), and he can't spy on the conversation between the seller and the bank, and the bank has updated its records. (all the bank needs is a big list of currently good notes.).

Now, the buyers/sellers communicate through a peer-peer network, which connects the nodes together, so that no node can ever figure out where a message is coming from.

(see my other thread for some of the deatails of this.)

From,
Nice coder

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Drew_Benton GDNet+ Member since: 7/29/2004 From: Katy, TX, United States

Posted - 3/25/2005 12:45:59 AM

Ok, I am not tryingto shoot you down or anything, I promise

, but this idea just simply would not fly. The problem that I see with this is that there are no records of anything. Since the bank does not know who the buyer or who the seller is - as the DHS would say, terrorists could use this system to free fund each other.

Now the next problem I see with this idea is the fact that we are putting so much faith into an inperfect system. Even though we live in a digital world now, there is always paper records stored.

What about this concept - A buyer pays for a product, but is never given the product. They cannot prove they ever paid for the product with a system like this. Since no node can ever figure out where a message is coming from it would be impossible to trace what happened.

Now I know not all of my logics are correct in respect to your idea, but consider how much more complicated things would get for simple transactions. I mean I could see a systme like this being useful and intresting, just not for banking, there's too much involved.

All of the protocols that would have to be created as well as implementation details just make this really infeasible to implement. Reactions?

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Nice Coder Member since: 1/20/2004 From: Lithgow, Australia

Posted - 3/25/2005 12:52:42 AM

Ok, drew.

Terrorists funding each other wouldn't be a major problem (they still have cash for that).

Ok, the other ones a good point.

If you can trust the bank. (Ie. if you want to be able to be spied on), then you can use pke, and authenticate off that. (ie. Your local store signes up, and gets there keys, each individual person gets there own keys which ties them down).

Maybe make the keys 'individualised'.

So, for eg. The key for 'acme inc', is derived from 'acme inc', using a second key agreed apon by both the bank and the trader.

Good to think that you think its interesting! (so i'm not tallking to myself