What Is Digital Cash?

Digital cash, also known as "electronic cash", is a digitally signed encrypted number of cash that is digitally signed by a bank. It is a digital currency based on the blind signature technology developed by David Chaum. Small real-time payments.

Digital cash

Digital cash has the following classification methods according to different perspectives:

l According to the carrier of its transactions, it can be divided into account-based digital cash systems and voucher-based digital cash systems.

l According to the consumption of digital cash, whether the merchant needs online verification with the bank can be divided into online digital cash system and offline digital cash system.

l Dividing digital cash into divisible digital cash and indivisible digital cash multiple times based on whether a digital cash can be legally paid.

The prospect of digital cash is obviously very tempting, but there are always some difficulties in both technology and practical applications, making it impossible to popularize it in a large area in a short time.

The payment problem has always been one of the main obstacles to the rapid development of e-commerce. The emergence of digital cash has undoubtedly opened up a new way to solve the payment problem. Digital cash has the characteristics of being more flexible and more effective than other electronic payment methods. Protecting customer privacy is all that is needed for e-commerce.

Due to its own characteristics, e-commerce transactions must be effective, confidential, complete, reliable and unreliable, and can be identified and censored. These factors must be considered if digital cash is to become an important part of it.

To sum up, the solution of digital cash should be as follows: [3]

l Withdrawal agreement: Users withdraw digital cash from their bank account. In order to ensure that the user obtains legal digital cash with a bank signature under the premise of anonymity, the user will interact with the bank to implement a blind signature agreement. At the same time, the bank must be sure that the digital cash contains the necessary user identity. The general withdrawal agreement is divided into two sub-agreements: account opening agreement and withdrawal agreement.

l Payment agreement: The user uses digital cash to purchase goods from the store. Generally, it should also be divided into two sub-agreements: verification of digital cash signature (used to confirm whether digital cash is legal) and knowledge disclosure agreement (the buyer will disclose some of his identity to the seller Information to prevent buyers from abusing electronic cash).

l Deposit agreement: Users and merchants deposit digital cash into their bank accounts. In this step, the bank will check whether the deposited digital cash is used legally. If illegal use is found, the bank will use the reuse detection protocol to track the identity of the illegal user and punish them.

For example, Digicash, a well-known e-commerce protocol, is an anonymous digital cash protocol. The so-called anonymity means that consumers will not reveal their identity during consumption. For example, in daily life, although cash transactions have numbers, they are generally not recorded in transactions. Its protocol steps are as follows:

1. The consumer withdraws money from the bank and he receives an encrypted digital coin (Token), which can be used as money;

2. Consumers encrypt the token so that it can still be checked for validity by the merchant, but cannot track the identity of the consumer;

3. Consumers can use the token to purchase or purchase services in a shopping mall. The consumer further uses a password to transform the token to include the identity of the merchant;

4. The merchant checks the token to confirm that it has not received it before;

5. The merchant delivers to the consumer;

6. The merchant sends the electronic token to the bank;

7. The bank verifies the uniqueness of the Token, and the identity of the consumer remains confidential until this time. Unless the bank finds out that the token has been reused by the consumer, the identity of the consumer will still be exposed, and the consumer's fraud will also be exposed

The Digicash protocol is obviously feasible in e-commerce, and it is also applied, but it still has its own shortcomings. For example, if a consumer sends a token to a merchant after buying something, the consumer cannot determine whether the merchant has received the electronic token. At this time, if the consumer does nothing, then if the merchant does not receive his Token, the consumer naturally cannot receive the required goods, which is undoubtedly a loss for the consumer; if the consumer uses this Token Other merchants are used, which apparently failed when the bank checked the uniqueness, and may still be charged with fraudulent use of digital cash.

The Digicash protocol is flawed, and the practical application of digital cash also faces various technical and legal difficulties, but it does not mean that digital cash has no future or is just wishful thinking of research scholars. On the contrary, with the continuous development of technology today and the thirst for mature development of e-commerce in the real world, digital cash will definitely be applied in the field of e-commerce on a large scale in the near future.