Towards Multiple-payment Schemes for Digital Money

H. Pagnia and R. Jansen

Darmstadt University of Technology
D-64283 Darmstadt
Germany

Abstract

Recently, many payment schemes for digital money have been proposed. In most of these schemes money can be spent only once and must then immediately be returned to the bank.
In its first part the paper discusses the advantages of schemes which allow the recipient of the money to use it directly for further purchases. We explain why most existing schemes do not support such a payment scheme and make a proposal of how to efficiently overcome this drawback.
The design process of our scheme is shown in detail, starting with a simple scheme and applying additional features in a step-by-step manner. The resulting off-line payment scheme provides anonynimity as well as transferability. Anonymity however is not unconditionally guaranteed but can be revoked by public authorities if necessary. Additionally the scheme can easily be extended to support divisible money, a feature that is particularly important for multiple-payment schemes.

In the second part of the paper, we address the problem of achieving a fair exchange of money against service between the customer and the vendor. Few solutions to this problem have been published and most of them involve a trusted third party which actively supports the exchange. Using such an active component has the disadvantage that - for high transaction rates - the trustee easily constitutes a bottleneck. We present an alternative solution based on a `passive' trustee thereby avoiding the former disadvantage. In the proposed protocol the trustee simply serves as a public blackboard to which vendor and customer can write information concerning the current state of their business. In case of fraud these information can be used as a proof by both parties.