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4.2 Obtain electronic cash from the
merchant
When a customer has electronic cash from the bank
and s/he wishes to purchase an item from a merchant,
s/he needs to obtain electronic cash from the specific
merchant (VendorScrip). If the value of the owned
BrokerScrip is bigger or equal to the one of the de-
sirable VendorScrip, this transaction step is initiated
(Figure 8).
Note, that the requested VendorScrip can be used
for payments only to this specific merchant. The bro-
ker beyond the verification of the scrip, serves as an
observer of the transaction who records the details of
it.
4.3 Buy Item
If the customer wishes to purchase an item from a spe-
cific merchant and has the appropriate VendorScrip,
this scrip can be sent to the merchant (Figure 7). The
merchant checks and validates the VendorScrip, s/he
reduces its value and sends a new VendorScrip (the
change) to the customer. This interaction means that
the customer has paid the merchant. In this transac-
tion step both the customer and the merchant inform
the broker that a transaction is about to take place or
has taken place, respectively.
5 DESCRIPTION OF THE
PROPOSED PAYMENT SYSTEM
The proposed payment system is as an on-line sys-
tem; the central authority (broker) must be contacted
during the “Obtain BrokerScrip” and “Obtain Ven-
dorScrip” transaction steps, in order to “bless” value
transfers and in the “Buy item” transaction step in or-
der to record the transaction details. Even though the
online systems are more demanding in terms of com-
munication complexity, than the offline systems, they
are considered more secure than the last ones. Addi-
tionally, the proposed system can be characterized as
direct-payment system, because it requires an interac-
tion between payer and payee.
This system is proper for micro-payments as well
as for macro-payments. The desirable usage sce-
nario which fully exploits the benefits of the pro-
posed system is the one where the customer obtains,
using macro-payment, BrokerScrip and VendorScrip
and then pays for the items using micro-payments. In
this scenario the interaction with the broker is min-
imized and even more his/her role is reduced to the
one of an external observer (less computation power
is needed, because s/he has just to verify the digital
signatures of the messages sent by the customer and
the merchant, and then record to a file the details of
the transaction).
Implemented on the JXTA (the term “JXTA” is
short for juxtapose, as in side by side. It is recogni-
tion that P2P is juxtaposed to client-server or Web-
based computing, which is today’s traditional dis-
tributed computing model) platform, the proposed
system does not require any special hardware and it
can be implemented in any platform.
Further, it offers some kind of divisibility by allow-
ing users to pay small valued products using high val-
ued scrip and returning the change as new scrip.
Regarding the role inversion the proposed system
has interchangeable roles; it allows users to assume
different roles (a user can act both as a merchant and
a customer), when convenient. However, it does not
allow users to become the bank.
In terms of security, the proposed system ensures
user’s privacy by allowing anonymous purchases, se-
curing transfers and protecting critical information.
Furthermore, it provides the means to detect unautho-
rized data modification using an auditing mechanism
so that errors or misuse can be detected.
6 SECURITY REQUIREMENTS
AND SECURITY ANALYSIS OF
THE SYSTEM
Internet is a heterogeneous network, without single
ownership of the network resources and functions.
In particular, one cannot exclude the possibility that
messages between the legitimate parties would pass
through a maliciously controlled computer. Further,
the routing mechanisms in Internet are not designed
to protect against malicious attacks. Therefore nei-
ther confidentiality nor authentication for messages
sent over the Internet can be assumed, unless proper
cryptographic mechanisms are employed.
Additionally, one must be concerned about the
trustworthiness of the merchants providing Internet
service. The kind of business that is expected in the
Internet includes the so-called cottage industry-small
merchants. It is very easy for an adversary to set up
a shop and put up a fake electronic storefront in order
to get customers’ secrets (e.g. (Wallich, 1999)). This
implies that the customers’ bank account numbers or
PINs should travel from customer to broker without
being revealed to the merchant.
Finally, in a payment system based on electronic
cash, customers should be considered trustworthy.
Customers’ attacks on the proposed system are lim-
ited to scrip attacks. These attacks are: double-
spending, faulty scrip attack and scrip forgery. Dou-
ble spending involves spending scrip more than once,
A NOVEL PEER-TO-PEER PAYMENT SYSTEM
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