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Micropayments Revisited

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Venders try to overcharge or cheat the broker. Collusion between two ... to cheat the system. Cost of reversing the function can outweigh the benefit. Cons ... – PowerPoint PPT presentation

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Title: Micropayments Revisited


1
Micropayments Revisited
  • Written by
  • Silvio Micali and Ronald Rivest
  • Presented by
  • Charles Song and Michael Wasser

2
Digital Payments
  • Involves Buyers, Merchants, and Brokers
  • Simplest form is electronic checks
  • Usually involves manual entry/signing
  • Some transactions are too small
  • Sum of micropayments may not equal a macropayment

3
Micropayment Goals
  • Make payments of variable size with little user
    intervention
  • Aggregate small transactions into larger ones
  • Simple yet secure
  • All parties incur low transaction costs and
  • Buyer No user intervention in process with no
    risk
  • Merchant Low expenses (low transaction cost)
  • Bank Verifiable transactions

4
Common Deviations
  • Buyers make fake payments or underpay
  • Venders try to overcharge or cheat the broker
  • Collusion between two parties against the third

5
PayWord
  • Buyer creates H-chain
  • x0, x1, x2, ..., xn xi H(xi1) for i 0, 1,
    ... n
  • where xn is random
  • Sends x0 to merchant
  • Buyer makes payments to merchant (xi, i)
  • Merchant decides when to send bank (xi, i) and x0
  • Bank verify payment amount by running H() function

6
PayWord Analysis
  • Pros
  • If H is good, hard for parties to cheat the
    system
  • Cost of reversing the function can outweigh the
    benefit
  • Cons
  • Merchant cannot combine payments from multiple
    buyers, deposit might cost more than payment
    value
  • Every unit of payment requires calculation

7
Rivest's Lottery
  • Merchant creates H-chain and gives the buyer w0
  • Buyer creates H-chain and gives the merchant x0
  • Buyer makes payments to merchant (xi, i) and
    calculates (xi mod 1/s)
  • Merchant gives (wi, i) to buyer and calculates
    (wi mod 1/s)

8
Rivest's Lottery
  • if (xi mod 1/s) (wi mod 1/s) then payment is
    worth 1/s payment unit
  • Probability of (xi mod 1/s) (wi mod 1/s) is
    exactly s
  • On average buyer pays and merchant receives the
    correct amount

9
Rivest's Lottery Anaylsis
  • Pros
  • Lowers processing cost due to less payable
    transactions
  • Cons
  • Buyer and merchant must interact to determine
    payability
  • Buyer has the risk of over paying in short term,
    psychological burdens for buyer

10
MR1
  • T - transaction contains merchant, buyer, bank,
    merchandise, transaction time and value.
  • F - public function that outputs values between 0
    and 1
  • C - digital check

11
MR1
  • Buyer sends C to merchant, C SIGu(T)
  • Merchant calculates F(SIGm(C))
  • If F(SIGm(C)) lt s then C is payable, merchant
    sends bank C and SIGm(C)
  • Bank can send SIGm(C) to buyer for verification
  • 1/s payment unit is made

12
MR1 Analysis
  • Pros
  • Two-way interaction not required for transactions
  • Cons
  • Buyer still suffer from psychological burdens

13
MR2
  • SN - Serial number starting from 1 and
    incremented sequentially
  • MaxSN - maximum serial number processed by the
    bank so far

14
MR2
  • Buyer sends C to merchant, C SIGu(T), along
    with SN and time
  • Merchant calculates F(SIGm(C))
  • If F(SIGm(C)) lt s then C is payable, merchant
    sends bank C and SIGm(C) along with SN and time
    from buyer
  • Bank makes 1/s payment unit to merchant
  • Bank charge buyer SN MaxSN, set MaxSN SN

15
MR2 Anaylsis
  • Pros
  • Two-way interaction not required for transactions
  • User has no risk of over paying
  • Cons
  • Bank takes on all the risk of under payment
  • Punishment system might be hard to enforce
  • Honest user might be blamed for wrong-doing

16
MR3
  • t' and t - time of M's last and current deposit

17
MR3
  • Buyer sends C to merchant, C SIGu(T), along
    with SN
  • Merchant groups all Cs between t' and t into
    (L1...Ln), values are (V1...Vn), total value V
  • Merchant computes Ci H(Li, Vi) then sends
    C1,...,Cn to the bank
  • SIGm(t, n, V, H(L1,V1),...,H(Ln,Vn))

18
MR3
  • Bank selects k indices, i1, i2,...ik, and sends
    them to merchant
  • Merchant de-committing Ci1,...,Cik
  • Bank credits merchant account with V and debits
    the buyers in Li1,...,Lik according to the Sns
  • Selected buyers pay everything owed since last
    time they are selected

19
MR3 Analysis
  • Pros
  • Two-way interaction not required for transactions
  • User has no risk of over paying
  • Bank determines which checks are payble
  • Cons
  • Bank takes on all the risk of under payment
  • Punishment system might be hard to enforce
  • Honest user might be blamed for wrong-doing
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