How is electronic money (e-money) possible?
Cryptography and digital signatures make it possible
Banks and customers have public-key pairs
They use public keys to encrypt (security) and private keys to sign (identification) blocks of digital data that represent money orders
A bank ÅgsignsÅh the orders using its private key and customers and merchants verify the signed money orders using the bankÅfs public key
Customers sign deposits and withdraws using their private keys and the bank uses their public keys to verify the signed withdraws and deposits
Miller, J. (2002). E-money mini-FAQ (release 2.0). http://www.ex.ac.uk/~RDavies/arian/emoneyfaq.html
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