WWW: Beyond the Basics

Chapter 8. Commerce

8.2.3. DigiCash's ecash

8.2.3.1. Summary of DigiCash's ecash

DigiCash (DigiCash, "DigiCash ..."), founded in 1990 by Dr. David Chaum, has been in the electronic payment arena from the start. Their first product was a road toll system. Since that time, they have been involved with smartcard technology, modular encryption hardware, and cross-border electronic wallet systems. DigiCash's approach to secure payment systems is based on patented advances in public key cryptography.

Where the previous systems have relied on communicating transactions to a financial institution, DigiCash takes the different approach of creating an electronic, encrypted form of cash called 'ecash'. This ecash has many properties of physical cash, including anonymity. Additionally, person-to-person payments can be easily made with ecash, whereas other systems have distinct roles of buyer and vendor.

Nearly 30,000 people participated in a trial of ecash which started in October, 1994 (DigiCash, "The ecash trial"). This trial used 'cyberbucks', which could not be exchanged for any real currency. This trial has since been closed to further applicants, and ecash has moved on to using real currency. Four banks are currently issuing ecash in five different currencies.

8.2.3.2. An ecash transaction

A user obtains ecash from an issuing bank -- typically the bank debits the user's account and returns to the user the correct amount of ecash. The ecash is an encrypted form that actually has value, and is stored on the user's machine. Software acquired from DigiCash allows transactions to be made to any other entity that accepts ecash. DigiCash provides a detailed explanation of how their system works and how to use ecash software(DigiCash, "An introduction ...").

[PREV][NEXT][UP][HOME][VT CS]

Copyright © 1996 Patrick N. Brooks
All Rights Reserved

Patrick N. Brooks <pbrooks@vt.edu>