peppercorn micropayments via better “lottery tickets”
DESCRIPTION
Peppercorn Micropayments via better “Lottery Tickets”. Ron Rivest (with Silvio Micali) MIT Laboratory for Computer Science Financial Cryptography Conference Rump Session 2002 (See Proceedings RSA 2002). Outline. - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/1.jpg)
Peppercorn Micropayments via better “Lottery Tickets”
Ron Rivest (with Silvio Micali)MIT Laboratory for Computer
ScienceFinancial Cryptography Conference
Rump Session 2002(See Proceedings RSA 2002)
![Page 2: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/2.jpg)
Outline (English law says a peppercorn is smallest
amount that can be paid in a contract) Talk
– Improve lottery tix with two ideas:»Non-interactivity via
recipient signatures»User-fairness via serial numbers
Demo
![Page 3: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/3.jpg)
The need for small payments
“Pay-per-click” purchases on Web:– Music, video, information
Mobile commerce ($20G by 2005)- Location-based info services,
gaming, sodas, parking Infrastructure accounting:
– bandwidth
![Page 4: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/4.jpg)
Payment Framework:Payment System Provider (PSP), Bank
User Alice Merchant BobPayment(s)
Authori-zation Deposit(s)
![Page 5: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/5.jpg)
Dimensions to consider:
Aggregation (global) PSP on-line or off-line ? (off-line) Interactive vs. non-interactive
(non) Computation Cost (cheap) User-fairness (fair) … (many other issues, too)
![Page 6: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/6.jpg)
Aggregation To reduce cost, micropayments should
be aggregated into fewer macropayments.
Possible levels of aggregation:– None: PSP sees every payment– Session-level: aggregate all payments in one
user/merchant session– Global: Payments aggregated across users
and merchants Can be deterministic or statistical.
![Page 7: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/7.jpg)
On-line vs. Off-line On-line PSP authorizes each
payment or session. Off-line PSP not needed to initiate
session or make payment (e.g. pay taxi)
![Page 8: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/8.jpg)
Interactive vs. Non-interactive
Interactive:Payment protocol is two-way :
Non-interactive:Payment protocol is one-way (e.g. anti-spam payment in email):
![Page 9: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/9.jpg)
Computation Cost Digital signatures are still
relatively “expensive” --- but much cheaper than they used to be!
It now seems reasonable to base micropayments on digital signatures. (E.g. Java card in cell phone)
User and merchant are anyways involved with each transaction; digital signatures add only a few milliseconds.
On-line/Off-line signature can also help.
![Page 10: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/10.jpg)
Previous Work: Lottery Tickets
“Electronic Lottery Tickets as Micropayments” – Rivest FC ’97(similar to “Transactions using Bets” proposal by Wheeler ’96)
Payments are probabilistic First schemes to provide
global aggregation: payments aggregated acrossall user/merchant pairs.
![Page 11: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/11.jpg)
“Lottery Tickets” Explained
Assume all payments are for one cent. Merchant gives user y = hash(x) User writes check: “Pay Merchant $1 if
two low-order digits of hash-1(y) are 75.” (Signed by user, with cert from PSP.)
Merchant “wins” $1 with probability 1/100. Expected value ofpayment is 1 cent.
Bank sees only 1 out of every 100 payments.(A plus for user privacy!)
![Page 12: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/12.jpg)
Our “Peppercorn” Proposal
Peppercorn improves lottery ticket scheme, making it:– Non-interactive
(by using merchant signatures)– Fair to user:
user never “overcharged” (by using serial numbers)
![Page 13: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/13.jpg)
Non-interactive
Revised check: “Pay Merchant $1 if two low-order digits of the hash of Merchant’s digital signature on this check are 75.”
Merchant’s deterministic signature scheme unpredictable to user.
Merchant can convince PSP to pay.
![Page 14: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/14.jpg)
Optimization for less Signing
“Pay Merchant $1 if the two low-order digits of the hash of Merchant’s digital signature on the date of this check are 75.”
Merchant only signs once a day.
![Page 15: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/15.jpg)
User Fairness: No “Overcharging”
Concern: unlucky user might pay $1 for his first one-cent payment!
A payment schemeis user-fair if user neverpays more than he would if all payments weredeterministic one-cent checks.
![Page 16: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/16.jpg)
Achieving User-Fairness User must sequence number his
payments: 1, 2, … When merchant turns in winner
with sequence number N, user charged N – (last N seen) cents
User charged three cents for
![Page 17: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/17.jpg)
User-Fairness (continued) Merchant is still paid $1 for each
winning payment. Users severely penalized for using
duplicate sequence numbers.
![Page 18: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/18.jpg)
Conclusion
Peppercorn micropayment scheme– Is highly scalable : bank supports trillions
of micropayments by processing only billions of transactions
– Provides global aggregation– Supports off-line non-interactive
payments– Is user-fair and quite private– Uses digital signatures, but lightly.
![Page 19: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/19.jpg)
(DEMO)
![Page 20: Peppercorn Micropayments via better “Lottery Tickets”](https://reader035.vdocuments.mx/reader035/viewer/2022062304/56812e03550346895d9366ca/html5/thumbnails/20.jpg)
(The End)