major edits to e-Krona report

1 files changed, 231 insertions, 121 deletions

diff --git a/ekrona/e-krona.tex b/ekrona/e-krona.tex
index 37d0f1a..331da23 100644
--- a/ekrona/e-krona.tex
+++ b/ekrona/e-krona.tex
@@ -7,6 +7,7 @@
 % \usepackage{verbatim}
 \usepackage[utf8]{inputenc}
 \usepackage{graphicx}
+\usepackage[a4paper,left=25mm,right=25mm, top=25mm, bottom=25mm]{geometry}
 
 \def\UoL{University of Luxembourg}
 
@@ -14,8 +15,9 @@
 \pagestyle{headings}
 \thispagestyle{empty}
 
+
 \begin{center}
-{\large Taler for eKrona}
+{\huge Taler for e-Krona}
 
 \medskip
 
@@ -32,148 +34,256 @@
 
 \section*{Introduction}
 
-Taler Systems is developing an online payment system called Taler, that could easily fit the requirements of the e-krona project. 
+Taler Systems is developing an online payment system called Taler,
+that could easily fit the requirements of the e-Krona project.
 
-Taler is an open source system based on a wallet and a central exchange. It provides instant one-click payments, can offer privacy-by-design and assures receiver transparency for tax purposes. It is fast and cheap, and can hence also cover micro-payments economically (payments of the order of 1 cents). 
+Taler is an open source system based on a consumer wallet, merchant
+backend and a central exchange for payment processing. It provides
+instant one-click payments, implements privacy-by-design and assures
+receiver transparency for tax purposes using modern cryptography.  It
+is fast and efficient, and can hence also cover micro-payments
+(payments of 1 cent) economically.
 
 The USPs of Taler are:
 
 \begin{itemize}
 \item All operations provide cryptographically secured, with mathematical
       proofs for courts and auditors
-\item Customer payments are privacy preserving, like cash if desired
+\item Customer payments are privacy-preserving, like cash
 \item Merchants are identifiable in each payment they receive
 \item Payments are in existing currencies
-\item Payment fraud is eliminated, short of catastrophic failures in cryptographic primitives
-\item Linear scalability
+\item Payment fraud is eliminated, short of catastrophic failure in cryptographic primitives
+\item Linear scalability ensures Taler handles transaction volumes of widely used systems
 \item Suitable for micro-payments due to very low transaction costs
-\item Ease of use (one-click, instant)
+\item Ease of use (one-click, instant, no authentication during payment)
 \item Open standard protocol without patents, with free reference implementation
 \end{itemize}
 
-Taler is intended to run with the following architectural elements. 
+The Taler architecture includes a register-based system of bank accounts
+for customers and merchants with an escrow-account for the exchange.  The
+exchange signs electronic coins into existence, customers use them to sign
+contracts and merchants deposit them in return for a credit to the register.
+The exchange collects cryptographic proofs that it operates correctly, which
+are then checked by an auditor (auditor not shown):
 
+\begin{minipage}{13cm}
 \includegraphics[width=\textwidth]{taler-arch-full.pdf}
+\end{minipage}
+\begin{minipage}{3cm}
+  {\Huge \}} register-based
+\vspace{3cm}
+  
+{\Huge \}} value-based 
+\end{minipage}
+
+
+\section*{What would a solution for a register-based e-Krona look like?}
+
+Taler's focus is on a cryptographic protocol for a value-based
+transaction system.  However, Taler requires integration with
+some register-based accounting system, equivalent to traditional
+bank accounts.  For this, it would be possible to use a permissioned
+block chain.  Taler aggregates many small transactions from different
+customers to the same merchant, thereby reducing the transaction
+rate in the register-based solution.
+
+\section*{What would a solution for a value-based e-Krona look like?}
+
+Taler issues electronic coins based on deposits into an escrow
+account.  Citizens could use their wallets to withdraw e-Krona
+from their traditional bank accounts, or they could be provided
+e-Krona directly (for example via social security) if they lack
+a bank account.  Electronic coins are blindly signed
+by the issuing exchange, which is obliged to exchange e-Krona
+back into Krona when they are deposited by merchants.  An auditor
+supervises the operation of the exchange.
+
+Our vision is thus very close to the electronic cash system
+``DigiCash'' proposed by David Chaum in the 1990s, except that
+Taler's design and implementation supports key features such
+as giving change, providing refunds, securely handling aborts
+and various other practical issues previous technical solutions
+lacked.
+
+\section*{What is your vision for an e-Krona?}
+% Are there other possible solutions than register-based and value-based that you consider to be more appropriate?}
+
+We imagine a realistic e-Krona solution based on the Taler system to
+be effectively a hybrid solution, with a register-based component and
+a value based component, in order to fulfill the maximum requirements
+outlined in ``The Riksbank’s e-Krona project'' report.
+
+The e-Krona Taler wallet can exist on smartphones, in browsers, on
+smartcards or secure USB sticks. It is filled via wire-transfer to the
+Taler exchange's escrow account, where the subject identifies the
+Taler wallet eligible to withdraw the e-Krona.  Note that regulators
+could limit the amount an entity is entitled to exchange from Krona
+into e-Krona.  When withdrawing electronic coins, they are blindly
+signed by the Taler exchange and stored in the consumer's wallet,
+which is value-based.  The consumer can then spend its coins at
+merchants using cryptographic signatures over electronic contracts.
+Merchants must immediately deposit the coins at the exchange, which
+performs an online check for double-spending.  The exchange will then
+credit the merchant's register-based accounts.
+
+Thus, the Taler system combines value-based and register-based
+accounting, providing anti-money laundering capabilities by making
+income transparent, identifying the users of the system (upon
+withdrawal and deposit), but also providing privacy for citizens by
+not requiring identification of the buyer for ordinary transactions.
+Thus, Taler is a hybrid system combining the advantages of value-based
+and register-based solutions.
+
+Specifically, Taler addresses the following requirements outlined in
+the report:
+
+\begin{description}
+\item[Specified in Swedish Krona]
+  Taler is designed to work for all currencies for which
+  a register-based accounting system exists.
+\item[Payment size]
+  Taler is designed to handle micropayments as well as arbitrarily large payments between consumers, companies and authorities.
+  Regulation may impose limits on withdrawals and maximum amounts transacted.
+\item[Direct claim on Riksbank]
+  The Taler design involves the exchange owning an escrow account
+  (for example, with the Riksbank) to keep the funds to back the issued electronic coins.
+  The contractual obligations of the system are supposed to entitle the holder of
+  e-Krona to exchange them anytime into other representations of Krona.
+\item[Accessible in real-time]
+  Customers and merchants always have access to their full account
+  histories and their balances on their local computer.  Backups and
+  cross-device synchronization will also be supported.
+\item[Payments in real-time]
+  Payments typically clear in one network RTT.  
+  The system is designed for 24/7 operations.
+\item[Offline payments]
+  For Taler transactions, either the payer or the merchant must be online and able to
+  communicate with the exchange.  Otherwise the merchant cannot be sure that the payer
+  did not double-spend and risks being defrauded.
+\item[Anonymous payments]
+  Taler is designed for payers to remain anonymous when buying goods, unless regulation
+  requires disclosure (i.e. for particular sensitive purchases).
+  However, the merchant is never anonymous.
+\item[e-Krona account]
+  A register-based account is required for merchants to receive transactions.
+  The exchange also must have an escrow account.
+\item[Riksbank functions]
+  The Riksbank would primarily hold the escrow account.  It could also either
+  (1) run the operations of the exchange and guarantee the exchange of e-Krona
+  in Swedish Krona directly, or (2) else audit privately operated exchanges
+  similar to its regulatory oversight of conventional banks and payment processors.
+\item[No bank account necessary]
+  Taler can enable distribution of funds (i.e. from social security) directly to
+  wallets.  Thus, citizens having a Taler wallet could be given remittances without
+  the need for a bank account.  However, merchants must have a register-based
+  bank account to receive payments.
+\item[Interest payments]
+  Taler could theoretically support interest on e-Krona by varying the exchange
+  rate between e-Krona and Krona.  Taler can also theoretically support {\em negative}
+  interest on coins held long-term in wallets.
+\item[Connection to existing payment systems]
+  With proper system integration, wire transfers, debit and credit cards or even
+  NFC-enabled ATMs could all be used to fund the e-Krona wallet.
+\end{description}
+
+Taler effectively provides electronic cash and thus solves the problem
+of gaining access to risk-free assets.  As the Riksbank supervises the
+e-Krona escrow funds (either directly or by auditing the private
+operator), the government can assure citizens that they can always
+exchange e-Kronas back to cash.  Thus, in Taler's design, the government
+acts as a trust anchor.
+
+Taler removes inefficiencies the current system creates through fraud
+risks inherent in register-based systems.  In Taler, citizens only
+ever authenticate to their bank (or social services).  By avoiding
+disclosing personally identifying information or even performing
+credit card-style authentication via third parties, Taler improves
+usability and eliminates most vectors of authentication token
+compromise. 
+
+
+\section*{What challenges and opportunities do you envisage?}
+
+Taler provides the advantages of cash while supporting taxation and
+limiting criminal abuse, as recipients of payments are identifiable.
+Furthermore, Taler transactions are faster, easier and more secure
+than cash or credit card transactions.
+
+The main challenge is the integration of the Taler merchant backend
+into the diverse POS systems that exist today.  While integrating
+Taler is can be done with a few hundred lines of code, NFC-enabled POS
+systems would require at least a firmware update.  Convincing vendors
+to upgrade their systems will thus require a major up-front
+investment.
+
+Taler also requires further development to ensure that wallets are
+available on all relevant platforms.  However, consumer systems are
+much less diverse and hence this effort is significantly smaller.
+
+Deploying Taler at scale should have no major impact on monetary
+policy because the issued e-Krona would be 1:1 backed by Swedish Krona
+in the escrow account at the Riksbank.  However, if there is a
+significant shift from the use of credit-cards to e-Krona, there might
+be a reduction in M2 from fractional reserve banking as e-Krona is
+debit-based while credit-cards are credit-based.  Thus, instead of
+commercial bank money being created from debts, consumers may
+effectively hold e-Krona claims against the escrow account at the
+central bank.  The resulting reduction in M2, and the loss of revenue
+at banks from credit-card interest payments, may require adjustments
+in monetary policies.
+
+
+\section*{What is missing in our concept?}
+
+
+A key requirement for governments considering electronic payment
+systems is the preservation of the Commons.  Cash is a Commons as all
+market participants have equal liberties in handling cash.  If cash is
+replaced by proprietary solutions such as Visa's credit card system or
+ApplePay, these companies have exclusive control over critical
+infrastructure, which often leads to high fees.  Worse, such payment
+service providers may discriminate against individuals or certain
+businesses and can refuse service to individuals or businesses without
+judicial oversight.
+
+In contrast, Taler is implemented as Free Software distributed under
+the GNU General Public License, and without patent encumbrances.  This
+ensures that any government retains sovereignty after deploying Taler,
+as it can liberally inspect, use and modify the software.  In
+particular, no foreign government or company can impose their own
+restrictions or regulatory regime.  Governments can foster competition
+between multiple Taler exchange operators, or run a Taler exchange as
+a government monopoly equivalent to a government mint for coins.
+
+
+
+\section*{Contact}
 
+\begin{center}
+  \includegraphics[width=0.5\textwidth]{../presentations/comprehensive/taler-big-accent.pdf}
 
-{\red Describe general functioning of Taler (ONLY AS MUCH AS FITS ON THIS PAGE - 
-audit, hash of transaction, etc)}
-
-
-
-
-
-
-
-
-\section*{*What would a technical solution for a register-based e-krona look like?*}
-
-We imagine a hybrid solution, as described in the question below. {\red [Can we use blockchain for the register-based component? They seem to put a lot of emphasize on system resilience. (Christian to update according to possibilities???)]}
-
-\section*{*What would a technical solution for a value-based e-krona look like?*}
-
-We imagine a hybrid solution, as described in the question below. 
-
-\section*{*What is your vision for an e-krona, are there other possible solutions than register-based and value-based that you consider to be more appropriate?*}
-
-We imagine a possible e-Krona solution based on the Taler system to be a hybrid solution, with a register-based component and a value based component, in order to fulfil the maximum requirements outlined in ‘The Riksbank’s e-Krona project’ report.
-
-The e-krona Taler wallet can exist on smartphones, in web-browsers, on smartcard and on secure USB sticks. It is filled via wire-transfer to the Taler exchange (Riksbank can define who is entitled to exchange Swedish krona into e-krona), which will create Taler coins (i.e. e-krona) cryptographically and deposit those anonymously with a blind signature into the corresponding wallet.  At the same time, the exchange creates an escrow account for the wallet at the Riksbank and deposits the kronas in that account. These 2 elements are value-based for the wallet and register-based for the escrow-account at the Riksbank: hence our description of e-Krona Taler as hybrid system.
-
-The Taler System addresses the following requirements outlined in the report:
-
-\noindent
-\begin{tabular}{p{4cm} p{8cm}}
-a) Specified in Swedish krona		
- & Designed for all existing currencies \\
-
-b) Payment size				
- & Designed to handle micropayments as well as larger payments between consumers, companies and authorities \\
-
-c) Direct claim on Riksbank		
- & Via escrow account opened by the exchange automatically with the Riksbank to hold the 
-   escrow amounts. In addition, the Riksbank could entitle the holder of e-krona to change them anytime into Swedish kronor. With this the holder has a direct claim on the Riksbank and it might not be necessary to change existing legislation. \\
-
-d) Accessible in real-time			
- & Payments clear in one network RTT \\
-
-e) Payments in real-time			
- & One click instant payments with 24/7 operations \\
-
-f) Offline payments        			
- & Payer or merchant must be online % with the other offline but using NFC. 
-   Exchange must be online. \\
-
-g) Anonymous payments		        	
- & System designed for payers to be anonymous, unless regulation requires disclosure. Merchant is never anonymous. \\
-
-h) e-Krona account 		             	
- & Register based account requires for merchants.  Exchange has e-Krona escrow account. \\
-
-i) Riksbank functions			
- & Holds the escrow account.  Can either run operator of the exchange and guarantee the 
-exchange of e-krona in Swedish kronor directly, or else audit private exchanges similar to conventional banks. UNREADABLE CORRECTIONS \\
-
-j) No bank account necessary			
- & Taler/e-krona can distribute fixed incomes without requiring customers posses bank accounts \\
-
-k) Interest payments % was: Possibility of making
- & AMBIGUOUS QUESTION WITH UNREADABLE CORRECTIONS \\
-
-l) Connection to existing payment systems	
- & Wire transfers, Debit and credit cards can be used to immediately fund the e-krona wallet. \\
-\end{tabular}
-
-Taler solves the problem of gaining access to cash and to risk-free assets.  As the Riksbank holds the e-Krona escrow funds, any Riksbank or government related facility could offer the exchange of e-kronas back to cash for people presenting themselves with their e-krona Taler wallet.
-
-At the same time, Taler removes inefficiencies the current system creates through fraud risks, due to credit cards, personally identifying information, and authentication token compromise.  It thus simplifies both e-commerce and brick-and-mortar transactions, which no longer require authentication techniques with excessive spending power, such as credit cards or PINs.
-
-
-Taler offers the same privacy as cash for the payer, except that withdrawal limits
-carry a legal force not present in ATM withdrawal limits.
-% Nonsensical and seemingly false : (could be limited by  amount per transaction).  
-% IS THIS RELEVANT? This limit could be removed if the payer/wallet owner contributes his identification to the account by a voluntary decision.
-
-\section*{*What challenges and opportunities do you envisage with each e-krona solution?}
-
-UNREADABLE CORRECTIONS
-% WRONG & REMOVED : We envisage no major challenges with a e-Krona Taler solution outlined above,
-% as the system is already up and running in an Alpha version with browser wallets. 
-TERRIBLE PHRASING and UNREADABLE CORRECTIONS: Further development are needed to create the wallets on other platforms and provide more interfaces to merchant systems. 
-
-TERRIBLE PHRASING : The main complexity we see would be the roll-out of the compatible functionality into the POS systems of merchants in the physical world. 
-% REMOVED : But this is no different from the challenges that established systems
-% like SWISH, ... already solved and hence easy to estimate. If this project is
-% Riksbank/government sponsored, that should not be a large.
-UNREADABLE CORRECTIONS
-
-AMBIGUOUS INTENT AND TERRIBLE PHRASING : This outlined solution should have no major impact on monetary policy because the issues of e-krona are 1:1 backed by Swedish kronor in the escrow account at the Riksbank. But two things will happen temporarily – unless cash is used: Firstly, with the issuance of e-krona commercial bank money gets transformed into central bank money until the e-krona are spent and transformed back into Swedish krona. And secondly, non-cash commercial bank money gets transformed into cash-like money until the e-krona are spent.
-
-\section*{*What is missing in our concept?*}
-
-We believe that Riksbank's concept described above fits well with Taler
-to provide a viable, safe, easy-to-use, and low-cost e-krona system to
-complement or eventually supplant cash.  Taler provides the advantages
-of cash while supporting taxation and avoiding criminal usage, as
-recipients are always identifiable. 
-
-Importantly, Taler is implemented as Free Software distributed under the
-GNU General Public License and without patent encumbrances.  
-This ensures a Riksbank retains sovereignty after deploying Taler. 
-No foreign government or company can impose their own restrictions or
-regulatory regime.
-
-
-
-\paragraph{Contact:}
+  \vfill
+  
+  {\Large  \url{https://taler.net/}}
 
-\begin{center}
+  \vfill
+  
 \begin{tabular}{l l l}
-C. Grothoff	&	grothoff@taler.net	&	+4 78 692 68 94 \\
+C. Grothoff	&	grothoff@taler.net	&	+41 78 692 6894 \\
 L. Schumacher	&	schumacher@taler.net	&	+41 79 865 9365 \\
-M. Widmer	&	widmer@taler.net	&	+4179 900 40000 \\
+M. Widmer	&	widmer@taler.net	&	+41 79 900 40000 \\
 \end{tabular}
 \end{center}
 
+\vfill
+
+\includegraphics[width=0.2\textwidth]{../presentations/investors/partner-logos/ashoka.png}
+\hfill
+  \includegraphics[width=0.1\textwidth]{../presentations/investors/partner-logos/inria.png}
+\hfill
+\includegraphics[width=0.1\textwidth]{../presentations/investors/partner-logos/tum.png}
+\hfill
+  \includegraphics[width=0.1\textwidth]{../presentations/investors/partner-logos/gnu.jpeg}
+
 \end{document}