1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
|
\documentclass {article} % {acmart}
\usepackage{url}
\usepackage{eurosym}
\usepackage[T1]{fontenc}
% \usepackage{lmodern}
% \usepackage{verbatim}
\usepackage[utf8]{inputenc}
\usepackage{graphicx}
\def\UoL{University of Luxembourg}
\begin{document}
\pagestyle{headings}
\thispagestyle{empty}
\begin{center}
{\large Taler for eKrona}
\medskip
% \begin{tabular}{l l}
% Project Acronym & LAC - Latent Anonymous Commons (LAKE) \\
% Principal Investigator & Jeffrey Burdges \\
% Host Institution & University of Luxembourg \\
% Main Partner & pEp SA \\
% \end{tabular}
\end{center}
\def\red{} % FIXME
\section*{Introduction}
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).
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 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 Suitable for micro-payments due to very low transaction costs
\item Ease of use (one-click, instant)
\item Open standard protocol without patents, with free reference implementation
\end{itemize}
Taler is intended to run with the following architectural elements.
\includegraphics[width=\textwidth]{taler-arch-full.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 concept described above fits together with the Taler designed system to quickly provide a viable, safe, easy-to-use, low-cost solution to introduce a digital krona as complement to cash, that offers most of the advantages of cash without its downsides, as all recipients of funds are always identifiable (and hence government friendly and discouraging fraud and other illegal businesses). In addition, such a solution based on Taler can be implemented quickly and the open standard protocol without patents with free reference implementations should facilitate fast implementation by all relevant parties.
\paragraph{Contact:}
\begin{center}
\begin{tabular}{l l l}
C. Grothoff & grothoff@taler.net & +4 78 692 68 94 \\
L. Schumacher & schumacher@taler.net & +41 79 865 9365 \\
M. Widmer & widmer@taler.net & +4179 900 40000 \\
\end{tabular}
\end{center}
\end{document}
|
