commit 0bf872223c6e2a04e06f4b98bab3e86dc0c25f67
parent 9c20e1d40cd223347314c7a295ddc0ad682efa40
Author: Christian Grothoff <christian@grothoff.org>
Date: Sun, 27 Dec 2020 21:45:19 +0100
Merge branch 'master' of git+ssh://git.taler.net/marketing
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+5. Existing commercial banks should continue to be responsible for
+ consumer and business KYC, and the management of savings and loans.
+ Software companies should provide integration services, both for
+ consumers with special needs (such as disabilities) and for merchants
+ wanting to accept payments using digital Euros.
+ Most existing digital payment processing businesses built around
+ credit cards should die, as these parasitic middleman only drain funds
+ from the economy without actually providing adequate value.
+
+6. We see a limited use for "smart contracts". Here, most likely very few
+ well-defined build-in contracts (such as currency trading and
+ privacy-preserving digital auctions, as proposed by Prof. Brandt (TUM))
+ could be useful. A Turing-complete general smart contract runtime would
+ likely be too slow, too generic, too insecure and most importantly lead to
+ digital contracts that would not be understood by their human users.
+
+ Cheap digital Euro payments can open the door to micro-payments, where
+ users may request payment to read e-mail (killing spam), servers may
+ request payment before returning expensive resources (limiting DDoS
+ attacks), and online publishers may process payments for each article
+ instead of relying on advertising or long-term subscriptions.
+
+ A well-designed digital Euro platform could be used to not only process
+ payments involving digital Euros, but might also serve to digitize
+ stock exchanges if digital coins are used to represent company shares
+ and voting rights. Integrated currency trading would then also enable
+ stock trading.
+
+7. Any digital Euro solution must be based on Free Software reference
+ implementations of open APIs (no patents, no royalties for the design)
+ to ensure a level playing field for all actors. The design must
+ furthermore implement privacy-by-design and privacy-by-default (see GDPR)
+ while also including adequate provisions for KYC/AML/CFT. We know this
+ is possible.
+
+8. Cryptographic signatures are the first line of defense, with a proper
+ design ensuring that audits can attribute failures to the respective guilty
+ party. Additionally, modern designs can ensure that financial losses from
+ time-limited compromises of a party are at least bounded to the volume
+ handled by that party during the time window of the compromise.
+
+9. Blind signatures for Chaum-style digital cash remain the best foundation
+ for cash-like digital payments. However, modern designs add additional
+ capabilities, such as giving change, key management (expiration of
+ key material) and charge reversal (refunds).
+
+ We believe that offline use should not be considered for digital
+ payments. With offline use, it is always possible for customers
+ to engage in double-spending while the global system state is
+ inconsistent. Given that electronic transactions can be automated,
+ the damage from double-spending is not double, but potentially
+ unlimited. Recouping funds after double-spending may not be possible
+ in cases where the culprit has privacy, does not have the economic
+ means, or even was a victim of a (cyber)crime themselves.
+
+ Furthermore, offline use is already adequately addressed by the
+ existing physical cash, which should be preserved as a means of
+ payment.
+
+10. A good trade-off is to ensure that anyone obtaining digital
+ cash must identify to withdraw, and that anyone receiving
+ digital cash must deposit it immediately into a KYC'ed bank
+ account to provide income transparency. Additionally, anyone
+ receiving digital cash should be responsible to provide digital
+ evidence (like a digital contract) cryptographically tied to the
+ transaction that explains why the funds were received. At the
+ same time, the system MUST NOT identify the spender, thus ensuring
+ that citizens have privacy in where they spent their money while
+ also making sure that merchants receiving funds can be held to
+ account.
+
+11. Withdraw limits on digital cash, possibly combined
+ with an expiration time for the validity of digital cash signatures,
+ are sufficient to manage the quantity of digital cash in circulation.
+ Reasonable withdraw limits will likely even be requested by citizens,
+ as they may want to limit the damage from someone compromising their
+ online banking credentials and then illicitly withdrawing digital
+ Euros on their behalf.
+
+12. ???
+
+13. Incoming funds from transactions in digital Euros should not be
+ placed into the receiver's electronic wallet at all, but always into their
+ (regular) bank account. Citizens should obtain digital Euros only by
+ (1) withdrawing them from their bank account, (2) receiving them as
+ subsidies from the government, or (3) non-transactional (trusted)
+ sharing of funds (say between family members sharing a wallet). This way,
+ withdraw limits on digital currency can be used to easily limit holdings,
+ and the state can enforce taxation on income and revenues by auditing
+ (regular) commercial bank account transactions.
+
+ This can be made to have a minimal impact on usabilty as long as
+ withdrawing digital Euros from a bank account is easy, for example
+ if it only involves scanning a QR code during online banking or
+ holding a mobile phone close to an ATM (for NFC transmission).
+
+ Given the current state of computer security, holding large amounts of
+ digital cash on a personal computer or mobile device is also risky, so
+ withdraw limits should suffice to effectively cap the balance users should
+ be willing to carry.
+
+14. ???
+
+15. We do not see an urgent need for cross-currency payments, this creates
+ mostly economic and political hazzards. However, what is important is
+ that a global standard is created, and that consumers can carry balances
+ in various currencies in their unified digital wallet. To create such
+ a global standard, a patent-free Free Software approach is crucial, as
+ no country should make itself dependent on proprietary software that
+ is likely subject to foreign influence. When the USA recently sanctioned
+ Huawei's use of Google Android, only the Free Software components remained
+ usable for Huawei. Creating a proprietary European standard would thus
+ fail to satisfy the possibility of global appeal, as countries increasingly
+ realize that they cannot have their critical infrastructure depend on
+ proprietary foreign technology.
+
+16. By requiring KYC on anyone receiving digital funds, the use of the digital
+ Euro for income can easily be restrained to European residents, without in
+ any way excluding visitors from spending money in Europe as they would
+ have the opportunity to withdraw (possibly limited amounts of) digital
+ Euros at ATMs, banks or online.
+
+17. An efficient design with a software-only approach is in principle usable
+ from any networked device. If the core platform is written in C, the code
+ would be highly efficient and can run on any embedded system. By providing
+ a Free Software reference implementation, all vendors can easily integrate
+ support for the digital Euro into their products.
+
+18. Taler Systems SA can provide ECB with a complete implementation of a
+ payment processor, commercial bank integration, consumer wallet(s),
+ merchant backends suitable for issuing a digital Euro. GNU Taler has been
+ designed with appropriate consideration of the regulatory concerns
+ (including privacy and CFT/AML and fiscal policy) and is expected to scale
+ easily to the required transaction levels and at minimal cost per
+ transaction.
+
+
+
