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authorChristian Grothoff <christian@grothoff.org>2015-08-03 18:35:32 +0200
committerChristian Grothoff <christian@grothoff.org>2015-08-03 18:35:32 +0200
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<img src="images/system.svg" alt="system overview" style="float: right; margin: 5px 5px 5px 5px;" width="50%">
<ol>
<li lang="en">A customer instructs his <b>bank</b> to transfer funds
- from his account to the Taler mint (top left). In the subject of
- the transaction, he includes an authentication token from his
- electronic <b>wallet</b>. In Taler terminology, the customer
- creates a reserve at the mint.</li>
+ from his account to the Taler mint (top left). In the subject of
+ the transaction, he includes an authentication token from his
+ electronic <b>wallet</b>. In Taler terminology, the customer
+ creates a reserve at the mint.</li>
<li lang="en">Once the mint has received the transfer, it allows the
- customer's electronic wallet to <b>withdraw</b> electronic coins.
- The electronic coins are digital representations of the original
- transfer. It is important to note that the mint does not learn
- the "serial numbers" of the coins in this process, so it cannot
- tell later which customer purchased what at which merchant.
- The use of Taler does not change the currency or the
- total value of the funds (except for fees which the mint may
- charge for the service).</li>
+ customer's electronic wallet to <b>withdraw</b> electronic coins.
+ The electronic coins are digital representations of the original
+ transfer. It is important to note that the mint does not learn
+ the "serial numbers" of the coins in this process, so it cannot
+ tell later which customer purchased what at which merchant.
+ The use of Taler does not change the currency or the
+ total value of the funds (except for fees which the mint may
+ charge for the service).</li>
<li lang="en">Once the customer has the digital coins in his wallet,
- the wallet can be used to <b>spend</b> the coins with merchant
- portals that support the Taler
- payment system and accept the respective mint as a business
- partner (bottom arrow). This creates a digital contract signed
- by the customer's coins and the merchant. Assuming courts accept
- cryptographic signatures, the customer can later use this digitally
- signed contract in a court of law to prove the exact terms of
- the contract and that he paid the respective amount. The customer
- does not learn the banking details of the merchant, and Taler
- does not require the merchant to learn the identity of the
- customer. Naturally, the customer can spend any fraction of his
- digital coins (the system takes care of customers getting
- change).</li>
+ the wallet can be used to <b>spend</b> the coins with merchant
+ portals that support the Taler
+ payment system and accept the respective mint as a business
+ partner (bottom arrow). This creates a digital contract signed
+ by the customer's coins and the merchant. Assuming courts accept
+ cryptographic signatures, the customer can later use this digitally
+ signed contract in a court of law to prove the exact terms of
+ the contract and that he paid the respective amount. The customer
+ does not learn the banking details of the merchant, and Taler
+ does not require the merchant to learn the identity of the
+ customer. Naturally, the customer can spend any fraction of his
+ digital coins (the system takes care of customers getting
+ change).</li>
<li lang="en">Merchants receiving digital coins <b>deposits</b>
- the respective receipts that resulted from the contract signing
- with the customer at the mint to redeem the coins.
- The deposit step does not reveal the learn the details of the
- contract between the customer and the merchant or the identity
- of the customer to the mint in any way. However, the mint
- does learn the identity of the merchant via the provided bank
- routing information. The merchant can, for example when
- compelled by the state for taxation, provide information linking
- the individual deposit to the respective contract signed by the
- customer. Thus, the mint's database allows the state to enforce
- that merchants pay applicable taxes (and do not engage in
- illegal contracts).</li>
+ the respective receipts that resulted from the contract signing
+ with the customer at the mint to redeem the coins.
+ The deposit step does not reveal the learn the details of the
+ contract between the customer and the merchant or the identity
+ of the customer to the mint in any way. However, the mint
+ does learn the identity of the merchant via the provided bank
+ routing information. The merchant can, for example when
+ compelled by the state for taxation, provide information linking
+ the individual deposit to the respective contract signed by the
+ customer. Thus, the mint's database allows the state to enforce
+ that merchants pay applicable taxes (and do not engage in
+ illegal contracts).</li>
<li lang="en">Finally, the mint transfers funds corresponding to
- the digital coins redeemed by the merchants to the merchant's
- <b>bank</b> account. The mint may combine multiple small
- transactions into one larger bank transfer.
- The merchant can query the mint
- about the relationship between the bank transfers and the
- individual claims that were deposited.</li>
+ the digital coins redeemed by the merchants to the merchant's
+ <b>bank</b> account. The mint may combine multiple small
+ transactions into one larger bank transfer.
+ The merchant can query the mint
+ about the relationship between the bank transfers and the
+ individual claims that were deposited.</li>
<li lang="en">Most importantly, the mint keeps cryptographic
- proofs that allow it to demonstrate that it is operating
- correctly to third parties. The system requires an external
- <b>auditor</b>, such as a government-appointed financial regulatory
- body, to frequently verify the mint's databases and check that
- its bank balance matches the total value of the remaining coins
- in circulation.</li>
+ proofs that allow it to demonstrate that it is operating
+ correctly to third parties. The system requires an external
+ <b>auditor</b>, such as a government-appointed financial regulatory
+ body, to frequently verify the mint's databases and check that
+ its bank balance matches the total value of the remaining coins
+ in circulation.</li>
<li lang="en">Without the auditor, the mint operators could
- steal funds they are holding in reserve. Customers and merchants
- cannot cheat each other or the mint. If any party's computers
- are compromised, the financial damage is limited to the
- respective party and proportional to the funds they
- have in circulation during the period of the compromise.</li>
+ steal funds they are holding in reserve. Customers and merchants
+ cannot cheat each other or the mint. If any party's computers
+ are compromised, the financial damage is limited to the
+ respective party and proportional to the funds they
+ have in circulation during the period of the compromise.</li>
</ol>
</p>
</div>