Public Key Currency

Slashdot posted to Make Money Fast
as Public Key Currency:
The tinfoil hat crowd has long suggested that the mylar filament in bills is a remotely readable RFID tag....

That last problem is the worst--it's a lot like the DVD CSS encryption scheme problem. It works find until ONE INSTANCE of the private key gets broken, and then everybody has the key to every single banknote in circulation. And then the whole thing is kaput, money down the drain (literally). So it would be awfully important to solve the tamper-proofing issue, before you went ahead with this idea.

It'd work a lot better if the design were to embrace public key crypto entirely -- each bill contains a unique key, but all the bills in a particular "series" have their unique key signed by a centrally-held private key. Scanning the bill veries the serial number printed on the front.

Scanners would contain the list of public keys, they'd receive an annual update which could also include key revocation lists for any serial numbers commonly counterfeited, or any keys that were compromised.



MoralHazard replies:

Your point about using unique bill keys is right on--I didn't even think about that. That would work much better.

As for the theory about RFID tags in money, how about those pictures from a couple months back of the trucker/ConspiracyNut microwaving his wad? Classic. Doesn't get any better.

Ezmate goes on to say:

A microwaved bill would obviously fail the crypto check via the RFID tag. Such a bill would probably produce an audible "chirp" from the scanner that would let the cashier know, "You might want to take a closer look at what just got handed to you...". At that point, you'd be looking at the other anti-counterfit measures on the bill.