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Led Zeppelin II

Essay by   •  October 7, 2010  •  Essay  •  1,392 Words (6 Pages)  •  1,586 Views

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Electronic Commerce

Initially, the Internet was designed to be used by government and academic users,

but now it is rapidly becoming commercialized. It has on-line "shops", even

electronic "shopping malls". Customers, browsing at their computers, can view

products, read descriptions, and sometimes even try samples. What they lack is

the means to buy from their keyboard, on impulse. They could pay by credit card,

transmitting the necessary data by modem; but intercepting messages on the

Internet is trivially easy for a smart hacker, so sending a credit-card number

in an unscrambled message is inviting trouble. It would be relatively safe to

send a credit card number encrypted with a hard-to-break code. That would

require either a general adoption across the internet of standard encoding

protocols, or the making of prior arrangements between buyers and sellers. Both

consumers and merchants could see a windfall if these problems are solved. For

merchants, a secure and easily divisible supply of electronic money will

motivate more Internet surfers to become on-line shoppers. Electronic money

will also make it easier for smaller businesses to achieve a level of automation

already enjoyed by many large corporations whose Electronic Data Interchange

heritage means streams of electronic bits now flow instead of cash in back-end

financial processes. We need to resolve four key technology issues before

consumers and merchants anoint electric money with the same real and perceived

values as our tangible bills and coins. These four key areas are: Security,

Authentication, Anonymity, and Divisibility.

Commercial R&D departments and university labs are developing measures to

address security for both Internet and private-network transactions. The

venerable answer to securing sensitive information, like credit-card numbers, is

to encrypt the data before you send it out. MIT's Kerberos, which is named

after the three-headed watchdog of Greek mythology, is one of the best-known-

private-key encryption technologies. It creates an encrypted data packet,

called a ticket, which securely identifies the user. To make a purchase, you

generate the ticket during a series of coded messages you exchange with a

Kerberos server, which sits between your computer system and the one you are

communicating with. These latter two systems share a secret key with the

Kerberos server to protect information from prying eyes and to assure that your

data has not been altered during the transmission. But this technology has a

potentially weak link: Breach the server, and the watchdog rolls over and plays

dead. An alternative to private-key cryptography is a public-key system that

directly connects consumers and merchants. Businesses need two keys in public-

key encryption: one to encrypt, the other to decrypt the message. Everyone who

expects to receive a message publishes a key. To send digital cash to someone,

you look up the public key and use the algorithm to encrypt the payment. The

recipient then uses the private half of the key pair for decryption. Although

encryption fortifies our electronic transaction against thieves, there is a

cost: The processing overhead of encryption/decryption makes high-volume, low-

volume payments prohibitively expensive. Processing time for a reasonably safe

digital signature conspires against keeping costs per transaction low.

Depending on key length, an average machine can only sign between twenty and

fifty messages per second. Decryption is faster. One way to factor out the

overhead is to use a trustee organization, one that collects batches of small

transaction before passing them on to the credit-card organization for

processing. First Virtual, an Internet-based banking organization, relies on

this approach. Consumers register their credit cards with First Virtual over

the phone to eliminate security risks, and from then on, they uses personal

identification numbers (PINs) to make purchases.

Encryption may help make the electric money more secure, but we also need

guarantees that no one alters the data--most notably the denomination of the

currency--at either end of the transaction. One form of verification is secure

hash algorithms, which represent a large file of multiple megabytes with a

relatively short number consisting of a few hundred bits. We use the surrogate

file--whose smaller size saves computing time--to verify the integrity of a

larger block of data. Hash algorithms work similarly to the checksums used in

communications protocols: The sender adds up all the bytes in a data packet and

appends

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