Classic Financial Cryptography

Page #833 of Chapter: Crypto-for-the-rest-of-us

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Financial Cryptography responds to the needs of the two main category of financial activity:

  • Institutional Finance
  • Public Finance

    The first is the money kept and exchanged by banks, various financial institutions, and big merchants. The latter is the sum total of public purchase and transactions.

    : Institutions safeguard money 'at rest' by 'surround walls' like 'fire walls' which are not cryptographic measures per se, and they use state of the art symmetric ciphers for transport of money between institutions. Banks and similar institutions subscribe to a very tight scrutiny, so that any hack event will be readily discovered, and in most of the cases quickly neutralized.

    Public transactions are carried out by strangers through elaborate identity verification protocols, where money is handled by web sites, and where attackers may operate undetected for a long time. This is the main battleground with cyber thieves who often go home with a big booty.

    Public transactions are by and large carried out through payment cards, and involve many players. Each transaction is real time pledged, and over a few days settled. Public financial data is constantly analyzed to support merchants and other business factors, and hence it can hardly be stored encrypted, hence it is generally protected through security 'walls'. Security at the purchase junction is provided by asymmetric cryptography, and at subsequent links by strong symmetric cryptography.

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