Financial cryptography (FC) is the use of cryptography in applications with strong financial motivation.

Cryptographers think of the field as originating in the work of Dr David Chaum who invented the blinded signature. This special form of a cryptographic signature permitted a coin to be signed without the signer seeing the actual coin, and permitted a form of digital token money that offered untraceability. This form is sometimes known as Digital Cash.

A widely-used and previously -developed cryptographic mechanisms is Data Encryption Standard, which was used primarily for the protecting of electronic funds transfers. However, it was the work of David Chaum that excited the cryptography community about the potential of encrypted bits as financial instruments.

Financial cryptography includes all the mechanisms and algorithms for the protection of financial transfers, in addition to the creation of new forms of money. Proof of work and various auction protocols fall under the umbrella of Financial Cryptography. Hash cash, by Ron Rivest is being used to limit spam. And Everbank is the first entirely online bank.

Financial cryptography is distinguished from traditional cryptography in that cryptography in the last thousand years has been predominantly used for military purposes.

As a business, FC followed the guide of cryptography and only the simplest ideas were adopted. Account money systems protected by SSL such as PayPal, e-gold and GoldMoney were relatively successful, but more innovative mechanisms, including blinded token money were not.

Financial cryptography is frequently seen as of broad scope. Grigg sees financial cryptograpy in seven layers ^*, being the combination of seven distinct disciplines: cryptography, software engineering, rights, accounting, governance, value, and financial applications. Business failures can often be traced to missing disciplines or poor application of same. This view has FC as an appropriately crossdiscipline subject, given that finance and cryptography are themselves built upon multiple disciplines.

Financial cryptography is centered at the annual meeting of the International Financial Cryptography Association Financial Cryptography , which is held each year in a different banking or tax haven.

See also

• Electronic money
• Payments systems
• Loyalty and corporate monies
• Smart contracts
• Virtual games
• Funds transfer
• Automatic teller machines
• POS Terminal
• Anonymous internet banking
• Economics of security

External links

• International Financial Cryptography Association
• Fincrypt weblog
• Financial Cryptography weblog
• Contracts with bearer

Financial cryptography