Improvements in Probabilistic Micropayment Schemes

This paper reviews the desirable properties and security features of electronic commerce systems and the problems that are unique to electronic cash. We will then examine two older micropayment systems, describing the desirable properties that they achieve. Finally, we will present a new micropayment system for electronic commerce introduced by Silvio Micali and Ronald Rivest, including the digital encryption technologies employed, which improves upon past systems. This last system (used in Peppercoin Payment Service) uses a probabilistic protocol to efficiently process small transactions, choosing only a certain number of cryptographically secure payments to process which reduces bank processing costs by several orders of magnitude.