alt Hacker NewsDo these cards solve the electronic cash problem (in a completely different way than cryptocurrencies)? What I mean is that
- Are the card readers special/trusted issued by bank/govt in some way? Or you can transfer money from one card to another yourself fully offline?
- Is there any requirements that the transfers have to be eventually communicated to the bank by one of the parties to be fully resolved?
- Has someone managed to create fake cards with fake money in it, or this is impossible by design?
As I understand it, these cards work basically the same way as transit card systems in other countries, like the SF Bay Area's "Clipper" cards.
The overall model is similar to tap-to-pay debit cards. They're only used for consumer-to-business payments. When you tap the card, the card sends over an account number / signature / etc, which the merchant sends to a central clearinghouse to finalize the transactions.
The main difference is that the card itself keeps a running balance of how much money the customer has available to spend. In many cases, this gives the merchant enough confidence to e.g. let you through the train turnstile without actually waiting for the central clearinghouse to confirm the transaction. (I think in practice they usually send all the transactions in batches, daily or weekly or something.)
The readers do some trusted-computing/secure-enclave type stuff but are not especially hard to obtain; I think there have even been cases where companies like Nintendo have built them into consumer products, so that you could e.g. tap your card to your Nintendo 3DS to buy a video game.
I imagine there's a bit more security on the machines that let you load money on the cards, but it's probably not completely impossible to make a fake card. But the low value limit (usually a couple hundred dollars, depending on the card provider), the inability to get cash out of the system (often you can't even buy things like postage stamps), and the fact that you'll get caught relatively quickly (once the central clearinghouse notices the transactions don't match up) make it unattractive to do it in practice.