The Creation of the Internet

The Internet got its start in the United States more

than 50 years ago as a government weapon in the
Cold War.
THE SPUTNIK SCARE

On October 4, 1957, the Soviet Union launched the

worlds first manmade satellite into orbit. After Sputniks
launch, many Americans began to think more seriously
about science and technology. The federal government
formed new agencies, such as the National Aeronautics
and Space Administration (NASA) and the Department of
Defenses Advanced Research Projects Agency (ARPA),
to develop space-age technologies such as rockets,
weapons and computers.
THE BIRTH OF THE ARPANET

In 1962, a scientist from M.I.T.(Massachusetts Institute of

Technology) and ARPA named J.C.R. Licklider proposed
a galactic network of computers that could talk to one
another. Such a network would enable government
leaders to communicate even if the Soviets destroyed the
telephone system.
In 1965, another M.I.T. scientist developed a way of
sending information from one computer to another that
he called packet switching. Packet switching breaks
data down into blocks, or packets, before sending it to its
destination. That way, each packet can take its own route
from place to place. Without packet switching, the
governments computer networknow known as the
ARPAnetwould have been just as vulnerable to enemy
attacks as the phone system.
THE NETWORK GROWS

By the end of the 1970s, a computer scientist named

Vinton Cerf had begun to integrate into a single
worldwide Internet by developing a way for all of the
computers on all of the worlds mini-networks to
communicate with one another. He called his invention
Transmission Control Protocol, or TCP. One writer
describes Cerfs protocol as the handshake that
introduces distant and different computers to each other
in a virtual space.
THE WORLD WIDE WEB

Cerfs protocol transformed the Internet into a worldwide

network. Throughout the 1980s, researchers and
scientists used it to send files and data from one
computer to another. However, in 1991 the Internet
changed again. That year, a computer programmer in
Switzerland named Tim Berners-Lee introduced the
World Wide Web: an Internet that was not simply a way
to send files from one place to another but was itself a
web of information that anyone on the Internet could
retrieve. Berners-Lee created the Internet that we know
today.
Since then, the Internet has changed in many ways. In
1992, a group of students and researchers at the
University of Illinois developed a sophisticated browser
that they called Mosaic. (It later became Netscape.)
Mosaic offered a user-friendly way to search the Web: It
allowed users to see words and pictures on the same
page for the first time and to navigate using scrollbars
and clickable links.
That same year, Congress decided that the Web could
be used for commercial purposes. As a result, companies
of all kinds hurried to set up websites of their own, and e-
commerce entrepreneurs began to use the Internet to sell
goods directly to customers. More recently, social
networking sites like Facebook have become a popular
way for people of all ages to stay connected.
MilliCent Protocol:
small-amount Internet payments
MilliCent protocol is a scheme for secure and convenient
small-amount payments. "Small" means that each
transaction is within $10 (and possibly as small as
fractions of a cent).
There are three participants in the protocol:

Customer

Vendor (another name for "merchant", the difference

in name stresses the fact that a vendor may not have
a full-scale business, but just sells some products or
services at their web site).

Broker - a bank or another large trusted organization

which has contracts with vendors and customers.
MilliCent money is called scrip. The main difference
between MilliCent and other digital money protocol is that
each vendor issues their own scrip, and a particular scrip
token can be spent only at the vendor who has issued it.
In this sense scrip is similar to a prepaid calling card.
A scrip token consists of the following information:

1. Vendor: the name of the vendor who accepts the scrip.

2. Value: the monetary value of the scrip token.
3. ID number: a unique ID of the scrip token. All scrip
tokens of the same vendor have different ID numbers.
4. Customer ID: the ID of the customer.
5. Expiration date: similarly to a prepaid calling card,
scrip is valid only within a few months from the date of
issue.
6. Properties: any other information about the customer
that the vendor needs, such as age or discount
information.
7. Certificate: a "signature" which verifies the scrip.
Expiration date is used to prevent customers from
accumulating large amounts of scrip and to make it
easier for the vendor to check for. If a scrip token is about
to expire, the vendor or a broker can exchange it for a
new one.
Issuing scrip

Scrip may be issued by a vendor or a broker. A broker

has a contract with a vendor for issuing scrip. The broker
"buys" the right to produce scrip for a certain amount,
the vendor tells the broker the information needed to
produce this scrip. For the broker to make profit, the
vendor sells the scrip to the broker at a discount,
compared to the price of scrip for the customer.
A customer opens an account with a broker, deposits
some money into this account, and gets an equivalent
amount of broker's scrip. The customer then uses
broker's scrip to buy (as needed) scrip for the vendors
that he/she uses. We assume that a broker has contracts
with many vendors and that many customers have
accounts with the same broker.
Three protocols for using scrip

1. Scrip in the clear. The customer sends a request for

a product, a scrip token as a payment, and the
certificate for the scrip. The merchant sends back the
product (if any) and the change (another scrip token).
All of this information is sent unencrypted.

2. Private and secure. The next two protocols make

use of a customer secret: a number which is different
for each customer and is sent (securely) to the
customer when their account is created. A customer
secret can be recomputed by the vendor based on the
customer's ID.
3. Secure without encryption. Even though the above
protocol uses symmetric encryption, it still may be
slower and more expensive than needed for the kinds
of applications MilliCent is proposed for. This protocol
uses customer secret (just as the protocol Private and
secure), but instead of encryption, this secret is used
for message verification.
Online Banking
Online banking, also known as internet banking, e-
banking or virtual banking, is an electronic payment
system that enables customers of a bank or other
financial institution to conduct a range of financial
transactions through the financial institution's website.
To access a financial institution's online banking facility, a
customer with internet access will need to register with
the institution for the service, and set up a password and
other credentials for customer verification. Financial
institutions now routinely allocate customers numbers,
whether or not customers have indicated an intention to
access their online banking facility. Customer numbers
are normally not the same as account numbers, because
a number of customer accounts can be linked to the one
customer number. Technically, the customer number can
be linked to any account with the financial institution that
the customer controls, though the financial institution may
limit the range of accounts that may be accessed to, say,
cheque, savings, loan, credit card and similar accounts.
The customer visits the financial institution's secure
website, and enters the online banking facility using the
customer number and credentials previously set up. The
types of financial transactions which a customer may
transact through online banking are determined by the
financial institution, but usually includes obtaining
account balances, a list of the recent transactions,
electronic bill payments and funds transfers between a
customer's or another's accounts. Most banks also
enable a customer to download copies of bank
statements, which can be printed at the customer's
premises (some banks charge a fee for mailing hard
copies of bank statements). Some banks also enable
customers to download transactions directly into the
customer's accounting software. The facility may also
enable the customer to order a cheque book, statements,
report loss of credit cards, stop payment on a cheque,
advise change of address and other routine actions.
Banks and the World Wide Web

Around 1994, banks saw the rising popularity of the

internet as an opportunity to advertise their services.
Initially, they used the internet as another brochure,
without interaction with the customer. Early sites featured
pictures of the bank's officers or buildings, and provided
customers with maps of branches and ATM locations,
phone numbers to call for further information and simple
listings of products.
Interactive banking on the Web

In 1995, Wells Fargo was the first U.S. bank to add

account services to its website, with other banks quickly
following suit. That same year, Presidential became the
first U.S. bank to open bank accounts over the internet.
According to research by Online Banking Report, at the
end of 1999 less than 0.4% of households in the U.S.
were using online banking. At the beginning of 2004,
some 33 million U.S. households (31%) were using some
form of online banking. Five years later, 47% of
Americans used online banking, according to a survey by
Gartner Group. Meanwhile, in the UK online banking
grew from 63% to 70% of internet users between 2011
and 2012.