Disincentivizing/Incentivizing Malicious/Honest Behavior on the Internet via Privacy-Preserving Appcoins

In this paper we argue that privacy-preserving digital coins with low computation and communication overhead can be utilized as micropayments to harden online applications and services. We call such digital coins App Coins, and the applications that use them App Coins-hardened applications. Our thesis is that App Coins-hardened applications can greatly increase the financial cost (to the attackers) of large classes of malicious behavior on the Internet. App Coins can also be used to incentivize and reward cooperative and honest online behavior. We develop cryptographic protocols for such privacy-preserving non-malleable and double-spending resistant App Coins. We show how to modify two sample applications, email and onion routing, to utilize such App Coins. Our performance analysis demonstrates that our protocols are practical and can be easily implemented using commodity hardware.