The present invention provides a system for electronic commerce that reduces the amount of data needed to be stored on a user computer or electronic device. A bank processor stores information corresponding to coins or funds and the user device (such as a payer or merchant processor) needs to only store a single secret key needed to access the data stored in the bank's memory. The user's device can be a smart card since only a minimal amount of data needs to be stored on the user's device. The bank processor of the present invention may hold disposable anonymous accounts in a bank memory. When a coin is spent, the corresponding account is deleted from the bank's memory and a new account is created which corresponds to a new coin. This completes a payment from a payer processor to a merchant processor. The new account is the merchant's account. This implementation avoids the threat of computer virus attacks since a smart card is far less susceptible to these. This implementation also allows pre-paid smart cards to be used by not requiring a link to the identity of the smart card owner. The present invention offers users computational (but not revocable) privacy, and protects against the bank robbery attack. The method provides chain privacy in that the bank processor will not be able to correlate the identity of users to payments that are in between the initial deposit into a traditional account and the final withdrawal from a traditional account.
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