1. There is a bank B that allows its customers to withdraw cashfrom their accounts at hundreds of specialized automated tellermachines (ATMs) that are only for cash withdrawals (not forchecking balances or performing other transactions). The ATMsoperate in the following way. (In what follows E_B () refers toencryption with the bank's secret key, in a symmetriccryptosystem.) The bank asks the customer C to select a secretnumber (called "personal identification number", denoted by PIN(C)). Then the bank issues the customer C a special magnetized cardthat contains the following two pieces of information (on separateportions of the magnetized strip on the card):
   • The customer's account number at the bank (call itAcNr(C)).
   • E_B(PIN(C)).
   • Each ATM of that bank can perform E_B (*) computation, andalso stores a list of all the valid account numbers. It doesnot store the dollar balance in each account (eachATM limits cash withdrawals to no m ore than $200 per dayfor each account, and each account contains at least $500 -the bank automatically closes an account whose balancefalls below the $500 minimum). When thecustomer C wants to withdraw cash from anATM, C inserts the card and the ATM reads theinformation on it and then challenges C to enter PIN( C ). The ATM then (1) verifies that the AcNr( C ) that it reads from the card is on its list ofvalid account numbers, and then (2) encrypts (i.e., doesE_ B (*)) what C just entered and verifies thatthe result equals to the E_ B (PIN( C ))that is stored in the card.
   • If both (1) and (2) are successfully verified, the ATM allowsthe customer to withdraw the cash (subject to the constraintthat the total amount withdrawn by C that day fromthat ATM does not exceed $200). The ATM also stores a recordof the transaction that consists of the accountnumber and the amount just withdrawn. A t midnight everyday, all the ATM machines communicate with the bank's maincomputer. The computer will update all the customeraccounts by subtracting from their balances the amounts ofcash withdrawn that day. This off-line operation of the ATMallows t he customers to quickly withdraw cash even whenthe network is down or very slow (at peak-hours duringthe day); contrast this to an on- line operation, whichwould have required communication with the bank's maincomputer before a transaction can complete (and would havebeen problematic if the network was down or very slow atthe time of the transaction).
   • Note that, if the card is stole n from the customer, thethief cannot obtain PIN( C ) from the card becauseit is encrypted (this is why it isE_ B (PIN( C )) rather than PIN( C )that is stored on the magnetic strip of the card - thelatter would be insecure because the information onthe magnetic strip of a card is easy to read and modify if youhave the equipment ).
   • Please answer the following question:
     • How can a dishonest customer M (who also has anaccount of Bank B and a Card from Bank B )steal money from C (by withdrawing cash from the accountof C ). Here we assumethat M knows C ’s account number. He also has amachine that can modify information on the magnetic strip.However, M does not know the secret key ofthe Bank.

Answer rating: 100% (QA)

Answer M can steal money from C by getting a copy of Cs card and modifying the magnetic strip to include Ms account number instead of Cs account number and Ms personal identification number PIN instea... View the full answer