clarify losses from DK compromise
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@ -485,20 +485,21 @@ Denomination keys have an expiration date, before which any coins
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signed with it must be spent or refreshed. This allows the exchange
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to eventually discard records of old transactions, thus limiting the
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records that the exchange must retain and search to detect
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double-spending attempts. Furthermore, the exchange uses each
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denomination key only for a limited number of coins. In this way, if
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a private denomination key were to be compromised, the exchange would
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detect this once more coins were redeemed than the total that was
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signed into existence using that denomination key. In this case, the
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exchange can allow authentic customers to exchange their unspent
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coins that were signed with the compromised private key, while
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refusing further anonymous transactions involving those coins. As a
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result, the financial damage of losing a private signing key can be
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limited to at most twice the amount originally signed with that key.
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double-spending attempts. If a private denomination key were to be
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compromised, the exchange can detect this once more coins are redeemed
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than the total that was signed into existence using that denomination
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key. In this case, the exchange can allow authentic customers to
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redeem their unspent coins that were signed with the compromised
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private key, while refusing further deposits involving coins signed by
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the compromised denomination key. As a result, the financial damage
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of losing a private signing key is limited to at most the amount
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originally signed with that key, and denomination key rotation can be
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used to bound that risk.
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We also ensure that the exchange cannot deanonymize users by signing
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We ensure that the exchange cannot deanonymize users by signing
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each coin with a fresh denomination key. For this, exchanges are
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required to publicly announce their denomination keys in advance.
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required to publicly announce their denomination keys in advance
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with validity periods that imply sufficiently strong anonymity sets.
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These announcements are expected to be signed with an off-line
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long-term private {\em master signing key} of the exchange and the
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auditor. Additionally, customers should obtain these announcements
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