misc edits based on Neal's comments
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@ -1022,19 +1022,19 @@ similar risks of losing cash in a physical wallet. Unlike physical
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wallets, Taler's wallet could be backed up to secure against loss of a
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device.
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Taler's contracts do provide a degree of protection for customers
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because they are signed by the merchant and retained by the wallet:
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while they mirror the paper receipts that customers may receive in
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Taler's contracts provide a degree of protection for customers,
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because they are signed by the merchant and retained by the wallet.
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While they mirror the paper receipts that customers receive in
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physical stores, Taler's cryptographically signed contracts ought to
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carry more weight in courts than typical paper receipts.
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Point-of-sale systems providing printed receipts have been compromised
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in the past by merchants to embezzle sales
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taxes.~\cite{munichicecream} With Taler, the merchant still generates
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a receipt for the customer; however, the record for the tax
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a receipt for the customer, however, the record for the tax
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authorities ultimately is anchored with the exchange's wire transfer
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to the merchant. Using the subject of the wire transfer, the state
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can trace the payments and request the merchant to provide
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can trace the payments and request the merchant provide
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cryptographically matching contracts. Thus, this type of tax
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fraud is no longer possible, which is why we call Taler {\em
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taxable}. The mere threat of the state sometimes tracing transactions
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@ -1051,7 +1051,7 @@ real money on their bank accounts}. To ensure that the exchange operator
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does not embezzle these funds, Taler expects exchange operators to be
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regularly audited by an independent auditor\footnote{Auditors are typically
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run by financial regulatory bodies of states}. The auditor can then verify that the incoming and outgoing
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transactions and the current balance of the exchange match the logs
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transactions, and the current balance of the exchange matches the logs
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with the cryptographically secured transaction records.
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@ -1069,16 +1069,16 @@ coins from. We mitigate this problem by allowing merchants to
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support all exchanges audited by a particular auditor. We believe
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this a reasonable approach, because auditors and merchants must
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operate with a particular legal and financial framework anyways. We
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note that a similar failure mode exists with credit cards, where not
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all merchants accept all issuers, especially internationally.
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note that a similar failure mode exists with credit cards where not
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all merchants accept all issuers, which is often the case internationally.
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\item
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Restoring the Taler wallet state from previous backups, or copying the
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wallet state to a new machine, may cause honest users to attempt to
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wallet state to a new machine may cause honest users to attempt to
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double spend coins, as the wallet does not know when coins are spent
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between backup and recovery. In this case, the exchange provides
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cryptographic proof that the coins were previously spent, so the
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wallet can verify that the exchange and merchant are behaving honestly.
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cryptographic proof to the wallet that the coins were previously spent so the
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wallet can verify that the exchange and the merchant are behaving honestly.
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% FIXME FIXME: the following paragraph seems to describe a scenario where the
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% wallet lost coins due to a restore from backup and then ask for refresh
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