Quote from: Realpra on September 25, 2013, 06:04:01 AM

Just saying things don't make them true and you clearly have no idea what you are talking about.

Its all about protocol, if it is secure it doesn't matter if the terminal is trusted or not - much like Bitcoin client communication.

Ok, let me justify my statement:

1. You have a credit card style terminal.
2. You have a small device with a chip (and no user-facing interface).
3. The terminal is actually built/compromised by an attacker.
4. The terminal shows you a transaction for 0.1 BTC. You press ok, enter your PIN, yadda yadda yadda.
5. The terminal sends your pin, and a transaction for 10 BTC.

How does the card know this isn't valid?

Some solutions that would work:

1. The device does have an interface in the form of a small screen and a yes/no button (No MITM possible).
2. The payment request must be cryptographically signed by the user in order for the device to process it.
3. The device can communicate back to the user in a tamper proof manner (cryptographic signature?), so the terminal can't alter the message displayed on the screen.

Your response so far seems to indicate you're using #3, but unless

Quote from: Mike Hearn on September 24, 2013, 01:12:16 PM

You're expecting people to do mental arithmetic to check for bogus terminals?

Then I can't see how you make this work. At all. You could try a weaker form of either inbound or outbound signature, like different pins for each order of magnitude of spending, but any solution that offers a modicum of security is going to be brainpower-expensive.

Not trying to be an asshole here, it's just that a lot of people come here with half-baked ideas, and it's the nice thing to do to point out flaws before they get a chance to hurt themselves or others.