From: "James A. Donald" <jamesd@echeque.com>
Date: Wed, 23 Aug 95 21:56:56 PDT
To: cypherpunks@toad.com
Subject: Shared secrets and corporations in Cyberspace.
Message-ID: <199508240456.VAA06659@blob.best.net>
MIME-Version: 1.0
Content-Type: text/plain


How can collective entities hold keys?


Corporations derive their cohesion partly from realspace coercion, and
partly by trust based on face to face interactions among the participants,
and partly from their brand name.  Trusts derive their cohesion primarily
from trust, again based on face to face interaction.

A cyberspace corporation would derive its cohesion primarily from its name
identification and the public key associated with its brand name.  Consumers
would presumably wish there financial instruments to be signed to the public
key of Megacorp life insurance, rather than Megacorp's insurance saleman,
for fear that otherwise their funds might go astray, or they might get bad
software, etc, and the private key corresponding to that public key will
sign the employees paycheques.

If a cyberspace corporation does not have a valued brand name it is likely
to disintegrate into its components, in the way that some realspace
corporations did in the boisterous early days of silicon valley.

But this creates a problem of "owning the corporation". If one man knows the
corporations secret key, he can pretty much tell the shareholders to go take
a hike.  If two men know the secret key, it probably will not remain secret
much longer.

One solution is to use truenames, rather than keys as the "real identity" --
set up financial transaction software so that it considers that any key
signed by a proper authority certifying the key to be the key of Megacorp is
a valid Megacorp key, that all such keys are equivalent, and that the
authority will only issue keys to one entity called Megacorp.  Then when
folk start fighting over who is the real Megacorp, the authority resolves
the dispute by conventional means.

Current proposals for transaction software are based on truenames and
trees-of-trust.  This is not too bad as long as we have a forest, not a
single tree, but still, one would like to have some arrangement whereby a
large number of people could share a single key, and can buy and sell
interests in that key, whereby we can have the mechanisms of shared
ownership without the need for an external authority to enforce it.

Obviously trusts will work fine in Cyberspace, but trusts are by their
nature small and undemocratic.
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