From: jamesd@echeque.com
Date: Tue, 21 May 1996 16:50:14 +0800
To: Wei Dai <weidai@eskimo.com>
Subject: Re: encrypted open books (Was why does the state still stand)
Message-ID: <199605202207.PAA05112@dns1.noc.best.net>
MIME-Version: 1.0
Content-Type: text/plain


On Mon, 20 May 1996 jamesd@echeque.com wrote:
>> Look up cypernomicon, "open encrypted books"

At 01:30 PM 5/20/96 -0700, Wei Dai wrote:
> There is indeed a short section in the Cyphernomicon about encrypted open
> books.  Unfortunately it doesn't describe it in detail,

An organization, such as a bank, issues signed, non anonymous promises to
pay to various nyms -- in other words bank accounts, or interest
bearing bonds, or some such.

A nym would like to know what the total amount of such signed obligation is,
so that he can be sure it is less than the total value of the institutions 
good name and readily findable and confiscatable assets.

But we do not want a bunch of outsiders getting a list of lots of private
information about who owns what, (such as auditors who are usually in the
pockets of the tax collectors).   The institution needs to be able
to prove that it only owes total amount X in this form, without letting 
Tom, Dick, and Harry know who it owes amount X to, and why.

To do this it organizes its accounts in a binary tree, and constructs a one
way checksum tree checksum, revealing to each custom the part of the tree he
is on, all the way up to the root, which must be the same for all customers,
and must be placed in some public place, so that any customer can tell that 
his account is included in the total openly admitted obligations of the 
institution, and any customer can, by revealing secret information, prove 
that he is one of the people that the institution has publicly admitted 
owing money to.
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