From: Wei Dai <weidai@eskimo.com>
Date: Tue, 21 May 1996 15:05:59 +0800
To: jamesd@echeque.com
Subject: encrypted open books
In-Reply-To: <199605201958.MAA28257@dns1.noc.best.net>
Message-ID: <Pine.SUN.3.93.960520132108.25932A-100000@eskimo.com>
MIME-Version: 1.0
Content-Type: text/plain


On Mon, 20 May 1996 jamesd@echeque.com wrote:

> Look up cypernomicon, "open encrypted books"

There is indeed a short section in the Cyphernomicon about encrypted open
books.  Unfortunately it doesn't describe it in detail, and since the
hks.net archive is down, I can't look up Eric Hughes' original e-mail on
the topic.  If anyone has a copy of it in his personal archive, please
repost it.  I'm sure other people would be interested as well.

Here is the section from Cyphernomicon:

 12.16.1. Encrypted open books, or anonymous auditing
           - Eric Hughes has worked on a scheme using a kind of blinding
              to do "encrypted open books," whereby observers can verify
              that a bank is balancing its books without more detailed
              looks at individual accounts. (I have my doubts about
              spoofs, attacks, etc., but such are always to be considered
              in any new protocol.)
           - "Kent Hastings wondered how an offshore bank could provide
              assurances to depositors.  I wondered the same thing a few
              months ago, and started working on what Perry calls the
              anonymous auditing problem.  I have what I consider to be
              the core of a solution.
              ...The following is long.... [TCM Note: Too long to include
              here. I am including just enough to convince readers that
              some new sorts of banking ideas may come out of
              cryptography.]
              
              "If we use the contents of the encrypted books at the
              organizational boundary points to create suitable legal
              opbligations, we can mostly ignore what goes on inside of
              the mess of random numbers.  That is, even if double books
              were being kept, the legal obligations created should
              suffice to ensure that everything can be unwound if needed.
              This doesn't prevent networks of corrupt businesses from
              going down all at once, but it does allow networks of
              honest businesses to operate with more assurance of
              honesty." [Eric Hughes,  PROTOCOL: Encrypted Open Books,
              1993-08-16]
  
Wei Dai