Are there any experts in clandestine communications here?
I've written a program that encrypts/decrypts messages using one-time pad type of security. There are 2 versions, actually. One version generates cryptographically secure numbers to a file that is a couple of meg in size (configurable). The generator is not seedable, so the other party would have to have the same key file to read a message.
The other one is less secure, but handy. It can seed off the date, or anything else that changes consistently. The decryption can essentially reproduce the keyfile based on the date/etc. It is less secure, but could be adequate for messages that go stale fast, or are not that sensitive.
My question is, what is a good way to verify trust? If everyone downloaded a copy of the software (even source to modify), how do we know the program didn't fall in the wrong hands? If this were the only message, and it said "get software now. It will be deleted in 1 hour..." then the "enemy" would be SOL if they did not see the message for an hour. They would have lost the opportunity to get the software, and the encryption is virtually impossible to break because it is not based on an algorithm.
The Internet kill switch is a fantasy, but a program that can send/recv text on an arbitrary port number might be handy. There is no way they can block all ports. It would blind the government too.
I think I found my group right here!
Keith, you have a part of the key to an Idea I have for peer to peer banking. I have a rough outline of the system at deefburger.blogspot.com
Some of what I have posted there is rough text. I didn't polish it at all and was using the blog to post some of the idea. That post is a little out dated from what I currently have, but the basic premise is still valid.
My system is a Trust based system. Philosophically analysed, trust is based on memory and consistently truthful query. The system uses distributed storage of trust information that is non encrypted and can be queried on demand. But the value portion of the system is highly encrypted and must use shared keys to unlock.
The idea is that the memory of individual transactions as having been completed with both parties satisfied is a data point for trust. As a community of individuals transact, they build a trust memory in the community at large. As time goes by, and more and more value is transfered between parties, Trust in the community grows, as well as the wealth that is created by the individual participants.
Another key feature of the system is the base. It can use any widely traded commodity as a base for valuation, but uses an ounce of gold as the base value by default. It does not require the holding of the commodity, as the base is used as a unit of measure. Actual holding of specie is allowed but not necessary.
Any wealth accumulated by an individual has a memory in the community at large and so if an individual element is stolen or lost it can be re-created on-the-fly. It is very hard to steal wealth from anyone in this system.
The system is an ad-hoc peer to peer network of Trust elements, called Witnesses, with User controlled elements called Elements on top. The Witnesses do the encryption and communications. Messages are routed between Witnesses.
Would you be interested in hashing out this crazy scheme? I'm a Computer Consultant but not much of a code jockey. My love is Philosophy and Applying it.
Most People, are Mostly good, Most of the time.
Is there any way of extending the concept into making an economic entity into its own bank. We know credit expansion causes booms and busts and global credit expansions boom and bust the whole economy. I read a paper on here that implied that booms and busts could even be caused by the time preference differential inherent in banking. For example, a Demand Deposit is due at any time by the bank, but the loans lent out are due in several years. Credit expansion can even occur in 100% reserve setting if short term bonds are used to back long term loans. With the Internet, banking as such is an obsolete concept. If a company could issue its own medium of exchange, clearing houses could convert those credits to the value of the credits issued by other companies in the system. Any business cycles would be limited to very small portions of the economy.
I've been trying to theorize what to use as a universal base in such a system and you seem to have the answer. I'm working out all the details of how this would work, but I think what you have is similar to what I am thinking. BTW: I have plenty of coding experience...
"I've written a program that encrypts/decrypts messages using one-time pad type of security. There are 2 versions, actually. One version generates cryptographically secure numbers to a file that is a couple of meg in size (configurable). The generator is not seedable, so the other party would have to have the same key file to read a message."
If the key file was put on a USB stick it would be ultra secure. Could the software be designed such that you could distribute the software freely and sell the key files separately?
I wouldn't sell the keys. I would make it so that they could be generated by the user or recreated by the user with the correct pin and password. The idea here is that the user could re-generate their entire or at least the majority of their portfolio from the memory of transaction stored in all the other elements they transacted with. This feature solves the problem of theft by making the stolen device unusable except with the correct pin and password, and so the replacement element can be made live before the stolen unit is cracked, Then the history can be changed by the proper user by doing a key change on the newly created and unlocked element. The stolen element would not have the new keys even if it were unlocked.
In my system, each user is a "bank" unto themselves. The system is basically all the other elements that that user transacted with. The memory is distributed among the community "system" of "banks". With each element using a highly encrypted user layer, as well as an open source witness layer for trust information, the system supports itself.
Have you looked at deefburger.blogspot.com? ITES and EVES are basically the same system, with EVES being an entirely electronic version of ITES.
The design goal of the project was to solve all the problems of gold money hard currency using modern technology and the modern attitude about electronic funds transfer.
Sound Money (gold or silver coin) problem areas:
Cetralization of monetary media creation and control.
Theft and carry loss.
Advantages of Sound Money:
Trust is built in
Value stability and Measurement stability.
Universally acceptable medium
No bank needed for exchange as third party arbiter of value.
The hardest problem to solve was the trust problem. All the others were fairly simple once that one was solved. This is why originally I called it Individual Trust Exchange System or ITES. The trust issue is tricky. It is what breaks a bank now when that bank fails. Part of the bank's problem in failure is the inability to pay back because they are leveraged, but this only affects it on the surface. What is more important to the community that uses it is the loss of trust. That loss of trust will ultimately close the doors of the bank even if they are financially sound. The trust that we use today is held by the reputaion of the banking system used. This is why the banks refuse to do the tax collecting themselves. If they did, they would lose the trust of the populace and no one would put their money in the bank because they would not put their TRUST in that bank!
Instead, when the FED was created, the bank system was set up to remain separate in the minds of the people so that they could be "trusted" with the money. The IRS was created at the same time to be the tax collector. The only reason for this is that if the FED used its built in ability to directly access the funds on deposit for tax collection, the banks coffers would be emptied overnight. Why? No trust.
Trust is what makes or breaks a bank or banking system. Everything else is just currency and exchange.
There are two things I don't understand about your system. Let me preface my question by this statement -- money is a medium of exchange.
1. You value goods with fiat gold based on local currency. If there is local currency isn't there local banking as banks would have to issue the notes?
2. Why does not completing an exchange imply bad trust? If I get a quote for a good but can't find a price that satisfies me that seems to be a mark against me in your system. Isn't the trust in a medium of exchange the trust that the money can be exchanged as a universal good?
I like the idea overall.
I am enjoying Deef's idea as well. Where has he gone?
Question number 1: The system can operate independent of local currency. If the local currency is exchanged, then the exchange rate is agreed upon during the transaction. As a reference, the London spot price that day could be used.
Question number 2: An incomplete exchange is incomplete. Until it is either withdrawn or satisfied it remains an error. There are are only two possible outcomes that are not errors, 1:1 which is a complete transaction, and 0:0 which is an aborted transaction. Neither is an error. Only 0:1 or 1:0 remains as either an error or incomplete. The system does not judge, just records and remembers.
I've been busy with Physics and Metaphysics projects. I do monitor Mises any way. Thanks for the feedback.
A decade ago I worked for gold-based payment systems like e-gold. Even back then we were talking about how online commodity-based payments would revolutionize money and free people from the state. We read Cryptonomicon and said, "Yeah, that's the future!"
Then it turned out that the only significant market was Ponzi schemes, who were attracted the those systems' non-repudiability rather than their commodity backing. Don't get me wrong, I'd love to think that things might have changed. But have they?