Obvious All Along

Robert Hettinga

Translucent Databases
By Peter Wayner
Flyzone Press, 2002
ISBN 0-9675844-1-8

Through many popular books and articles in the New York Times, Peter Wayner
has done more to promote the field of applied financial cryptography, and
in particular open source financial cryptography, than any other author
writing today. His new book, Translucent Databases, from Flyzone Press, is
no exception.

Translucent Databases has all the hallmarks of Wayner's books: clear, easy
to read exposition of the main issues, why they're important, and, in his
technical books, excellently documented code written for the most popular
platforms for the technology in question.

This book in particular should be an instant classic because like all great
books, it takes what should be a very simple idea, encrypted databases, and
expands it to some amazing conclusions.

For a long time now, I've been interested in what I call the geodesic
economy, where all information, including information controlling financial
assets, is fractally "surfacted", like so much grease in soapy dishwater,
as far out into the edges of a ubiquitous internetwork as Moore's Law will
allow, using financial cryptography protocols to secure transactions and
markets on a nominally insecure, but ubiquitous, public internetwork.

People who are familiar with my thinking about such things over the past 8
years will see quite quickly why I think Peter's new book is so important.
Transparent databases represent a way not only to link the batch-settled,
book-entry debit-for-credit world of modern financial operations with a
more simply founded, but much more sophisticated world which uses
cryptographic tokens representing control of various financial and real
assets. They also show us how to actually account for those tokens in such
a fashion that every financial actor in that market, man or machine, can
trust that their bearer certificates are authentic ones, and done in such a
fashion that a given token retains its cryptographic integrity, including
the functionally anonymous characteristics that made it so cheap to use in
the first place.

The singular feature of Wayner's translucent databases is that, like
internet bearer transactions themselves, the cryptography securing data in
them can happen in the client, and not a centrally vulnerable server. More
to the point, by using data stored in this fashion, the data can be
dispersed as far out in the network as... well, Moore's Law allows, in
extremely fast and lightweight files, and, instead of creating summaries of
data for reports, the data can be polled for as close to its source as
possible, instantaneously, in realtime, instead of being rolled up into
increasingly larger batch-processed summaries taking weeks, sometimes
months, to produce and audit.

There are obvious implications for my own particular hobby-horses, like
anonymous but accurate double spend databases for bearer transactions,
where only a simple blinded m-of-n cryptographic hash of a given promise to
pay is necessary to prevent the duplication of that promise to more than
one person at a time. However, for the rest of us :-), Wayner also points
to a whole host of much less esoteric applications in the lots of the usual
places where absolute privacy and extremely authentic information, is at a
premium. Examples for military, medical, and anti-rape databases, for
accounting systems and securities transactions, and even for internet poker
-- the paradigm of completely untrusted parties cooperating for what each
player hopes will be his own, preferably cash, benefit -- are all presented
in clear writing and running code.

There has been a lot of lip-service in the privacy community about "owning"
your own data. Unfortunately, by involving the state at all, these
"advocates" almost always favor inadvertently Draconian political solutions
to the problem presented by the ubiquity of database technology and it's
otherwise beneficial presence in our lives. They usually present this
nonsense as a "sacrifice" for the "greater good" that would make Hayek's
Road to Serfdom look like Lilac Sunday at the local arboretum.

In Translucent Databases, Wayner shows, in precise detail, with code, how
to solve that problem, without trusting lawyers, much less guys with guns.

Though quite a short read, the scope of the book itself is quite
considerable. Wayner starts from simple hashes of data to merely obscure
it, through various kinds of encryption, quantization of data, and even
accounting with encrypted data using what amounts to virtual cumulative
crossfoots like the kind you would see on all good accounting reports. In
so doing, Wayner explains, quite simply, something that people like Eric
Hughes made great, complicated hay out of years ago with gangling theories
of encrypted "open" books.

Ultimately, Wayner really does end up where a lot of us think databases
will be someday, particularly in finance: repositories of data accessible
only by digital bearer tokens using various blind signature protocols,
neatly, and quite literally, "dis-integrating" the ability of databases to
be used against us as a tool of totalitarianism, exemplified most recently
by Simpson Garfinkel in his book Database Nation, and, oddly enough, not
because someone or other wants to strike a blow against the empire, but
simply because it's safer -- and cheaper -- to do that way.

Every database programmer should have a copy of this simple and elegant
book on his reference bookshelf. Particularly if he cares about the
integrity of his data, the liability to the database's owner should
information be misappropriated, and, not least, about freedom itself in a
world of ubiquitous, and, frankly, necessary, stored detail: details about
practically every person on earth, their property and finances, and,
ultimately, everything they do.

Translucent Databases presents a simple, frankly beautiful, solution to
David Brin's world of ubiquitous surveillance, one not requiring, as Brin
seems to want, "trust" of state force-monopolists, much less their lawyers
and apparatchiks.

In fact, it's such an elegant solution that, as Schopenhauer liked to say
about the public acceptance of important new ideas, soon enough, people
will say it was obvious all along.

Robert Hettinga is founder of IBUC, the Internet Bearer Underwriting
Corporation, which will, hopefully, someday, :-), use translucent databases
full of internet bearer certificates to reduce transaction costs by three
orders of magnitude.

R. A. Hettinga <mailto: [EMAIL PROTECTED]>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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