[Part 1] I've been following the concepts of digital cash and encryption, since I read the article in the August 1992 issue of Scientific American on "encrypted signatures." While I've only followed the Digitaliberty area for a few weeks, I can already see a number of points that do (and should!) strongly concern the average savvy individual:
1. How can we translate the freedom afforded by the Internet to ordinary life?
2. How can we keep the government from banning encryption, digital cash, and other systems that will improve our freedom?
A few months ago, I had a truly and quite literally "revolutionary" idea, and I jokingly called it "Assassination Politics": I speculated on the question of whether an organization could be set up to _legally_ announce either that it would be awarding a cash prize to somebody who correctly "predicted" the death of one of a list of violators of rights, usually either government employees, officeholders, or appointees. It could ask for anonymous contributions from the public, and individuals would be able send those contributions using digital cash.
I also speculated that using modern methods of public-key encryption and anonymous "digital cash," it would be possible to make such awards in such a way so that nobody knows who is getting awarded the money, only that the award is being given. Even the organization itself would have no information that could help the authorities find the person responsible for the prediction, let alone the one who caused the death.
It was not my intention to provide such a "tough nut to crack" by arguing the general case, claiming that a person who hires a hitman is not guilty of murder under libertarian principles. Obviously, the problem with the general case is that the victim may be totally innocent under libertarian principles, which would make the killing a crime, leading to the question of whether the person offering the money was himself guilty.
On the contrary; my speculation assumed that the "victim" is a government employee, presumably one who is not merely taking a paycheck of stolen tax dollars, but also is guilty of extra violations of rights beyond this. (Government agents responsible for the Ruby Ridge incident and Waco come to mind.) In receiving such money and in his various acts, he violates the "Non-aggression Principle" (NAP) and thus, presumably, any acts against him are not the initiation of force under libertarian principles.
The organization set up to manage such a system could, presumably, make up a list of people who had seriously violated the NAP, but who would not see justice in our courts due to the fact that their actions were done at the behest of the government. Associated with each name would be a dollar figure, the total amount of money the organization has received as a contribution, which is the amount they would give for correctly "predicting" the person's death, presumably naming the exact date. "Guessers" would formulate their "guess" into a file, encrypt it with the organization's public key, then transmit it to the organization, possibly using methods as untraceable as putting a floppy disk in an envelope and tossing it into a mailbox, but more likely either a cascade of encrypted anonymous remailers, or possibly public-access Internet locations, such as terminals at a local library, etc.
In order to prevent such a system from becoming simply a random unpaid lottery, in which people can randomly guess a name and date (hoping that lightning would strike, as it occasionally does), it would be necessary to deter such random guessing by requiring the "guessers" to include with their "guess" encrypted and untraceable "digital cash," in an amount sufficiently high to make random guessing impractical.
For example, if the target was, say, 50 years old and had a life expectancy of 30 years, or about 10,000 days, the amount of money required to register a guess must be at least 1/10,000th of the amount of the award. In practice, the amount required should be far higher, perhaps as much as 1/1000 of the amount, since you can assume that anybody making a guess would feel sufficiently confident of that guess to risk 1/1000th of his potential reward.
The digital cash would be placed inside the outer "encryption envelope," and could be decrypted using the organization's public key. The prediction itself (including name and date) would be itself in another encryption envelope inside the first one, but it would be encrypted using a key that is only known to the predictor himself. In this way, the organization could decrypt the outer envelope and find the digital cash, but they would have no idea what is being predicted in the innermost envelope, either the name or the date.
If, later, the "prediction" came true, the predictor would presumably send yet another encrypted "envelope" to the organization, containing the decryption key for the previous "prediction" envelope, plus a public key (despite its name, to be used only once!) to be used for encryption of digital cash used as payment for the award. The organization would apply the decryption key to the prediction envelope, discover that it works, then notice that the prediction included was fulfilled on the date stated. The predictor would be, therefore, entitled to the award. Nevertheless, even then nobody would actually know WHO he is!
It doesn't even know if the predictor had anything to do with the outcome of the prediction. If it received these files in the mail, in physical envelopes which had no return address, it would have burned the envelopes before it studied their contents. The result is that even the active cooperation of the organization could not possibly help anyone, including the police, to locate the predictor.)
Also included within this "prediction-fulfilled" encryption envelope would be unsigned (not-yet-valid) "digital cash," which would then be blindly signed by the organization's bank and subsequently encrypted using the public key included. (The public key could also be publicized, to allow members of the public to securely send their comments and, possibly, further grateful remuneration to the predictor, securely.) The resulting encrypted file could be published openly on the Internet, and it could then be decrypted by only one entity: The person who had made that original, accurate prediction. The result is that the recipient would be absolutely untraceable.
The digital cash is then processed by the recipient by "unblinding" it, a principle which is explained in far greater detail by an article in the August 1992 issue of Scientific American. The resulting digital cash is absolutely untraceable to its source.
This overall system achieves a number of goals. First, it totally hides the identity of the predictor to the organization, which makes it unnecessary for any potential predictor to "trust" them to not reveal his name or location. Secondly, it allows the predictor to make his prediction without revealing the actual contents of that prediction until later, when he chooses to, assuring him that his "target" cannot possibly get early warning of his intent. (and "failed" predictions need never be revealed). In fact, he needs never reveal his prediction unless he wants the award. Third, it allows the predictor to anonymously grant his award to anyone else he chooses, since he may give this digital cash to anyone without fear that it will be traced.
For the organization, this system also provides a number of advantages. By hiding the identity of the predictor from even it, the organization cannot be forced to reveal it, in either civil or criminal court. This should also shield the organization from liability, since it will not know the contents of any "prediction" until after it came true. (Even so, the organization would be deliberately kept "poor" so that it would be judgment-proof.) Since presumably most of the laws the organization might be accused of violating would require that the violator have specific or prior knowledge, keeping itself ignorant of as many facts as possible, for as long as possible, would presumably make it very difficult to prosecute.
[end part 1]