The ring of Gyges

There’s a very old story about a shepherd who finds a ring that makes him invisible. It doesn’t take him long to start doing things he’d never have done if anyone could see him. Whoever first told it wanted to ask whether anyone is good when no one’s watching.

A key on a blockchain is a bit like that ring. Whoever has it can move whatever it guards, and the network can’t tell an owner from a thief. When large amounts go missing in this industry, it’s usually not because someone broke the maths. Someone just got hold of a ring.

The natural answer is to give rings only to good people. We don’t think that’s enough, and not because we think badly of anyone. A design that only works when everyone behaves will fail on the day someone doesn’t, or gets tricked, or makes an honest mistake.

So we try to make sure there’s no one to hand the ring to. Keys are made inside sealed hardware and stay there. Nobody, us included, ever sees them. The hardware only lends them to software it recognises, and that software is something anyone can rebuild and check. Everything about the system can be looked at except the one thing that matters.

It’s slower to work this way. But the question stops being “who do you trust?” and becomes “who could see it?”, and we’d like the answer to be nobody.