Cryptographic Commitment and Simultaneous Exchange

Abstract

Simultaneous exchange of valuable secrets is problematic without use of a trusted intermediary. Examples include trade between strangers involving the transfer of property rights at a distance by exchange of emails, and simultaneous signing of contracts. There is a danger that the first person to commit to the transaction will lose everything if the other party does not reciprocate. We study information exchange mechanisms that establish credible simultaneous commitment and implement individually rational exchange without using an intermediary.