How to generate and exchange secrets

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Abstract
In this paper we introduce a new tool for controlling the knowledge transfer process in cryptographic protocol design. It is applied to solve a general class of problems which include most of the two-party cryptographic problems in the literature. Specifically, we show how two parties A and B can interactively generate a random integer N = p·q such that its secret, i.e., the prime factors (p, q), is hidden from either party individually but is recoverable jointly if desired. This can be utilized to give a protocol for two parties with private values i and j to compute any polynomially computable functions f(i,j) and g(i,j) with minimal knowledge transfer and a strong fairness property. As a special case, A and B can exchange a pair of secrets sA, sB, e.g. the factorization of an integer and a Hamiltonian circuit in a graph, in such a way that sA becomes computable by B when and only when sB becomes computable by A. All these results are proved assuming only that the problem of factoring large intergers is computationally intractable.

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