One of the needs of social or business interaction is the authentication of the principals involved in it. Just because a man says his name is John Smith does not mean that he indeed is John Smith; the fact must be proved in other ways. In the real world, the authentication of a person's identity is achieved in various ways--using a birth certificate, a state-issued picture ID, a passport, a social security card, knowledge of one's mother's maiden name, and so on. A document can be authenticated as having been authored or agreed to by a principal, using a simple handwritten signature--this age-old technique is still, for the most part, very reliable. If additional verification is needed, then the signature can be backed up with attestation using a notary public, or a sworn affidavit, or similar established legal procedures.

In an online environment where the principal in an...