Practical applications of homomorphic encryption algorithms?

Question

It appears there there were interesting things going on in cryptography: the first homomorphic encryption scheme appeared recently (explanation, HT). Roughly sp

Answer 1

The biggest application of homomorphic encryption would be in data mining, IMHO. The usage of this algo could solve the problems of both privacy and trend discovery at the same time. For example, say your company hosts it's sales info on some SAS provider. Now, that provider could give you sophisticated data mining services, without you having to actually reveal your real info . Basically, you would be able to send your data to a computation provider, have him utilize his CPU cycles to compute on your behalf, and send you the encrypted data back. That'd be truly fantastic for companies who are looking to move to cloud based systems, but have privacy / IP concerns preventing them from doing so.

Another potential application, on a lower and a more personal level, would be in handling of all kinds of financial data. ilya's example extended can apply to filing of tax returns by your accountant without actually seeing your financial info, credit cards processing etc.

However, I'd hold my excitement till the scheme is tested rigorously and deemed safe. Encryption algos have a notorious habit of failing their first test, going for a revision and repeating the cycle till they are "certified" by some government authority.