There's a little bit more to it than that. Someone watching that transaction between you and your friend doesn't learn anything either, since your friend could

There's a little bit more to it than that. Someone watching that transaction between you and your friend doesn't learn anything either, since your friend could be colluding with you and placing a printed out piece of paper with waldo on it when your friend would say "show me you know where waldo is" and the book when he would say "show me there's a book under there"