my friend and i have been working on something like this, which may have the answer to the key revocation problem. in our system (which we are calling dewdrop

my friend and i have been working on something like this, which may have the answer to the key revocation problem. in our system (which we are calling dewdrop - https://github.com/neyer/dewdrop https://github.com/neyer/dewdrop - still very much a work in progress) you don't pass coins around; you make statements. you can make statements of the form 'i trust person X', and then statements made by person X are given more weight for you, as are statements by those X trusts, etc. in our system, key revocation would be just another statement. if i say "hey this is mark, my phone was captured at this time and these N transactions are invalid", my friends - if they believe me - can say 'i believe he is telling the truth here.' everyone who trusts us will then ignore statements made from that address during that time period. the statements will still be on the network, but people who trust me and my friends will not believe i made them. because there is no transfer of coins - just statements that anyone can make - there's no issue of 'do we really need to revoke the key?' people who trust me, and who trust my friends, will see those statements as having been revoked; people who don't trust me will need to decide for themselves on this.