Shamir's Secret Sharing Scheme
What is "Secret Sharing"?
Citing from the Wikipedia article about Secret Sharing:
In cryptography, a secret sharing scheme is a method for distributing a secret amongst a group of participants, each of which is allocated a share of the secret. The secret can only be reconstructed when the shares are combined together; individual shares are of no use on their own.
More formally, in a secret sharing scheme there is one dealer and n players. The dealer gives a secret to the players, but only when specific conditions are fulfilled. The dealer accomplishes this by giving each player a share in such a way that any group of t (for threshold) or more players can together reconstruct the secret but no group of less than t players can. Such a system is called a (t,n)-threshold scheme.
A popular technique to implement threshold schemes uses polynomial interpolation ("Lagrange interpolation"). This method was invented by Adi Shamir in 1979. You can play around with a threshold scheme on the demo page.
Note that Shamir's scheme is provable secure, that means: in a (t,n) scheme one can prove that it makes no difference whether an attacker has t-1 valid shares at his disposal or none at all; as long as he has less than t shares, there is no better option than guessing to find out the secret.