> How chaining is different then cross-certification ?.

Chaining is a single link from an End Entity up to a root, or trust
anchor:
        A --> CA1 --> CA2 --> ... --> Root

(where a-->b means "B has signed the certificate for A")

Cross-certification is when you have multiple chains that intersect:
        A --> CA1 --> CA2  --> ... --> Root
                                       |  ^
                                       v  |
        B --> CAi --> CAii --> ... --> Root'

If B presents a cert to A, A can go up the B chain until it gets to
Root' which is sees has signed by Root, which is one of A's trust
anchors, so A trust B's credentials.  (For convenience, we will ignore
the complications added by CRL's or OCSP.)

> If cross-certification means then two CAs sign each other then how we can
> scale to a scenario of more than two CAs in a fully meshed
> cross-certification model ?.

Exactly. :)

The US Government has a project to do this for some of their (Defense
Dept?) PKI's.  I forget the name.  Put a new mega-root and have everyone
cross-certify with that root.  You still get full paths everywhere, but
it's O(2N) instead of O(N**2) certifications.

        /r$
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