> problem is that the algorithm itself is what makes the system strong. once revealed in a white paper, the whole thing is useless

This is a deal-breaker. Your system is not strong if you rely on other people not knowing how it works. Nobody will use it because you can't convince them it's worth anything, you can't distribute it in code. I don't mean to sound like a jerk, but again this is literally 19th century stuff: https://en.wikipedia.org/wiki/Kerckhoffs%27s_principle .