Abstract: A system and method for implementing one or more specific purpose rule-based n-bit virtual processing machines. Specific purposes include, but are not limited to, encryption, compression, and arbitrary precision arithmetic. Each virtual machine consists of a command processor, a rule-base, and an interface between the command processor and the rule-base. Each of the elements of a specific purpose rule-based n-bit virtual machine--the command processor, the rule-base, and the rule-base interface--is preferably implemented as software. In the preferred embodiment, the system uses a stored rule-base as its instruction set and provides for input and output in the form of variable length bit strings of length n where n is any number greater than zero. Each of the rules within the rule-base performs one or more binary string operations against one or more variable length n-bit strings.