Essay About Key Technology Issues And Private-Key Encryption Technologies

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Electronic Commerce
Initially, the Internet was designed to be used by government and academic users,
but now it is rapidly becoming commercialized. It has on-line “shops”, even
electronic “shopping malls”. Customers, browsing at their computers, can view
products, read descriptions, and sometimes even try samples. What they lack is
the means to buy from their keyboard, on impulse. They could pay by credit card,
transmitting the necessary data by modem; but intercepting messages on the
Internet is trivially easy for a smart hacker, so sending a credit-card number
in an unscrambled message is inviting trouble. It would be relatively safe to
send a credit card number encrypted with a hard-to-break code. That would
require either a general adoption across the internet of standard encoding
protocols, or the making of prior arrangements between buyers and sellers. Both
consumers and merchants could see a windfall if these problems are solved. For
merchants, a secure and easily divisible supply of electronic money will
motivate more Internet surfers to become on-line shoppers. Electronic money
will also make it easier for smaller businesses to achieve a level of automation
already enjoyed by many large corporations whose Electronic Data Interchange
heritage means streams of electronic bits now flow instead of cash in back-end
financial processes. We need to resolve four key technology issues before
consumers and merchants anoint electric money with the same real and perceived
values as our tangible bills and coins. These four key areas are: Security,
Authentication, Anonymity, and Divisibility.
Commercial R&D departments and university labs are developing measures to
address security for both Internet and private-network transactions. The
venerable answer to securing sensitive information, like credit-card numbers, is
to encrypt the data before you send it out. MITs Kerberos, which is named
after the three-headed watchdog of Greek mythology, is one of the best-known-
private-key encryption technologies. It creates an encrypted data packet,
called a ticket, which securely identifies the user. To make a purchase, you
generate the ticket during a series of coded messages you exchange with a
Kerberos server, which sits between your computer system and the one you are
communicating with. These latter two systems share a secret key with the
Kerberos server to protect information from prying eyes and to assure that your
data has not been altered during the transmission. But this technology has a
potentially weak link: Breach the server, and the watchdog rolls over and plays
dead. An alternative to private-key cryptography is a public-key system that
directly connects consumers and merchants. Businesses need two keys in public-
key encryption: one to encrypt, the other to decrypt the message. Everyone who
expects to receive a message publishes a key. To send digital cash to someone,
you look up the public key and use the algorithm to encrypt the payment. The
recipient then uses the private half of the key pair for decryption. Although
encryption fortifies our electronic transaction against thieves, there is a
cost: The processing overhead of encryption/decryption makes high-volume, low-
volume payments prohibitively expensive. Processing time for a reasonably safe
digital signature conspires against keeping costs per transaction low.
Depending on key length, an average machine can only sign between twenty and
fifty messages per second. Decryption is faster. One way to factor out the
overhead is to use a trustee organization, one that collects batches of small
transaction before passing them on to the credit-card organization for
processing. First Virtual, an Internet-based banking organization, relies on
this approach. Consumers register their credit cards with First Virtual over
the phone to eliminate security risks, and from then on, they uses personal
identification numbers (PINs) to make purchases.
Encryption may help make the electric money more secure, but we also need
guarantees that no one alters the data–most notably the denomination of the
currency–at either end of the transaction. One form of verification is secure
hash algorithms, which represent a large file of multiple megabytes with a
relatively short number consisting of a few hundred bits. We use the surrogate
file–whose smaller size saves computing time–to verify the integrity of a
larger block of data. Hash algorithms work similarly to the checksums used in
communications protocols: The sender adds up all the bytes in a data packet and
appends