December 2003 - cypherpunks-legacy

Re: Trust through anonymity; time vaults
by Antonomasia 17 Dec '03

17 Dec '03

The time vault suggestion resembles one from Tim May in 1993. Rivest Shamir and Wagner also addressed time vaults by requiring a computation (resistant to parallel calculation and of reasonably well-defined length) to decrypt the message. under http://theory.lcs.mit.edu/~rivest/ -- ############################################################## # Antonomasia ant(a)notatla.demon.co.uk # # See http://www.notatla.demon.co.uk/ # ##############################################################

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Description of the RC2(r) Encryption Algorithm
by Anonymous 17 Dec '03

17 Dec '03

Ron Rivest MIT Laboratory for Computer Science and RSA Data Security, Inc. November 1997 Request for Comments: Category: Informational A Description of the RC2(r) Encryption Algorithm Status of this Memo This memo provides information for the Internet community. This memo does not specify an Internet standard of any kind. Distribution of this memo is unlimited. This document is an Internet-Draft. Internet-Drafts are working documents of the Internet Engineering Task Force (IETF), its areas, and its working groups. Note that other groups may also distribute working documents as Internet-Drafts. Internet-Drafts are draft documents valid for a maximum of six months and may be updated, replaced, or obsoleted by other documents at any time. It is inappropriate to use Internet-Drafts as reference material or to cite them other than as "work in progress." To learn the current status of any Internet-Draft, please check the "1id-abstracts.txt" listing contained in the Internet-Drafts Shadow Directories on ftp.is.co.za (Africa), nic.nordu.net (Europe), munnari.oz.au (Pacific Rim), ds.internic.net (US East Coast), or ftp.isi.edu (US West Coast). 1. Introduction This draft is an RSA Laboratories Technical Note. It is meant for informational use by the Internet community. This memo describes a conventional (secret-key) block encryption algorithm, called RC2, which may be considered as a proposal for a DES replacement. The input and output block sizes are 64 bits each. The key size is variable, from one byte up to 128 bytes, although the current implementation uses eight bytes. The algorithm is designed to be easy to implement on 16-bit microprocessors. On an IBM AT, the encryption runs about twice as fast as DES (assuming that key expansion has been done). 1.1 Algorithm description We use the term "word" to denote a 16-bit quantity. The symbol + will denote twos-complement addition. The symbol & will denote the bitwise "and" operation. The term XOR will denote the bitwise "exclusive-or" operation. The symbol ~ will denote bitwise complement. The symbol ^ will denote the exponentiation operation. The term MOD will denote the modulo operation. There are three separate algorithms involved: Key expansion. This takes a (variable-length) input key and produces an expanded key consisting of 64 words K[0],...,K[63]. Encryption. This takes a 64-bit input quantity stored in words R[0], ..., R[3] and encrypts it "in place" (the result is left in R[0], ..., R[3]). Decryption. The inverse operation to encryption. 2. Key expansion Since we will be dealing with eight-bit byte operations as well as 16-bit word operations, we will use two alternative notations for referring to the key buffer: For word operations, we will refer to the positions of the buffer as K[0], ..., K[63]; each K[i] is a 16-bit word. For byte operations, we will refer to the key buffer as L[0], ..., L[127]; each L[i] is an eight-bit byte. These are alternative views of the same data buffer. At all times it will be true that K[i] = L[2*i] + 256*L[2*i+1]. (Note that the low-order byte of each K word is given before the high-order byte.) We will assume that exactly T bytes of key are supplied, for some T in the range 1 <= T <= 128. (Our current implementation uses T = 8.) However, regardless of T, the algorithm has a maximum effective key length in bits, denoted T1. That is, the search space is 2^(8*T), or 2^T1, whichever is smaller. The purpose of the key-expansion algorithm is to modify the key buffer so that each bit of the expanded key depends in a complicated way on every bit of the supplied input key. The key expansion algorithm begins by placing the supplied T-byte key into bytes L[0], ..., L[T-1] of the key buffer. The key expansion algorithm then computes the effective key length in bytes T8 and a mask TM based on the effective key length in bits T1. It uses the following operations: T8 = (T1+7)/8; TM = 255 MOD 2^(8 + T1 - 8*T8); Thus TM has its 8 - (8*T8 - T1) least significant bits set. For example, with an effective key length of 64 bits, T1 = 64, T8 = 8 and TM = 0xff. With an effective key length of 63 bits, T1 = 63, T8 = 8 and TM = 0x7f. Here PITABLE[0], ..., PITABLE[255] is an array of "random" bytes based on the digits of PI = 3.14159... . More precisely, the array PITABLE is a random permutation of the values 0, ..., 255. Here is the PITABLE in hexadecimal notation: 0 1 2 3 4 5 6 7 8 9 a b c d e f 00: d9 78 f9 c4 19 dd b5 ed 28 e9 fd 79 4a a0 d8 9d 10: c6 7e 37 83 2b 76 53 8e 62 4c 64 88 44 8b fb a2 20: 17 9a 59 f5 87 b3 4f 13 61 45 6d 8d 09 81 7d 32 30: bd 8f 40 eb 86 b7 7b 0b f0 95 21 22 5c 6b 4e 82 40: 54 d6 65 93 ce 60 b2 1c 73 56 c0 14 a7 8c f1 dc 50: 12 75 ca 1f 3b be e4 d1 42 3d d4 30 a3 3c b6 26 60: 6f bf 0e da 46 69 07 57 27 f2 1d 9b bc 94 43 03 70: f8 11 c7 f6 90 ef 3e e7 06 c3 d5 2f c8 66 1e d7 80: 08 e8 ea de 80 52 ee f7 84 aa 72 ac 35 4d 6a 2a 90: 96 1a d2 71 5a 15 49 74 4b 9f d0 5e 04 18 a4 ec a0: c2 e0 41 6e 0f 51 cb cc 24 91 af 50 a1 f4 70 39 b0: 99 7c 3a 85 23 b8 b4 7a fc 02 36 5b 25 55 97 31 c0: 2d 5d fa 98 e3 8a 92 ae 05 df 29 10 67 6c ba c9 d0: d3 00 e6 cf e1 9e a8 2c 63 16 01 3f 58 e2 89 a9 e0: 0d 38 34 1b ab 33 ff b0 bb 48 0c 5f b9 b1 cd 2e f0: c5 f3 db 47 e5 a5 9c 77 0a a6 20 68 fe 7f c1 ad The key expansion operation consists of the following two loops and intermediate step: for i = T, T+1, ..., 127 do L[i] = PITABLE[L[i-1] + L[i-T]]; L[128-T8] = PITABLE[L[128-T8] & TM]; for i = 127-T8, ..., 0 do L[i] = PITABLE[L[i+1] XOR L[i+T8]]; (In the first loop, the addition of L[i-1] and L[i-T] is performed modulo 256.) The "effective key" consists of the values L[128-T8],..., L[127]. The intermediate step's bitwise "and" operation reduces the search space for L[128-T8] so that the effective number of key bits is T1. The expanded key depends only on the effective key bits, regardless of the supplied key K. Since the expanded key is not itself modified during encryption or decryption, as a pragmatic matter one can expand the key just once when encrypting or decrypting a large block of data. 3. Encryption algorithm The encryption operation is defined in terms of primitive "mix" and "mash" operations. Here the expression "x rol k" denotes the 16-bit word x rotated left by k bits, with the bits shifted out the top end entering the bottom end. 3.1 Mix up R[i] The primitive "Mix up R[i]" operation is defined as follows, where s[0] is 1, s[1] is 2, s[2] is 3, and s[3] is 5, and where the indices of the array R are always to be considered "modulo 4," so that R[i-1] refers to R[3] if i is 0 (these values are "wrapped around" so that R always has a subscript in the range 0 to 3 inclusive): R[i] = R[i] + K[j] + (R[i-1] & R[i-2]) + ((~R[i-1]) & R[i-3]); j = j + 1; R[i] = R[i] rol s[i]; In words: The next key word K[j] is added to R[i], and j is advanced. Then R[i-1] is used to create a "composite" word which is added to R[i]. The composite word is identical with R[i-2] in those positions where R[i-1] is one, and identical to R[i-3] in those positions where R[i-1] is zero. Then R[i] is rotated left by s[i] bits (bits rotated out the left end of R[i] are brought back in at the right). Here j is a "global" variable so that K[j] is always the first key word in the expanded key which has not yet been used in a "mix" operation. 3.2 Mixing round A "mixing round" consists of the following operations: Mix up R[0] Mix up R[1] Mix up R[2] Mix up R[3] 3.3 Mash R[i] The primitive "Mash R[i]" operation is defined as follows (using the previous conventions regarding subscripts for R): R[i] = R[i] + K[R[i-1] & 63]; In words: R[i] is "mashed" by adding to it one of the words of the expanded key. The key word to be used is determined by looking at the low-order six bits of R[i-1], and using that as an index into the key array K. 3.4 Mashing round A "mashing round" consists of: Mash R[0] Mash R[1] Mash R[2] Mash R[3] 3.5 Encryption operation The entire encryption operation can now be described as follows. Here j is a global integer variable which is affected by the mixing operations. 1. Initialize words R[0], ..., R[3] to contain the 64-bit input value. 2. Expand the key, so that words K[0], ..., K[63] become defined. 3. Initialize j to zero. 4. Perform five mixing rounds. 5. Perform one mashing round. 6. Perform six mixing rounds. 7. Perform one mashing round. 8. Perform five mixing rounds. Note that each mixing round uses four key words, and that there are 16 mixing rounds altogether, so that each key word is used exactly once in a mixing round. The mashing rounds will refer to up to eight of the key words in a data-dependent manner. (There may be repetitions, and the actual set of words referred to will vary from encryption to encryption.) 4. Decryption algorithm The decryption operation is defined in terms of primitive operations that undo the "mix" and "mash" operations of the encryption algorithm. They are named "r-mix" and "r-mash" (r- denotes the reverse operation). Here the expression "x ror k" denotes the 16-bit word x rotated right by k bits, with the bits shifted out the bottom end entering the top end. 4.1 R-Mix up R[i] The primitive "R-Mix up R[i]" operation is defined as follows, where s[0] is 1, s[1] is 2, s[2] is 3, and s[3] is 5, and where the indices of the array R are always to be considered "modulo 4," so that R[i-1] refers to R[3] if i is 0 (these values are "wrapped around" so that R always has a subscript in the range 0 to 3 inclusive): R[i] = R[i] ror s[i]; R[i] = R[i] - K[j] - (R[i-1] & R[i-2]) - ((~R[i-1]) & R[i-3]); j = j - 1; In words: R[i] is rotated right by s[i] bits (bits rotated out the right end of R[i] are brought back in at the left). Here j is a "global" variable so that K[j] is always the key word with greatest index in the expanded key which has not yet been used in a "r-mix" operation. The key word K[j] is subtracted from R[i], and j is decremented. R[i-1] is used to create a "composite" word which is subtracted from R[i]. The composite word is identical with R[i-2] in those positions where R[i-1] is one, and identical to R[i-3] in those positions where R[i-1] is zero. 4.2 R-Mixing round An "r-mixing round" consists of the following operations: R-Mix up R[3] R-Mix up R[2] R-Mix up R[1] R-Mix up R[0] 4.3 R-Mash R[i] The primitive "R-Mash R[i]" operation is defined as follows (using the previous conventions regarding subscripts for R): R[i] = R[i] - K[R[i-1] & 63]; In words: R[i] is "r-mashed" by subtracting from it one of the words of the expanded key. The key word to be used is determined by looking at the low-order six bits of R[i-1], and using that as an index into the key array K. 4.4 R-Mashing round An "r-mashing round" consists of: R-Mash R[3] R-Mash R[2] R-Mash R[1] R-Mash R[0] 4.5 Decryption operation The entire decryption operation can now be described as follows. Here j is a global integer variable which is affected by the mixing operations. 1. Initialize words R[0], ..., R[3] to contain the 64-bit ciphertext value. 2. Expand the key, so that words K[0], ..., K[63] become defined. 3. Initialize j to 63. 4. Perform five r-mixing rounds. 5. Perform one r-mashing round. 6. Perform six r-mixing rounds. 7. Perform one r-mashing round. 8. Perform five r-mixing rounds. 5. Test vectors Test vectors for encryption with RC2 are provided below. All quantities are given in hexadecimal notation. Key length (bytes) = 8 Effective key length (bits) = 63 Key = 00000000 00000000 Plaintext = 00000000 00000000 Ciphertext = ebb773f9 93278eff Key length (bytes) = 8 Effective key length (bits) = 64 Key = ffffffff ffffffff Plaintext = ffffffff ffffffff Ciphertext = 278b27e4 2e2f0d49 Key length (bytes) = 8 Effective key length (bits) = 64 Key = 30000000 00000000 Plaintext = 10000000 00000001 Ciphertext = 30649edf 9be7d2c2 Key length (bytes) = 1 Effective key length (bits) = 64 Key = 88 Plaintext = 00000000 00000000 Ciphertext = 61a8a244 adacccf0 Key length (bytes) = 7 Effective key length (bits) = 64 Key = 88bca90e 90875a Plaintext = 00000000 00000000 Ciphertext = 6ccf4308 974c267f Key length (bytes) = 16 Effective key length (bits) = 64 Key = 88bca90e 90875a7f 0f79c384 627bafb2 Plaintext = 00000000 00000000 Ciphertext = 1a807d27 2bbe5db1 Key length (bytes) = 16 Effective key length (bits) = 128 Key = 88bca90e 90875a7f 0f79c384 627bafb2 Plaintext = 00000000 00000000 Ciphertext = 2269552a b0f85ca6 Key length (bytes) = 33 Effective key length (bits) = 129 Key = 88bca90e 90875a7f 0f79c384 627bafb2 16f80a6f 85920584 c42fceb0 be255daf 1e Plaintext = 00000000 00000000 Ciphertext = 5b78d3a4 3dfff1f1 6. RC2 Algorithm Object Identifier The Object Identifier for RC2 in cipher block chaining mode is rc2CBC OBJECT IDENTIFIER ::= {iso(1) member-body(2) US(840) rsadsi(113549) encryptionAlgorithm(3) 2} RC2-CBC takes parameters RC2-CBCParameter ::= CHOICE { iv IV, params SEQUENCE { version RC2Version, iv IV } } where IV ::= OCTET STRING -- 8 octets RC2Version ::= INTEGER -- 1-1024 RC2 in CBC mode has two parameters: an 8-byte initialization vector (IV) and a version number in the range 1-1024 which specifies in a roundabout manner the number of effective key bits to be used for the RC2 encryption/decryption. The correspondence between effective key bits and version number is as follows: 1. If the number EKB of effective key bits is in the range 1-255, then the version number is given by Table[EKB], where the 256-byte translation table Table[] is specified below. Table[] specifies a permutation on the numbers 0-255; note that it is not the same table that appears in the key expansion phase of RC2. 2. If the number EKB of effective key bits is in the range 256-1024, then the version number is simply EKB. The default number of effective key bits for RC2 is 32. If RC2-CBC is being performed with 32 effective key bits, the parameters should be supplied as a simple IV, rather than as a SEQUENCE containing a version and an IV. 0 1 2 3 4 5 6 7 8 9 a b c d e f 00: bd 56 ea f2 a2 f1 ac 2a b0 93 d1 9c 1b 33 fd d0 10: 30 04 b6 dc 7d df 32 4b f7 cb 45 9b 31 bb 21 5a 20: 41 9f e1 d9 4a 4d 9e da a0 68 2c c3 27 5f 80 36 30: 3e ee fb 95 1a fe ce a8 34 a9 13 f0 a6 3f d8 0c 40: 78 24 af 23 52 c1 67 17 f5 66 90 e7 e8 07 b8 60 50: 48 e6 1e 53 f3 92 a4 72 8c 08 15 6e 86 00 84 fa 60: f4 7f 8a 42 19 f6 db cd 14 8d 50 12 ba 3c 06 4e 70: ec b3 35 11 a1 88 8e 2b 94 99 b7 71 74 d3 e4 bf 80: 3a de 96 0e bc 0a ed 77 fc 37 6b 03 79 89 62 c6 90: d7 c0 d2 7c 6a 8b 22 a3 5b 05 5d 02 75 d5 61 e3 a0: 18 8f 55 51 ad 1f 0b 5e 85 e5 c2 57 63 ca 3d 6c b0: b4 c5 cc 70 b2 91 59 0d 47 20 c8 4f 58 e0 01 e2 c0: 16 38 c4 6f 3b 0f 65 46 be 7e 2d 7b 82 f9 40 b5 d0: 1d 73 f8 eb 26 c7 87 97 25 54 b1 28 aa 98 9d a5 e0: 64 6d 7a d4 10 81 44 ef 49 d6 ae 2e dd 76 5c 2f f0: a7 1c c9 09 69 9a 83 cf 29 39 b9 e9 4c ff 43 ab A. Intellectual Property Notice RC2 is a registered trademark of RSA Data Security, Inc. RSA's copyrighted RC2 software is available under license from RSA Data Security, Inc. B. Author's Address Ron Rivest RSA Laboratories 100 Marine Parkway, #500 Redwood City, CA 94065 USA (650) 595-7703 rsa-labs(a)rsa.com

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Re: Spam
by Secret Squirrel 17 Dec '03

17 Dec '03

Matthew L Bennett <lord_buttmonkey(a)juno.com> wrote: >>I'm hoping you guys would know where I could find out >>more about this individual -- I'm hoping that he does >>in fact buy his service from someone else, and if so, >>I'm not sure how to find that out. If he doesn't, is >>there anything I can do? > ^^^^^^^^^^^^^^^^^^^^^^^^^ > >Yeah, there is. > >Delete the friggin e-mail like a sensible person. > >I get a lot of spam every day, but I just delete it and go on with my >life. Since even many of the major sites these days seem to be run by a bunch of idiots who don't care that they destroy the network so long as they make a buck. 1) Trash mail from throwaway account providers like Juno (which I notice you're using), Hotmail, AOL, Prodigy, MSN, and anybody who offers something like a "fifty hours free spamming" policy. 2) Trash mail from chronic problem sites like AGIS, Earthlink, Worldnet, and their ilk. 3) If you get a flame for a civilized spam complaint (zippo.com did this to me) trash the mail from the site on the grounds that they're idiots. 4) If you get an incredibly stupid set of responses like I got from IBM today kill mail from them on the grounds that they have no idea what they're doing. 5) If it comes in with an obviously forged address then trash it. This has the possibly beneficial side effect of killing mail from "legitimate" users who purposefully use invalid addresses. 6) If it uses a relay site in one domain but comes from another trash it. A good example would be spam mail which is relayed off of someplace.com.au but has a "From" header which points to someplace.edu.tw, and has some other received lines which point to a dialup at MCI. 7) If it overuses punctuation in the subject line such as "!!!!!" then trash it. 8) If it comes in with a bunch of bogus IP addresses in the header then trash it. 9) If it's in HTML then trash it. 10) If it has lines over 80 characters nuke it. 11) If it comes in more than twice nuke it.

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unit1.html
by Jim Choate 17 Dec '03

17 Dec '03

Unit 1: The Scope and Method of Economics [INLINE] UNDER CONSTRUCTION Read "Case and Fair": Chapter 1 - pages 1-20. _________________________________________________________________ A. Definition of Economics Economics is the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. The key word in this definition is "choose". Economics is a behavioral science. In large measure it is the study of how people make choices. _________________________________________________________________ B. Why study economics? 1. To learn a way of thinking: This summer we are going to learn to think like economists - to use tools that will help us analyze complex situations in the real world of economics. 2. To understand society: Past and present economic decisions have an influence on the character of life in a society. 3. To understand global affairs: Understanding international relations begins with knowledge of the economic links among countries. 4. To be an informed voter: When you participate in the political process, you are voting on issues that require a basic understanding of economics. _________________________________________________________________ C. The difference between micro and macro economics Microeconomics deals with the functioning of individual industries and the behavior of individual economic decision-making units - business firms and households. It explores the decisions that individual businesses and consumers make - firms' choices about what to produce and how much to charge, and households' choices about what and how much to buy. Macro economics looks at the economy as a whole. Instead of trying to understand what determines the output of a single firm or industry, or the consumption patterns of a single household or group of house holds, it examines the factors that determine national output and income. While micro economics focuses on individual product prices, macro economics looks at the overall price level and its behavior over time. Micro economics questions how many people will be hired or laid off in a particular industry and the factors that determine how much labor a firm or industry will hire. Macro economics deals with aggregate employment and unemployment: how many jobs exist in the economy as a whole, and how many people are willing to work but unable to find jobs.. We are going to be using this word "aggregate" a lot. It refers to the behavior of firms and households taken together. For example, aggregate consumption refers to the consumption of all the households in the economy; aggregate investment refers to the total investment made by all firms in the economy. There are some topics which micro and macro economics share. For example, the study of how government policy affects the economy. However, again micro economics looks at these effects on the level of the individual firm or household, macro economics considers the effects of policy on the economy as a whole.. The micro economic foundations of macro economics. There is also another important relationship between the two branches of economics and this is what is called the micro economic foundations of macro economics. This is a fairly new development and one which is trying to reconcile the assumptions and principles of micro economic analysis with efforts to understand the economy as a whole. For example, in efforts to understand inflation, macro economists are now trying to include micro economic ideas about the way that prices adjust to changes in supply and demand.. _________________________________________________________________ D. The relationship between economics and social philosophy. One of the first economists was an Englishman by the name of Adam Smith. (Some would say he was the first economist.) Born in the early part of the 18th century, Smith developed the idea of the "invisible hand" and was the first to describe the relationship between supply and demand in a free market economy. He described himself as a "social philosopher". Social philosophy is concerned with fairness. It deals with questions such as: Why are some people rich and others poor? Is it fair that 90% of the country's wealth is controlled by 5% of the population? Is the progressive income tax, which taxes a higher proportion of the income of the wealthy, fair? These questions are still relevant and are the subject of economic policy. _________________________________________________________________ E. Economic Policy A policy is a plan that guides action. An example of an economic policy would be the Federal government's plan to keep the economy working at full employment. Anyone can recommend macro economic policies but it is up to governments to implement them. In general we judge the outcomes of any policy according to four criteria: 1. Efficiency: In economics we say that a policy is efficient if it leads to outcomes that help the economy produce what people want at the least possible cost. 2. Equity or fairness: This is obviously hard to define because fairness like beauty depends on who's looking, but in general terms we could say that an economic policy is fair if it leads to outcomes in which the costs and benefits are shared in a way that is proportional to a person's participation. 3. Growth: At the present time economic policies are also judged according to whether or not they lead to increases in output. I say "at present" because some economists are beginning to question the assumption that economic growth is always a good thing. 4. Stability: In economics stability is defined as the condition of the economy in which output is growing at a steady rate, with low inflation and full employment. Currently, the Federal Reserve is defining stability as a growth rate of about 3%, with inflation between 2% and 3% and unemployment between 5% and 6%. _________________________________________________________________ F. What economists do. In addition to making policy recommendations, economists spend a lot of time formulating theories and developing models. These two words have more or less the same meaning in economics that they do in other academic disciplines. A theory is a coherent set of hypotheses which make statements about the way the world works. To illustrate this idea of theory, the text refers to what is known as "the law of demand". This so-called law is really just a well-tested hypothesis which states that when prices fall, people tend to buy more, and vice versa. A theory is said to be "good" if its hypotheses turn out to valid statements about the real world and if it has predictive power. I should say at this point that very few economic theories, particularly in macro economics, have predictive power. A model is just a formal statement of the theory, usually a mathematical statement. Several institutions have built huge models of the US economy and how it works that have hundreds of equations linked together. These big models usually run on computers. When we visit the Federal Reserve in San Francisco we will see one of these models in action. We will also be working with a number of smaller models and a large number of pictures of models. The text points out two common errors that are made when people develop theories or build models. These are: 1. The post hoc fallacy: This mistake is made when someone mistakes an association between two variables for a cause and effect relationship. My favorite example of this is taken from a study done in Holland at the end of WWII which showed a positive relationship between the number of storks inhabiting a certain city and the number of babies born. 2. The fallacy of composition: This has to do with the belief that what is true for the part is also true for the whole. There are many examples of this kind of thinking in economics. For example, we have seen over a very long period of time the benefits of free markets - the efficiencies in individual markets that are created whenever people are free to pursue their own self-interest. However, it might be a mistake to assume that pursuit of one's own self interest was the best thing for society as a whole. You cannot prove a theory. It is important to note that neither theories nor models can ever be proved beyond the shadow of a doubt. The best we can say of a theory is that it is consistent with the facts as currently observed and that it is seems to have predictive power. Another fact about theories is that they are always based on certain assumptions which have to be accepted for the theory to work. For example, in economic theory two of the most important assumptions are (1) that people make rational choices based on analyzing costs and benefits and (2) that people try to maximize utility. Another important assumption that is rarely discussed is that the world of economics can be understood by understanding the behavior of discrete variables. All of these assumptions are now under attack. _________________________________________________________________ G. Other Important Concepts Introduced in Chapter 1 1. Opportunity Cost: This can be understood as the cost of lost opportunities. An example would be the opportunity cost of coming to Skyline this summer. This cost is measured by the wages I could have been earning if I had decided to work instead. The reason that opportunity costs exist is because resources are scarce; it is an especially important concept in economics where we are often trying to measure the costs and benefits of different economic choices, policies, etc. 2. Marginal: This refers to the "last unit" and is also an important factor in making economic choices. For example, suppose the publisher of our textbook is trying to calculate the costs of producing more books. In making this calculation, Prentice Hall would only consider the marginal or additional costs of just these new books. The money they have already spent would be irrelevant. These are the sunk costs and even though they would be included in a calculation of average costs, they wouldn't influence the decision to produce additional books. 3. Markets - free and regulated, efficient and inefficient: Markets can be free or regulated, efficient or inefficient. Most markets in the real economy represent some combination of these qualities. A market is said to be free if buyers and sellers are free to come together and make deals without government interference. A regulated market is one where the government sets at least some of the rules. For example, the stock market is relatively free - people can buy and sell shares of stock without much interference from the government. However, the Securities and Exchange Commission establishes many rules in this market, particularly for companies who wish to sell their stock. An efficient market is one in which there is a very rapid circulation of information and in which profit opportunities are grabbed up almost as soon as they appear. Inefficiencies arise wherever the flow of information is restricted and where people are not free to take advantage of profit opportunities. 4. Ceteris Paribus: This is a Latin phrase which mean "all else equal" and refers to the difficulty of analyzing more than two variables at a time. It is trotted out by economists when they want to emphasize the fact that they are looking at a single relationship, holding everything else constant. For example, "The amount of a good or service that people want is inversely related to the price, ceteris paribus." The things that are held constant in this example are the tastes and preferences of consumers, the availability of substitutes etc. [LINK] Return to Econ 100 Home page [LINK] Problem Set for Unit 1

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BlackNet
by Tim May 17 Dec '03

17 Dec '03

Someone just asked me for an explanation of "BlackNet," as he hadn't heard of it before. There are several places to look: --a Web search on the term, along with "cypherpunks" or "cryptography" or my name so as to narrow down the search somewhat (apparently some persons of color decided to use BlackNet as their group's name, thus leading to some collisions_ --archives of the list, partially available at http://infinity.nus.sg/cypherpunks/ --my Cyphernomicon, available at http://www.oberlin.edu/~brchkind/cyphernomicon/ --another article, available at http://www.powergrid.com/1.01/cryptoanarchy.html --or, the item below, part of a chapter called "True Nyms and Crypto Anarchy," which may or may not appear in the forthcoming edition of Vernor Vinge's "True Names." This section discusses data havens, and the BlackNet experiment in 1993: DATA HAVENS AND INFORMATION MARKETS Another science fiction writer, Bruce Sterling, popularized "data havens" in his 1988 novel, "Islands in the Net." He focussed on _physical_ data havens, but cyberspace data havens are more interesting, and to likely to be more important. That they are distributed in many legal jurisdictions, and may not even be traceable to any particular jurisdiction, is crucial. A data haven is a place, physical or virtual, where information may be stored or accessed. The usual connotation is that the data are illegal in some jurisdictions, but not in the haven. Data havens and information markets are already springing up, using the methods described to make information retrievable anonymously and untraceably. Using networks of remailers and, of course, encryption, messages may be posted in public forums like the Usenet, and read by anyone in the world with access, sort of like a cyberspatial "Democracy Wall" where controversial messages may be posted. These "message pools" are the main way cyberspatial data havens are implemented. Offers may be in plaintext, so as to be readable to humans, with instructions on how to reply (and with a public key to be used). This allows fully-untraceable markets to develop. It is likely that services will soon arise which archive articles for fees, to ensure that a URL (Uniform Resource Locator) is "persistent" over a period of many years. Ross Anderson's "Eternity Service" provides a means of distributing the publication of something so that even later attempts to withdraw all copies are thwarted...this has obvious value in fighting censorship, but will also have implications when other types of publication occur (for example, a pirated work would not be withdrawable from the system, leaving it permanently liberated) Examples of likely data haven markets are: credit data bases, doctor and lawyer data bases, and other heavily-regulated (or even unallowed) data bases. Information on explosives, drug cultivation and processing, methods for suicide, and other such contraband info. Data havens may also carry copyrighted material, sans payment to holders, and various national and trade secrets. As one example, the "Fair Credit Reporting Act" in the U.S. limits the length of time credit records may be kept (to 7 or 8 years) and places various restrictions on what may be collected or reported. What if Alice "remembers" that Bob, applying for credit from her, declared bankruptcy ten years earlier, and ran out on various debts? Should she be banned from taking this into account? What if she accesses a data base which is _not_ bound by the FCRA, perhaps one in a data haven accessible over the Net? Can Alice "sell" her remembrances to others? (Apparently not, unless she agrees to the various terms of the FCRA. So much for her First Amendment rights.) This is the kind of data haven application I expect will develop over the next several years. It could be in a jurisdiction which ignores such things as the FCRA, such as a Caribbean island nation, or it could be in cyberspace, using various cryptographic protocols, Web proxies, and remailers for access. Imagine the market for access to data bases on "bad doctors" and "rip-off lawyers." There are many interesting issues involved in such data bases: inaccurate information, responses by those charges, the basis for making judgements, etc. Some will make malicious, false charges. (This is ostensibly why such data bases are banned, or heavily regulated. Governments reserve the rights to make such data available. Of course, these are the same governments which falsify credit records for government agents, which give the professional guilds like the American Medical Association and the American Bar Association the power to stop competitors from entering their markets, so what else can be expected?) Information markets match potential buyers and sellers of information. One experimental "information market" is BlackNet, a system I devised in 1993 as an example of what could be done, as an exercise in guerilla ontology. It allowed fully-anonymous, two-way exchanges of information of all sorts. The basic idea was to use a "message pool," a publicly readable place for messages. By using chains of remailers, messages could be untraceably and anonymously deposited in such pools, and then read anonymously by others (because the message pool was broadcast widely, a la Usenet). By including public keys for later communications, two-way unreadable (to others) communication could be established, all within the message pool. Such an information market also acts as a distributed data haven. As Paul Leyland succinctly described the experiment: "Tim May showed how mutually anonymous secure information trading could be implemented with a public forum such as Usenet and with public key cryptography. Each information purchaser wishing to take part posts a sales pitch and a public key to Usenet. Information to be traded would then have a public key appended so that a reply can be posted and the whole encrypted in the public key of the other party. For anonymity, the keys should contain no information that links it to an identifiable person. May posted a 1024-bit PGP key supposedly belonging to "Blacknet". As May's purpose was only educational, he soon admitted authorship." An example of an item offered for sale early on, in plaintext, was proof that African diplomats were being blackmailed by the CIA in Washington and New York. A public key for later communications was included. This is just one example. There are reports that U.S. authorities have investigated this market because of its presence on networks at Defense Department research labs. Not much they can do about it, of course, and more such entities are expected. The implications for espionage are profound, and largely unstoppable. Anyone with a home computer and access to the Net or Web, in various forms, can use these methods to communicate securely, anonymously or pseudonymously, and with little fear of detection. "Digital dead drops" can be used to post information obtained, far more securely than the old physical dead drops...no more messages left in Coke cans at the bases of trees on remote roads. Payments can also be made untraceably; this of course opens up the possibility that anyone in any government agency may act as a part-time spy. Matching buyers and sellers of organs is another example of such a market, although one that clearly involves some real-world transfers (and so it cannot be as untraceable as purely cyberspatial transactions can be). A huge demand (life and death), but there are various laws tightly controlling such markets, thus forcing them into Third World nations. Fortunately, strong cryptography allows market needs to be met without interference by governments. (Those who are repelled by such markets are of course free not to patronize them.) Whistleblowing is another growing use of anonymous remailers, with those fearing retaliation using remailers to publicly post their incriminating information. The Usenet newsgroups "alt.whistleblowing" and "alt.anonymous.messages" are places where anonymously remailed messages blowing the whistle have appeared. Of course, there's a fine line between whistleblowing, revenge, and espionage. Ditto for "leaks" from highly-placed sources. "Digital Deep Throats" will multiply, and anyone in Washington, or Paris, or wherever, can make his case safely and anonymously by digitally leaking material to the press. Gibson foresaw a similar situation in "Count Zero," where employees of high tech corporations agree to be ensconced in remote labs, disconnected from the Nets and other leakage paths. We may see a time when those with security clearances are explicitly forbidden from using the Net except through firewalled machines, with monitoring programs running. Information selling by employees may even take whimsical forms, such as the selling of topless images of women who flashed for the video cameras on "Splash Mountain" at Disneyland (now called "Flash Mountain" by some). Employees of the ride swiped copies of the digital images and uploaded them anonymously to various Web sites. Ditto for medical records of famous persons. DMV records have also been stolen by state employees with access, and sold to information broker, private investigators, and even curious fans (the DMV records of notoriously reclusive author Thomas Pynchon showed up on the Net). Rumors are that information brokers are prepared to pay handsomely for a CD-ROM containing the U.S. government's "key escrow" data base. The larger issue is that mere laws are not adequate to deal with these kinds of sales of personal information, corporate information, etc. The bottom line is this: if one wants something kept secret, it must be kept secret. In a free society, few personal secrets are compelled. Unfortunately, we have for too long been in a situation where governments insist that people give out their true names, their various government identification numbers, their medical situations, and so on. "And who shall guard the guardians?" The technology of privacy protection can change this balance of power. Cryptography provides for "personal empowerment," to use the current phrasing.

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Re: Freedom Forum report on the State of the First Amendment (fwd)
by Jim Choate 17 Dec '03

17 Dec '03

Forwarded message: > Date: Sun, 11 Jan 1998 16:40:11 -0400 > From: The Sheriff <sheriff(a)speakeasy.org> > Subject: Re: Freedom Forum report on the State of the First Amendment > Sam Adams (as it may or may not have been mentioned on this list) > himself had a problem with our constitution -- he didn't think that > it was right for the people to ratify the bill of rights, thereby > protecting certain rights under the constitution. Why? Simple. > > He was of the mind that setting our rights, such as the right to > free speech, in concrete meant that anything NOT set in concrete > wasn't a right -- he felt that by ratifying the bill of rights, > rather than using logic as I did above, we were actually LIMITING > our rights as freely roaming human beings. Which is the reason they put the 9th and 10th in there. > America should be about not taking any shit from anybody -- not > because you can sue, but because you have enough attitude to realize > when the other guy's being an idiot, and because you have enough > balls to tell him so. Actualy it should be because people realize you don't owe that other person an explanation for your actions and you further don't need their permission. Of course this assumes you *aren't* using anything that belongs to them. ____________________________________________________________________ | | | Those who make peaceful revolution impossible will make | | violent revolution inevitable. | | | | John F. Kennedy | | | | | | _____ The Armadillo Group | | ,::////;::-. Austin, Tx. USA | | /:'///// ``::>/|/ http://www.ssz.com/ | | .', |||| `/( e\ | | -====~~mm-'`-```-mm --'- Jim Choate | | ravage(a)ssz.com | | 512-451-7087 | |____________________________________________________________________|

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Crypto Jokes
by John Young 17 Dec '03

17 Dec '03

Inspired by "Crypto Kong," contributions of crypto jokes are requested, to enliven our Web site, which is pretty gray these days without congressional buffoonery. Thigh-slappers are preferred, but since one person's humor is another's pain, any bizarre tales of woe, stupidity and vanity are welcomed. Short as possible, like Adam's three swines of pearl. Sure, anonymous zingers are great. No pay, no apologies for missing the point.

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Crypto Jokes
by John Young 17 Dec '03

17 Dec '03

Inspired by "Crypto Kong," contributions of crypto jokes are requested, to enliven our Web site, which is pretty gray these days without congressional buffoonery. Thigh-slappers are preferred, but since one person's humor is another's pain, any bizarre tales of woe, stupidity and vanity are welcomed. Short as possible, like Adam's three swines of pearl. Sure, anonymous zingers are great. No pay, no apologies for missing the point.

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No Subject
by Anonymous 17 Dec '03

17 Dec '03

If man were meant to clone, he'd have twins. - Anon

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Just Released! 16 Million!
by Friend＠public.com 17 Dec '03

17 Dec '03

IT WAS JUST RELEASED!! INTRODUCING...MILLIONS VOL. 1 We took a total of over 92 million email addresses from many of the touted CD's that are out there (bought them all - some were $300+)! We added the millions we had in storage to those. When we combined them all, we had in excess of 100+ million addresses in one huge file. We then ran a super "sort/de-dupe" program against this huge list. It cut the file down to less than 25 million!!! Can you believe that? It seems that most people that are selling CD's are duping the public by putting numerous files of addresses in the CD over and over. This created many duplicate addresses. They also had many program "generated" email addresses like Compuserve, MCI, ANON's, etc. This causes a tremendous amount of undeliverables, and for those that use Stealth programs, clogs up servers quickly with trash, etc. We then ran a program that contained 150+ keywords to remove addresses with vulgarity, profanity, sex-related names, postmaster, webmaster, flamer, abuse, spam, etc., etc. Also eliminated all .edu, .mil, .org, .gov, etc. After that list was run against the remaining list, it reduced it down to near 16 million addresses! So, you see, our list will save people hundreds of dollars buying all others that are out there on CD and otherwise. Using ours will be like using the 100+ million that we started with, but a lot less money and alot less time!! We also purchased Cyber-Promos ($995.00) CD. We received it just prior to finishing production work on the new CD. We had our people take a random sample of 300,000 addresses from the touted 2.9 that they advertised. We used a program that allows us to take a random sample of addresses from any list. We were able to have the program take every 9th address, thus giving us a 300,000 list of Cyber's email addresses from top to bottom. We did not clean these, but we did create 3 seperate files named cyber1.txt, cyber2.txt, & cyber3.txt of 100,000 addresses each. This will give all people that use the list a opportunity to send mail to the list before deciding if their CD is all it's hyped to be. We also included a 2+ million "Remove/Flamer" file broke into seperate files for ease of extracting and adding to your own database of removes. "You can buy from the REST or you can buy from the BEST. Your choice. _____________________________ What others are saying: "I received the CD on Friday evening. Like a kid with a new toy, I immediately started bulking out using the new email addresses. Over the course of the weekend, I emailed out over 500,000 emails and I received less than TWENTY undeliverables!! I am totally satisfied with my purchase!! Thanks Premier!!" Dave Buckley Houston, TX "This list is worth it's weight in gold!! I sent out 100,000 emails for my product and received over 55 orders! Ann Colby New Orleans, LA **************************************** HERE'S THE BOTTOM LINE Here is what you get when you order today! >> 16 Million Email Addresses... 1 per line in simple text format on a CD. Files are in lots of 100,000 (no codes needed to open files). All files are separated by domain name for your convenience. PLUS you receive a tremendous REMOVE list! AND the a sampling of CyberPromo's HOT list. >>> NOW ONLY $149.00! This price is effective for the next seven days, thereafter the price will be $199.00 so ORDER NOW! All lists are completely free of any Duplicates. We also on a continual basis, add New Names and Remove Undeliverables and Remove Requests. The result is the Cleanest Email Addresses Available Anywhere to use over and over again, for a FRACTION of the cost that other companies charge. Typical rates for acquiring email lists are from 1 cent to as high as 3 cents per email address - that's "INFORMATION HIGHWAY" ROBBERY!. Don't even hesitate on this one or you will miss out on the most effective way to market anywhere..PERIOD! If you have any further questions or to place an order by phone, please do not hesitate to call us at: 908-245-1143 To order our email package, simply print out the EZ ORDER FORM below and fax or mail it to our office today. We accept Visa, Mastercard, AMEX, Checks by Fax and Mail. _________________ EZ Order Form _____Yes! I would like to order MILLIONS Vol. 1 email addresses for only $149.00. *Please select one of the following for shipping.. ____I would like to receive my package OVERNIGHT. I'm including $15 for shipping. (outside US add an additional $25 for shipping) ____I would like to receive my package 2 DAY delivery. I'm including $10 for shipping. (outside US add an additional $25 for shipping) DATE_____________________________________________________ NAME____________________________________________________ COMPANY NAME___________________________________________ ADDRESS_________________________________________________ CITY, STATE, ZIP___________________________________________ PHONE NUMBERS__________________________________________ FAX NUMBERS_____________________________________________ EMAIL ADDRESS___________________________________________ TYPE OF CREDIT CARD: ______VISA _____MASTERCARD CREDIT CARD# __________________________________________ EXPIRATION DATE________________________________________ NAME ON CARD___________________________________________ AMOUNT $____________________ (Required) SIGNATURE:x________________________ DATE:x__________________ You may fax your order to us at: 1-908-245-3119 CHECK BY FAX SERVICES! If you would like to fax a check, paste your check below and fax it to our office along with all forms to: 1-908-245-3119 ****************************************************** ***24 HOUR FAX SERVICES*** PLEASE PASTE YOUR CHECK HERE AND FAX IT TO US AT 1-908-245-3119 ******************************************************* If You fax a check, there is no need for you to send the original check. We will draft up a new check, with the exact information from your original check. All checks will be held for bank clearance. If you feel more comfortable sending payment through the mail, please send all forms and Check or Money Order to: Rapture Marketing Inc. P.O. Box 616 Kenilworth, NJ 07033

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