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Brookings Inst. on crypto: "There are reasonable compromises"
by Declan McCullagh 17 Dec '03

17 Dec '03

---------- Forwarded message ---------- Date: Fri, 18 Jul 1997 09:17:52 -0700 (PDT) From: Declan McCullagh <declan(a)well.com> To: fight-censorship-announce(a)vorlon.mit.edu Subject: Brookings Inst. on crypto: "There are reasonable compromises" Morton's Steakhouse is a true Washington institution. Nestled in the heart of lawyer country, between K and L streets, the clientele are well-heeled lobbyists hungry for red meat. Which is all you'll find at Morton's, where the menu lists a fine selection of slabs, all thick, bloody, expensive. I had lunch at Morton's yesterday with a colleague, a fellow from the NSA, and a gentleman from the armed forces. We talked Net-regulation, censorship, and hacking. Most of all we talked encryption, and crypto-compromises. This is a theme you'll see repeated in this recent policy paper from the liberal Brookings Institution: There are reasonable compromises. A useful place to start is a national cryptography policy... rigorous oversight and accountability for government access to the keys needed to intercept and read coded data, negotiation of an agreement with our close allies on a global encryption standard, and formation of a government/private sector oversight body... the basic elements of a reasonable compromise are now in sight and may yet be achieved... Current initiatives that would allow export of any technological solution, of unlimited strength, subject only to the proviso that an acceptable key recovery system be maintained with a suitably defined and trusted party (including self-escrow), are headed in the right direction... -Declan ------------------ no. 21 Deciphering the Cryptography Debate July 1997 By Kenneth Flamm FOR THE PAST FIVE YEARS, the U.S. government and America's information industries-producers and users of computers, communications systems, software, information services-have been locked in a bitter and highly technical battle over cryptography policy: the rules of the game for techniques used to scramble and unscramble data. Such encryption and decryption is vital in maintaining the confidentiality of information (whether business information, financial transactions, personal medical records, or government secrets) passing through the exploding web of computer and communications links joining this nation together. The hard fought and often arcane debate has come to an inconclusive and unsatisfactory draw that does little to deal effectively with any of the conflicting objectives-civil liberties, economic competitiveness, law enforcement, and national security-brought to the bargaining table. This does not have to be. There are reasonable compromises. A useful place to start is a national cryptography policy built around four key elements-strong cryptography put into wide use, a strengthened legal framework and electronic logging system that provides rigorous oversight and accountability for government access to the keys needed to intercept and read coded data, negotiation of an agreement with our close allies on a global encryption standard, and formation of a government/private sector oversight body to review both the overall security of our national information infrastructure and the voluntary testing and certification of encryption and security products. Why Is Cryptography Important? UNTIL THE MIDDLE OF THIS CENTURY, codemaking and codebreaking were primarily the concern of governments protecting diplomatic and military communications. World War II was a turning point for cryptography. The first primitive electronic computers were built by the United States and Britain during that war and used to break German and Japanese codes. Using technology and methods that remained closely guarded military secrets until the late 1970s, the Allies succeeded in building electronic machines to break the supposedly unbreakable codes used to encrypt virtually all Axis radio messages. This allowed the Allies, for example, to read signals sent by German submarines as they reported their locations, send forces to destroy them, and win the vitally important battle for the North Atlantic shipping lanes. After the war, U.S. codebreakers continued to play a central role in the development of the fastest possible computers of the day, so-called supercomputers. In the late 1960s, others in the military funded research into damage-resistant digital communications networks that gave us the first working prototype of today's Internet. As computers and network use also took hold within business in the 1960s and 1970s, cryptography (mainly the domain of government in earlier decades) increasingly began to protect sensitive business information stored in private sector computers. With outside computer links through communications networks growing, the dangers of unauthorized penetration into sensitive computer databases through these external ties also multiplied. The financial sector led these technological changes. As global financial markets, national banking systems, and local automated teller machines all went electronic, cryptographic systems were installed to protect sensitive data coursing through the digital arteries of finance. Today, we are teetering at the precipice of an even wider transformation of the basic infrastructure for commerce. Telecommunications services, retailing, and the electric power grid are already organized around vast computer networks. Multinational companies link global operations over international networks. By 1999, all U.S. government benefits will be paid electronically. Doctors will access data and communicate remotely with patients, businesses will buy services from consultants, contractors will sell to government, researchers will provide policy advice, seminars will be organized-all over computer networks. Vast savings in time and resources and improvements in business productivity seem possible. For this leap forward in our economic infrastructure to be realized, however, the information running through the system will have to be authenticated, verified, protected from unauthorized access, and guarded against witting or unwitting corruption. Equally profound changes are going on within the military establishments whose investments initially spurred the computer revolution. Our post-Desert Storm military forces are as dependent on complex computerized command, control, and communications networks as commercial industry. The Defense Department is today groping toward an information technology-based Revolution in Military Affairs, a future in which sensors, intelligence databases, command and control systems, precision munitions, and smart weapons platforms are seamlessly linked together in real time to deliver measured military force swiftly, surely, and over great distances. In contrast to the situation of forty years ago, enormous private sector investments are today driving the engine of information technology, with the military largely drawing on commercial technology for its particular variant of the information revolution. Commercial and military computer and communications systems-like the core industrial infrastructure underlying modern military power-are hopelessly intermingled within the sinews of the U.S. information economy. A new term, information warfare, explicitly recognizes that an attack designed to disrupt our military capability or will to fight is as likely to target nominally civil infrastructure, like telecommunications networks, the electric power grid, the banking system, or air traffic control, as any purely military system. Widespread use of effective cryptography to secure and protect the rivers of data flowing through computer and communications systems is needed now to enable the further development of the information infrastructure for tomorrow's high-tech economy and to protect military capabilities dependent on that same information infrastructure. What Are the Issues? The heated debate over cryptography policy is fundamentally driven by rapid technological change. The price of computing power has been dropping 20 to 30 percent annually over decades now, an order of magnitude greater than anything measured during the first great Industrial Revolution of two centuries ago. Computing power is used to both make and break codes, and as the cost of computing power plummets, cryptographic systems that once offered adequate protection for data become insecure. By the same token, however, cheaper computers also make it cost effective to encrypt data where once it would have been uneconomic. Paradoxically, then, plummeting computing costs have both enabled the widespread use of encryption to defend information security and increased the ability of moderate to large organizations (in the private sector and governments) to afford the computing resources needed to successfully attack once-capable encryption systems. To balance these shifting forces, the United States must grapple with multiple and often conflicting objectives. First, there are constitutional issues. On the one hand, the United States has a well-established tradition of respect for privacy and civil liberties that is a bedrock of our society. On the other hand, there are few absolute rights-under court order, communications can be legally intercepted, and private homes may be entered and searched. Encryption-like "speaking in tongues"-might even be interpreted as a form of speech and offered the greater protection that freedom of speech enjoys. Historically, the government has not attempted to control the use of encryption within domestic U.S. borders but instead limited its export overseas. Similarly, court orders are required to lawfully intercept domestic telephone conversations, but not for foreign traffic. The legal framework protecting data communications-including encryption of data-has not changed to address the many new channels for expression (and surveillance of expression) opened up by the computer revolution. It is now appropriate to establish an organized and systematic legal framework for our information society. Second, we need to use strong cryptography to enable electronic commerce on the burgeoning information infrastructure that is going up all around us. The potential economic benefits from moving forward rapidly to locate our businesses on the information superhighway seem large. Without ironclad security, however, no business is going to drive its sensitive data up the on-ramp. Strong cryptography is a small but vital piece in the systems that will provide information security. Third, U.S. companies are world leaders in computers and communications, where success in global markets is an essential ingredient in maintaining competitive advantage. But the market for information technology is one in which capable foreign competitors stand ready to pick up the baton of technological leadership should American firms stumble. The economic preeminence of U.S. information technology companies-and the resulting benefits to the U.S. economy-are arguably at risk should U.S. producers be blocked from selling important technology that is available from foreign competitors. Law enforcement objectives, in contrast, argue for controls on use of strong cryptography (while recognizing that cryptography also protects against electronic crimes). Since the dawn of the age of telephony, lawful wiretapping has been viewed as an essential tool for police, the legal extension of the right to enter and search under warrant. In the information age, with the proliferation of digital technology, cryptography has the potential to deny police the lawful access that they now enjoy to voice and data communications. National security has been another powerful argument for limits on encryption. Though not often discussed openly, interception of foreign communications traffic is in all likelihood one of the most valuable and reliable sources of intelligence for defense and foreign policy purposes. Routine use of strong and difficult-to-break cryptography in, say, the global public telephone network would be a nightmare scenario for both law enforcement and the intelligence community. But we should also recognize that while global availability of strong encryption may limit our offensive gathering of foreign intelligence and perhaps in the future, offensive "information warfare," the global economic success of U.S. information technology producers also has a positive value for offensive intelligence gathering. Even the strongest encryption technology may be rendered vulnerable by the way it is administered and used. A global marketplace dominated by the products of the United States and its allies-which will be well understood by a substantial community of American technologists-will be much more transparent to allied intelligence gathering than a world market dominated by the unfamiliar and poorly understood products of others. And strong encryption, even if pervasive and unbreakable, will nonetheless have a positive national security value in protecting U.S. information from the snooping of adversaries, political and economic. It will also have significant value as a defensive rampart against the information warfare offensives of adversaries. Arguably the United States, now reliant on the most advanced and pervasive information infrastructure in the world, is also the nation with the most to lose to disruption by a successful offensive attack. Finally, we must acknowledge that as more and more aspects of our personal and economic lives are connected to, and accessible over, the information superhighway-things like medical records, corporate accounts, personal travel plans, even daily calendars and diaries-the "wiretapping" metaphor for permitting government access to electronic information begins to break down. It is no strain to forecast a not-too-distant digital future in which almost everything-all sorts of personal information, records, even art and music-is stored or communicated electronically, connected to or accessible through some computer network. As the Worldwide Web reaches out to encompass all aspects of our lives, a surreptitious government access hatch begins to resemble a special door built into the basement of our homes through which government can enter without our knowledge or consent. Our Constitution's protections against "unreasonable searches and seizures" should be our guide as we chart these deep and unknown waters. Government access to private information should be governed by clear rules that "we, the people" make after open debate. Even in simpler times, there have been occasional but deeply disturbing instances in which individuals in government have abused powers granted for legitimate law enforcement and national security purposes. As pervasive electronic tendrils from the information superhighway reach into the nooks and crannies of our lives, the potential damage from poor judgment (or worse yet, corruption) by some individual in government will be enormous. It is vital that a system with clear guidelines and strict accountability be put into place to oversee our national encryption policy as we strike a balance among the multiple, legitimate objectives. Where Are We Now? In the late 1970s, industry, in collaboration with the U.S. government, developed a Data Encryption Standard (DES) based on coding keys (sequences of binary digits, or bits) that were 56 bits long. Though widely used today, steady advances in computer performance now make this system vulnerable (commercial supercomputers almost double in power every year, sufficient to "break" a key that is one bit longer in some given time). Much stronger encryption systems are used within the military and other parts of the U.S. government. Until 1996, the State Department did not readily permit the export of encryption systems using keys longer than 40 bits, which can be easily broken today. The Clinton administration, recognizing the need to promote commercial use of stronger encryption, unveiled such a system in April 1993 (actually developed under previous administrations but not publicly promoted). The system used special computer circuitry dubbed the "Clipper" chip, with decoding keys issued in two parts and held by two separate government agencies-within the Treasury Department and the Commerce Department. This Clipper chip initiative championed the concept of "key escrow," with government holding copies of the keys used to encrypt data, and argued for its voluntary adoption by the private sector as a solution to increasingly evident data security problems. Since only stronger encryption systems using the Clipper chip, or similar technology, were likely to be approved for export, critics argued that the system was not really voluntary. No U.S. multinational corporation would want to build and maintain two separate computer and communications networks-one for domestic use and one for international use. There were other practical objections. It was unclear how foreign governments would react to companies operating in their nations giving the U.S. government the keys to read encrypted communications, or even if this would be required. There was suspicion that the Clipper chip, with its proprietary government-developed technology, was not as secure as advertised and might even allow surreptitious government interception without appropriate legal safeguards. Even more important, there was concern that a government-mandated technical solution was being imposed on an industry that was far more capable and responsive to continuing technological change than any cobwebbed and inflexible government bureaucracy, and that industry itself through market forces was much better able to work out the best solutions to its information security problems. Furthermore, argued much of U.S. industry, increasingly capable foreign producers were beginning to market and sell encryption systems that were stronger than what U.S. industry would be permitted to sell in export markets. The net effect of administration policy, in this case, would be to tie the hands of U.S. industry and leave an important and growing segment of the information industry to foreign producers, free to sell any and all strong encryption products to customers anywhere. Stung by these criticisms, the Clinton administration withdrew and regrouped. In mid-1994, it offered up a new proposal in which "trusted third parties" within the private sector, rather than the government itself, would act as key escrow agents. This did little to silence industry critics. Finally, in 1996 the administration revealed a new plan and made some important changes in the direction of its policies. There would henceforth be no restrictions on exports of cryptographic systems-based on key length or technology-if those systems contained so-called key recovery features. That is, if U.S. exporters could demonstrate a viable plan in which trusted third parties (possibly including "self-escrow" within user organizations) would hold (and supply to government when presented "appropriate legal authority") information that would permit recovery of code keys and decryption of data, unrestricted export of such encryption systems would be allowed. Over an interim period of two years, exports of non-key recovery 56-bit cryptography systems would be permitted by producers demonstrating a commitment to develop viable key recovery systems. Cryptographic systems would be reclassified as a dual-use commercial product, rather than a munition, and export controls transferred from the State Department to the Commerce Department (though the Department of Justice would now play a new advisory role in the export licensing process). Finally, an explicitly international framework would be sought, with mutual access to national key recovery agents negotiated with foreign governments through carefully defined legal procedures. Though some in the U..S. business community continued to object, initial reaction was much more favorable than with previous cryptography initiatives. The government had worked with U.S. business in developing the new initiative, and a number of major U.S. computer and software companies voiced support for the general principles outlined in the initiative. (A system that enabled recovery of their own encrypted business data, in fact, was actually useful to companies in dealing with the risks of employee turnover.) Others took a wait-and-see approach. The wait was not a long one. Within months, a number of the proposal's initial supporters had publicly or privately defected as the details of its implementation were revealed. One major sticking point was the government's apparent desire to involve itself in frequent and detailed reviews of proprietary company business plans and progress in developing key recovery systems, as a condition for continued approval of interim exports of 56-bit systems. By mid-1997, some additional problems had become visible. A U.S. attempt at internationalizing the key recovery principle met only limited success: a draft policy from the Organization for Economic Cooperation and Development (OECD) recommended only that the issues be left to national discretion. While the United States, Britain, and France publicly supported the idea (and Japanese officials made it clear privately that they too would cooperate), opinion in Germany was divided, and other countries hesitated. Dueling bills-establishing a legal framework for key recovery, decontrolling cryptography export-were debated on Capitol Hill. On the face of it, another impasse was shaping up. In fact, however, with a little more flexibility and some degree of innovation, the basic elements of a reasonable compromise are now in sight and may yet be achieved. For the first time, the varied interests at stake are close enough to a workable solution to make establishment of a functioning and effective national cryptography policy a real possibility. Seeking Common Ground Four basic elements make up the core of what a national cryptography policy should do. First and foremost, strong cryptography-strong enough to resist the attacks that rapidly improving computer technology will continue to breed-must be available for routine business use. In an integrated global economy, this also means that it must be usable and exportable around the world. Current initiatives that would allow export of any technological solution, of unlimited strength, subject only to the proviso that an acceptable key recovery system be maintained with a suitably defined and trusted party (including self-escrow), are headed in the right direction. This will permit market forces to determine the most cost effective and flexible technologies, build in the ability to respond dynamically to continuing innovations in computer and communications technology, and yet maintain the ability of law enforcement and national security authorities to gain lawful access to encrypted communications when a critical national interest makes such access imperative. But the government should be more forthright in presenting its case. Though it is true that no constraints on domestic use of encryption are being proposed, the only product likely to gain wide acceptance in today's global economy is cryptography that is exportable to one's foreign subsidiaries and business partners. The government should be crystal clear in acknowledging that this debate is in fact about the encryption systems that will be used widely within the domestic U.S. economy. Also, key recovery remains an untried and untested system. It is entirely possible that a better solution to the cryptography problem may be discovered as computing technology advances, and policy should be flexible enough to adapt if this happens. The critical thing is the principle: strong encryption, widely available, with the potential for lawful decryption by accountable authorities. The government still must establish clear principles and a transparent cryptography policy. The new export regulations do not explicitly address a large number of significant issues (for example, backwards compatibility of key escrow with interim 56-bit systems, length of time escrowed keys must be kept for different types of data) that are now being defined in a piecemeal and private fashion as individual companies' key recovery product development plans are submitted with license requests. Various "exceptions" to the infant policy- permitting the export of stronger encryption without key recovery, for example, in specialized financial applications, or to banks and foreign subsidiaries of U.S. companies- are announced weekly. A "black box" process ("just submit it, and we'll tell you if it's OK") that sets limits on cryptography without open discussion and debate and forces Americans to struggle to infer the policy from the sparse and sometimes inaccurate details published in the press is totally unacceptable in an area this important to the nation. A second core element of a new national policy-and one that has yet to be carefully addressed by any broad initiative-is the construction of a clear, up-to-date legal framework for, and safeguards on, government access to encrypted data and communications. Government access is only tolerable in pursuing the legitimate social objectives outlined earlier. The legal framework defining privacy and freedom of speech in electronic data and communications is currently a crazy, patchwork quilt with many holes in it. The administration's new rules specify that key recovery agents must hand over keys to the government within two hours after receiving "appropriate legal authority" but nowhere define precisely what this authority must be. Is a court order required, or merely a signature from a political appointee, and under what circumstances? Our laws should be debated and updated to define the answers better and more comprehensively, given current and foreseeable technological realities. Careful attention must also be paid to the potential for abuse or corruption. Even after appropriate legal authority is granted on paper for some narrow purpose, there is typically substantial room for interpretation as to what is "reasonable" in deciding how wide to cast an electronic net in trapping suspicious communications and how to deal with unexpected discoveries that turn up. Most government officials can be expected to behave in a responsible and lawful way, but an excessively curious or aggressive, or even corrupt, official using a legal interception to "surf" through data or communications beyond its intended scope creates a potential for damage that will grow just as quickly as the information superhighway itself. The same computer technology that makes electronic communication so cheap and pervasive also makes it possible to electronically record and log, with a permanent and verifiable audit trail, any government interception of electronic communications. Just as financial services companies safeguard against abuse by logging and taping telephone contacts with customers, comprehensive logs and a verifiable audit trail should be automatically recorded and stored electronically in each and every instance that a government official intercepts private data or communications. In addition, tougher standards for private abuse of personal data and illegal access to private communications should be included in whatever new legal framework is adopted, and significant penalties should be defined. Third, a national cryptography policy must recognize that the problems-and solutions-outlined above are inherently international in scope. Law enforcement, national security, regulation and oversight of global finance and trade are all areas that span national boundaries today and require cooperation among governments. Just as our private sector works with its foreign partners to define standards that allow it to operate easily and effectively in global markets, the U.S. government must work with foreign governments to define an international encryption policy that makes the U.S. approach compatible with foreign systems. U.S. requirements imposed on U.S.-based businesses must be compatible with the foreign environments in which they operate. U.S. requirements should also be no more onerous than those imposed by foreign governments on their business communities. A level playing field, with common global rules of the game, is needed to avoid giving economic rivals competitive advantages over one another. The administration made an important and correct decision in seeking an international consensus on the key recovery approach to strong encryption and must be sure to continue to work hard in seeking this common global approach. While it has yet to achieve such a consensus within the OECD, many of the key players with the technical capability to ship advanced cryptography products and affect global markets-Britain, France, and (quietly) Japan-are supporting the U.S. approach, and if a few more (like Germany and Israel) can be brought on board, the critical mass around which the core of an international agreement can be assembled will exist. Finally, with cryptography set to play such a key role in tomorrow's information infrastructure, some new institution that provides a framework for business and government to jointly examine both the overall security of our information infrastructure and the integrity of its individual parts is needed. At the micro level, we must recognize that acquiring a cryptographic product is not like buying a computer or auto- simply testing or using it within an organization gives insufficient insight into its quality or utility. The essence of an effective cryptography system is what the most capable and potentially hostile forces outside a business or other organization can do with the system. There are also obvious economic benefits from some sort of government-industry testing and certification process that spares individual customers a costly and duplicative investment in determining the effectiveness of a cryptography product (and makes use of sensitive information that may be available only to the government). At the macro level, the integrity of our power grid, banking system, and phone network are clearly as vital to our national security as the number of transport aircraft the U.S. Air Force buys, and both government and industry have an obvious interest in scrutinizing the entire information infrastructure and taking steps to reduce weaknesses and vulnerabilities. Government and the private sector should form an oversight body tasked with both reviewing the overall integrity and security of the national information infrastructure and creating a voluntary testing and certification process for the information security products developed by the private sector. A national cryptography policy built around these four elements- strong cryptography put into wide use, a strengthened legal framework and electronic logging system that provides rigorous oversight and accountability for government access to the keys needed to intercept and read coded data, negotiation of an agreement with our close allies on a global encryption standard, and formation of a government/private sector oversight body to review both the overall security of our national information infrastructure and the voluntary testing and certification of encryption and security products-will leave many (maybe even most) participants in the current debate unsatisfied. An absolute right to privacy would not be created in the electronic realm. The government would probably face greater constraints in seeking lawful access to electronic communications, and maintenance of auditable records probably will create some additional costs. Business is being asked to bear some burden in keeping the keys needed to decrypt confidential communications for a time. Intelligence and national security officials will be more dependent than ever before on cooperation with their allied counterparts. Cooperation on common rules of the game for encryption at the international level will have to be carefully negotiated. None of this will be painless. But it must be done if we are to balance an important and complex set of interests as we enter the next century, the age of the information society. Kenneth Flamm is a senior fellow in the Brookings Foreign Policy studies program and the author of Mismanaged Trade? Strategic Policy and the Semiconductor Industry (Brookings, 1996). The views expressed in this Policy Brief are those of the author and not necessarily those of the trustees, officers, or other staff members of the Brookings Institution. ------------------------- Declan McCullagh Time Inc. The Netly News Network Washington Correspondent http://netlynews.com/

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Problems with anonymous escrow 1--response
by tcmay＠netcom.com 17 Dec '03

17 Dec '03

I welcome Hal's comments. Between this meaty discussion of crypto anarchic issues, along with the equally meaty comments by Eric and others about financial instruments, maybe we've temporarily exorcised the run of "cyphernukes" trivia postings. (Not that nukes are trivial...I understand that even one of them can ruin your whole day.) Hal split his post up into three parts (that I've seen so far), but my response would probably not be split the same way, ideally. But I'll go ahead and answer each of his posts in order, or at least get started. First, let me clarify some points very briefly, points that would ordinarily come up in the response to the second and third parts. * I've never thought that anonymous escrow agents would be large corporations, or even companies of several or more people. In fact, many trading and investment services are handled today by a single person. Many underworld financial services--e.g., offshore banks--are handled by a single person. New computer technology makes this more feasible than ever. Additional staff, especially at the spear carrier level (office workers, clerical staff, etc.), are security leaks, as Hal notes. * Family-based businesses are also common, where blood ties establish a web-of-trust. Very common in Asia, the Middle East, and in other areas where mistrust is a dominant concern. (The Mafia is known as the Family, of course.) In many of these cultures, defections (in the game-theoretic sense) are strongly disincentivized, by the blood ties and the repercussions (ostracism at best, death in many cases). * I agree strongly with Hal--and have argued this in several posts over the past couple of years--that the "ecology of interacting anonymous agents" merits much more study. We cite the fictional scenario of "True Names," and we have limited exposure to such ecologies from the criminal underworld (Triads, Mafia, Russians, Jamaicans, etc.), but few economic studies have been done of such systems. (My explicit focus in many of my posts on outlaw communities and outlaw actions is not because I admire violent criminals, but because these communities are obviously unable to use the legal systems of the modern world and thus have developed and evolved their own legal codes of sorts--sometimes with greater refinement than the so-called legal world. David Friedman once agreed with me that much more study of underground markets, criminal enterprises, and black markets in general is needed.) On to Hal's comments. I'll only respond now to #1, then to #2, #3, etc. later today. >There has been some discussion here about how anonymity/pseudonymity >can be applied to a wider range of relationships. One possibility >that Tim May and others have mentioned is to have escrow agents be >anonymous. (I will use "anonymous" and "pseudonymous" more or less >interchangeably because the former term is more familiar. But I am >really referring to a case where the agents maintain a certain amount >of continuity via secret keys and such.) > >(Let me make it clear that I am not arguing that there SHOULD NOT be >anonymous escrow agents. I am questioning whether they are likely to >be viable entities due to the problems I am listing here.) I'm not arguing, by the way, that such anonymous escrow agents (AEAs, for brevity) will dominate conventional escrow agents, such as banks, securities firms, etc. (all of which have certain escrow functions). But I do expect that as more transactions leave the conventional "legal world"--not because they are ipso facto illegal or criminal, but because they are between parties who don't each others identities or nationalities and hence are unlikely to agree that Afghani law, for example, applies--that cyberspatial escrow/PPL agents will be more common. And if they exist, outside the conventional legal structure for the reasons just given, what reason is for them to be _non_-anonymous, that is, for them to voluntarily reveal their phsysical identities, locations, etc.? Hal mentions someplace that non-anonymity allows customers to check the bona fides. Several points: * Bona fides are easily faked. Cf. my posts on the 60,000 people in the Witness Security Program (aka Witness Protection), most with full-backstopped legends. The various governments of the world are expert at creating such legends, including banks that meet their needs, transport companies, and (probably) escrow services. So non-anonymity is not necessarily what it's cracked up to be. * Non-anonymity will likely expose the escrow agent to various pressures and sanctions, including: lawsuits, subpoenas, threats by the parties involved in an escrow, taxation, etc. Lots of complications. I can readily imagine these pressures totally swamping the advantages of escrow. I certainly know that any "non-anonymous" escrow agent will immediately be beset by various pressures, legal, financial, and physical. I can't imagine one operating for long in the U.S., for example. * Non-anonymous escrow services in most jurisdictions (Hint: the operative word is "jurisdiction") will of course not be able to handle transactions that are illegal, e.g., information sales, drug money holding, etc. And they likely face "know your customer" laws in many jurisdictions. [I consider the idea of a non-anonymous escrow agent a non-starter, offering essentially nothing of interest to identity-blinded users and instead introducing unacceptable risks, pressures, and red tape.] * If the customers, Alice and Bob, are anonymous (actually, pseudonymous, of course), and are not associated with any jurisdiction, why should they be interested in using a non-anonymous escrow agent, one who may be find in favor of one party or another based on local law, based on pressures applied by one party, etc.? Anonymous parties should be more comfortable with AEAs, all other things being equal. >The obvious problem I see with anonymous escrow agents is that it is >much harder for them to become and stay trustworthy. With an >identified (non-anonymous) agency, you can have a lot of information >on which to base your judgement. You can look at its assets, at its >employees and hiring procedures, at its record. You look at the >jurisdiction in which it operates and judge what protection the legal >system may offer. You can look at other agencies in that jurisdiction >and what their track record has been. Eric Hughes' "encrypted open books" protocol may be useful in verifying assets. Pinging works, as do "reputation-rating services" which rate escrow agents. I look to the success of underworld escrow agents (a standard role for criminal syndicates is to enforce certain transactions "fairly"). Granted, they are not anonymous. But reputations do indeed build up, even with pseudonyms (one might say _especially_ with nyms). Lots of issues. > >I would guess that most of that information would not be available >from an anonymous escrow agent, at least not in a validated form. >Perhaps some of it could be done with credentials (a blinded statement >from a reputable accounting firm that (this?) escrow agency has assets >of $X). But generally thinking I think it will be very difficult to >get nearly as much high-quality information about an anonymous escrow >agent. By the way, Hal several times talks about the "assets" of the escrow agent. In general, a bonding is not needed, as the held items are *of no value* to the escrow agent, in many cases I can see. There are two cases to consider: 1. Items held by AEA are unusable to the AEA, e.g., encrypted secrets and money. (There's the issue that the AEA doesn't know if it's holding worthless bits or valid digicash, for example. Again, ways of approaching this, and the protocols will likely evolve with time.) 2. Items, or one half of them at least, are usable by the AEA. For example, the equivalent of $100,000 is transferred to the AEA. It's mostly this second situation I'm dealing with, as Hal is. But I mention the first to give a hint about using protocols which blind the transactions even from the AEA. How it all shakes out is, not surprisingly, unclear. Also, webs of AEAs, somewhat like "reinsurance" amongst insurers, can have positive effects. A complicated point to discuss here, but related to the difficulty of maintaining frauds consistenly in the presence of multiple agents, all unknown to each other. > >This leaves the possibility of using its public record to judge >trustworthiness. It may be able to offer certified statements (again, >credentials of a sort) from earlier customers to show that it behaved >honestly. Tim has suggested "pinging" such businesses, performing >various dummy transactions to make sure that they are still behaving >honestly. All this can help establish a record, but how well can this >be extrapolated into the future? Bear in mind that an anonymous escrow agent (AEA) is effectively no different from a _digital bank_! I thought this point was pretty clear, as I was discussing AEAs in the context of being a slightly different kind of bank, but maybe it wasn't. Consider one's bank today, even a small, poorly-capitalized one. It can always 'defect' and claim that one's money was already withdrawn, (Yes, there are complicated crypto protocols designed to prevent this, or lessen the chances. The crypto community is generally interested in mathematical rigor, not surprisingly, but reputations are crucial as well. Time-binding, evolutionary game theory, etc.) >One of the problems with anonymity which has no underlying identity >certification is that you are pretty much forced to adopt the stance >that "the key is the identity." Your only channel of communication >with the agent is via its key, and any message signed with that key >has to be assumed to be coming from the agent. There is nothing else. Yes, the purist stance. What else could there be and still act as we wish it to? This is not to say that customers could not voluntarily arrange all sorts of additional checks and balances, such as: - biometric security (retinal, thumbprint, earlobe shape, voice, handwriting) - protocol limits ($1000 a day withdrawal, required "co-signers," etc.) (co-signers, time delays, guardians, all are possible, and may even be a good idea...I, for one, would take steps to make sure that my total assets are not accessible via a single number. Nothing unusual about this, just a small matter of programming.) >The problem with this is that keys are not people. People, and >businesses, have a certain continuity, a certain predictability. Keys Well, Hal, this argument applies to all pseudonymous exchanges, not just the AEA idea. (A meta-point I've made in several ways is that parties to these transactions will be "first-class" objects, that is, there is no compelling reason to have a distinction between "customers," "merchants," "bankers," and "escrow agents." Such niche distinctions may evolve, as agents fill various roles more than others, but the software structures need not skew the transactions in any preferential way. I can imagine many transactions in which agents fill several roles. Indeed, we all do this with cash all the time: we act as buyers, sellers, holders of money in trust, cashers of checks, etc.) >do not. A key may change its personality, literally overnight, and >you will not have any warning about this. In an identified business, >if it changes hands, acquires new management, or has some other change >which might lead to new behavior, you generally have some warning >(especially if it is a business which is selling trustworthiness, in ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ A nice turn of phrase, and a key one. AEAs are nothing if not sellers of trustworthiness. You all know the drill here. >which case it will probably provide customers with an unusual degree >of access to the business's internals.) But with an anonymous >business this is not the case. An escrow agent who has been as steady >as the sunrise for years may, without any warning, become totally >dishonest. Hidden behind the shield of anonymity there is no way for >its customers to discover the change. Webs of anonymous escrow, the "laying-off" of escrowed amounts to a set of other AEAs (picked by customers, mutually, like a jury perhaps) could further lessen risks. (My hunch: Sets of AES, picked this way by the parties, could increase confidence exponentially. My hunch is that the math of DC-nets and remailer networks is isomorphic. I'll think about this some more.) >What are the motivations for an anonymous escrow agency to stay in >business, to not take the money and run? Legal sanctions would >presumably be ineffective. One proposal is that as long as the >expected future stream of income is worth more than the current value >of all contracts being held by the agent, it is worthwhile for it to >be honest. This is a powerful incentive, history has shown. (On a tangent, one reason 'dishonesty' is now rampant, with people wiggling out of contracts and finding ways to reneg on deals is that we've largely replaced local sanctions--including things like tarring-and-feathering cheats--with "governmental actions," which can take many years to reach justice, if then.) > >There are a couple of problems with applying this. First, it is >necessary to know about how many contracts the agent is holding at one >time. But this will be complicated by the possible desire on the part >of many customers to keep their activities secret (even beyond their >presumed shield of anonymity). So there must always be the worry that >more contracts are in progress than you suspect. This is especially >true when you consider the possibility that other agencies may >secretly be owned by this one. Hence the use of multiple AEAs, picked by the customers "randomly" (or based on private reasons) and mutually (protocol: each submits list of acceptable AEAs, intersection is picked, or variants of this idea). Makes collusion more difficult. (Anonymity helps becasue pressures cannot directly be applied. Back channels exist, though, perhaps. Playing "Anonymous Monopoly" might be a useful thought experiment.) ... >But combine this with the ease with which a key can change its >personality without warning and it suggests that even a long track >record of stability could be fragile. The business is passed from >father to son, it is acquired, it is coerced away, the owner >experiences a change of circumstances due to illness or other >catastrophe, and suddenly the agency has changed. Now, future income >doesn't look so attractive compared to present money. Now, the owners >have an incentive to close the business and (I firmly think the word >applies) cheat their customers. Yes, this is a risk. But also a risk in non-anonymous transactions. (The people boarding the jets to Brazil.) Well, this ends on a minor comment rather than a major essay point, but perhaps this is best. Meanwhile, the best sunshine part of the day has passed without me getting down to the beach, so I'll close now and try to get out and catch some remaining rays. The remaining posts from Hal I'll respond to tonight. (ObNukeThread: Micronukes with yields of a kiloton or less are possible with as little as 10 grams of Pu. The key is the computer-intensive design and precise implosion sequenve. But such secrets will be amongst the first high-value secrets sold in digital black markets. I'm not worried: so we'll lose a couple of cities someday. Big deal. Six billion people and more...they'll make more.) --Tim May .......................................................................... Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay(a)netcom.com | anonymous networks, digital pseudonyms, zero 408-688-5409 | knowledge, reputations, information markets, W.A.S.T.E.: Aptos, CA | black markets, collapse of governments. Higher Power: 2^859433 | Public Key: PGP and MailSafe available. "National borders are just speed bumps on the information superhighway."

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Re: anonymous posts
by Black Unicorn 17 Dec '03

17 Dec '03

-> In article <199311192308.AA02672(a)access.digex.net> > You know that I have a JD from Georgetown and a Masters from some > ( not accidently unnamed ) school in International Relations. Bloody hell, it's David Sternlight! :-) G <- That, my friend, is an insult the scope of which I will not tolerate Any further comments along these lines will result in a (probably frivolous) suit.

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Hughes and e-mail address's
by Black Unicorn 17 Dec '03

17 Dec '03

Please forgive the bandwidth waste. Mr Hughes, As the host displayed in your list post headers is unreachable from my site, I mailed to your soda.berkeley.edu address. Has this mail reached you? Same person? (Your server stored PGP key indicates the soda address) -uni- (Dark)

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Re: Bad govt represents bad people?
by sw＠tiac.net 17 Dec '03

17 Dec '03

>sw(a)tiac.net (Steve Witham) writes > >> Saying that a bad government is just representing bad people gives it more >> credit than is due. John Kreznar responds- >You leave me wondering what you mean by ``bad people''. As someone near >here (Eric?) is fond of reiterating, never attribute to malice that >which can adequately be explained by ignorance or stupidity. Bad >people? Well, maybe, but it's mostly ignorant-bad, not malicious-bad. Yah. I just meant "bad" to stand for something we were discussing: people who want to benefit from your being taxed, or restrict your freedoms gratuitously. >Majority or not, the constituents strongly influence the bureaucrats. Right, the problem is more than just people in government. I was just contradicting the idea that (as Tim May says) people get the government they deserve. Certainly not all people, maybe not most "deserve" this deal. > A >good recent example familiar to readers of this list is the EFF with its >shrill and incessant campaign Yeah, I said that cleverness, etc. helped to influence but left out persistence, volume, high profile. But not representativeness. > to all of us to pressure politicians to do >this or that. Thanks to the EFF's efforts, proponents of government >surveillance can now claim the cooperation of a leading representative >of data communications users. Yup. Whoops. There's a footnote in one of Bruno Bettleheim's books-- he says professional organizations resemble the guards recruited from among the prisoners in concentration camps. They both start out wanting to defend their fellows from the tyrants, but through compromise they end up being the ones who deliver the tyranny. >> It's the structure of government that needs changing. > >The social cancer would need to be cured. It's hard to believe that >what would result would embed anything like ``government''. You're right, the problem is bigger than government. Also, I was using "government" in the sense of "whatever way protection services are arranged for" rather than "government as we know it". (But I've blabbed enough about that usage.) --Steve - - - - - - - - - - It is said a Shao Lin priest can walk through walls. Looked for, he cannot be seen. Listened for, he cannot be heard. Touched, he cannot be felt.

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Re: Will Monolithic Apps Dominate? (fwd)
by Jim Choate 17 Dec '03

17 Dec '03

Forwarded message: > Date: Sun, 20 Jul 1997 08:03:09 -0400 > From: Robert Hettinga <rah(a)shipwright.com> > Subject: Re: Will Monolithic Apps Dominate? > I'm beginning to think that until it's possible for a given processor to > autonomously buy the software it needs for cash in an auction market, and > then download and install that software, all at run time, the > superscalibility of an environment where software is dispersed through the > network (again, "surfacted" is not a bad word to describe this), and run in > the smallest possible bits at the processor level just won't happen. > > Nonetheless, I do think that the linux gang is going in the right > direction, especially since most most of the cash-settlement technology we > on this list have all come to know and love is more likely to be used in > linux than anywhere else. You should look into Plan 9 with purchasing extensions to its job-processor scheduling scheme. This would allow several interesting features: - anonymous execution of jobs The person scheduling the job would have no idea exactly where the job was running, only that it was at the time the least expensive alternative available. - anonymous processor selection The person owning the machine would not know where all the processes currently running come from since it would not be possible to turn the execution key into an actual machine address. - automatic and anonymous software selection Jobs don't need to have the required software or even where it might be located. The job would need to understand the catalog scheme in place to locate the software (think of a library card system). Since the OS already bids for processor space it would not require a major architecture mod to include E$/crypto functions. > Finally, there's the issue of Mhyrvold's software-as-a-gas idea. That is, > that bloatware is a direct result of Moore's Law. I have to disagree. Bloatware comes from the way we look at software (ie generalize & modularize it) and the way we impliment it (ie libraries). While it makes the programmers job easier it makes the amount of software required for the job larger that required because the libraries have functions and features that aren't used (in this product). Bloatware won't be fixed unless we (ugh) go back to monolithic project design with most code custom built with little re-use from previous versions. I suspect it is easier to buy another 4M of RAM than to pay the programmers to re-create the wheel each time a new version comes out. ____________________________________________________________________ | | | _____ 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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Re: Transport Mixes
by wcs＠anchor.ho.att.com 17 Dec '03

17 Dec '03

An interesting suggestion, though I think putting the bags in bins marked "W.A.S.T.E." may do just about as well :-) Aside from Tim's observation that the Enemy can often detect hashish, bombs, etc., greatly reducing the utility of the system, it's also a system designed for couriers to take bags back to hotel rooms and steal the Newtons from them before routing them on their way. On a slightly mroe serious note, I have seen some transport remailer systems operating, though without the crypto hardware involvement. I had a project that absolutely, positively had to get computers to Colorado overnight, but our building's shipping department insisted on using their regular arrangements anyway. The local carrier in New Jersey assembled my boxes and anything else going to Denver in big crates, shipped them by and air-freight company to another local carrier in Denver, who unpacked the crates and delivered it locally. I wasn't surprised when I got there that the equipment hadn't arrived - what surprised me was that they didn't have a record that said that my package number 12345 was in crate number 67890 which had/hadn't arrived. "No, we just pack them, and when they get to Denver they'll open the crates and see what's in each one. You gotta problem wi' dat?" (Since we weren't interested in anonymity, and were interested in reliability, any future packages went FedEx so we could track them.) I once talked with a guy who did his more private mail transactions through a Mexican postal worker in Tiajuana; any mail that came to the PO box would get put in bigger envelopes and mailed to his real address, and he'd send the guy another $10 to cover the next package; when he wanted to send mail privately, he'd mail it to the PO box along with $10, and the guy would mail it to the real address. Bill

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FWD>This is currently being
by Dave Banisar 17 Dec '03

17 Dec '03

Date 8/30/94 Subject FWD>This is currently being From Dave Banisar To Crypto List >From CPSR FWD>This is currently being pos -------------------------------------- From: "Shabbir J. Safdar" <shabbir(a)panix.com> Message-Id: <199408300318.AA07665(a)panix2.panix.com> Subject: This is currently being posted to Usenet. To: vtw-announce(a)vtw.org Date: Mon, 29 Aug 1994 23:18:18 -0400 (EDT) [updated August 29, 1994 shabbir] ********************************************************************* DISTRIBUTE WIDELY ********************************************************************* Table of contents: Status of the bills Five things you can do RIGHT now to stop Digital Telephony Records of legislators supporting/opposing/wavering on DT Digital Telephony bill FAQ The VTW Press Release Sample Letter To The Editor Who are we and how can you contact us? ------------------------------------------------------------------------------- STATUS OF THE BILLS (updated 8/10/94) Aug 18, 94 HR 4922 reported back to committee (write to Rep. Jack Brooks!) Aug 11, 94 Sen. Leahy & Rep. Edwards hold a joint hearing on the bills in Wash. DC at 1pm in Rayburn 2237. Aug 10, 94 HR 4922 referred to Subcomm. on Civil and Constitutional Rights Aug 10, 94 SB 2375 referred to Subcomm. on Technology and the Law Aug 9, 94 Rep. Hyde officially cosponsors HR 4922 Aug 9, 94 HR 4922 referred to House Judiciary Committee Aug 9, 94 SB 2375 referred to Senate Judiciary Committee Aug 9, 94 Identical House and Senate bills are announced by their respective sponsors, Rep. Don Edwards (D-CA) and Sen. Patrick Leahy (D-VT) EFF states the legislation is "not necessary". VTW will be monitoring this legislation in the same way that we monitored the Cantwell bill, with the blow by blow, day to day updates that cost us significant long distance bills. :-) We're not asking for money though. Don't send us money; we don't want it and it causes us bookkeeping work. Call/write your legislator instead and relay to them the sample communiques below. ------------------------------------------------------------------------------- FIVE THINGS YOU CAN DO *RIGHT* NOW (in their order of importance) 1. Write to the House Judiciary Committee Chairman, Jack Brooks (D-TX) and ask him to oppose the Digital Telephony bill. (HR 4922) 2. Fax/mail a copy of the VTW press release to your local newspaper, tv station, call-in show (everything from NPR to Rush Limbaugh), etc. 3. Write to your legislator (especially if s/he is on the Judiciary Committee (House or Senate) and ask that they oppose the Digital Telephony bills. (SB 2375/HR 4922) 4. Forward a copy of this FAQ to three friends who don't know about it. Or, print it out and place it on a bulletin board at work, at school, hand it out, etc. 5. Write a letter to the editor of your local newspaper, opposing the Digital Telephony bill. 1. CALL/WRITE TO REP. JACK BROOKS, HOUSE JUDICIARY COMM. CHAIRMAN Sample phone Communique: Rep. Jack Brooks Phone: (202) 225-6565 Dear Mr. Brooks, The recent Digital Telephony bills (HR 4922 & SB 2375) disturb me greatly. The FBI has not yet made their case that justifies building wiretap functionality into the telephones of 250 million people to justify the privacy intrusion. Please oppose HR 4922 and SB 2375. Sincerely, _______________________ Sample fax/letter Communique: Rep. Jack Brooks 2449 RHOB Washington, DC 20515 Phone: (202) 225-6565 Fax: (202) 225-1584 The Honorable Jack Brooks, Please oppose Senator Leahy's and Representative Edwards' Digital Telephony bills (HR 4922 & SB 2375). This legislation asks us, the American public, to trade our privacy to ensure law enforcement's future ability to continue to perform wiretaps. Unfortunately, the FBI has yet to make its case to the public to prove that it is unable to administer significant numbers of wiretaps. Telecommunications technology is very new and the change of pace in it is very rapid. The Digital Telephony bills are premature and should not be considered until: -the standards bodies are appointed and include privacy rights groups (not just the Electronic Frontier Foundation) at both the technical and policy levels -the standards are defined and accepted by the three stakeholders (law enforcement, common carriers, and privacy rights groups) -an adequate oversight agency has been given the authority previously allocated to the FCC -the technology has advanced to a point where the effect of such a broad ruling on the undustry can be ascertained. Please oppose HR 4922 & SB 2375. Sincerely, _______________________ If you want to help make legislators responsible for their actions, report this information back to vtw(a)vtw.org. We'll add their position to our database. 2. Take the press release attached and fax/mail/email it to local tv stations, radio stations, callin shows, newspapers, etc. Drop a note to vtw(a)vtw.org, where we'll track the coverage. 3. Forward this file to your friends and coworkers. Use it when you phone call-in shows; educate everyone you know. This is literally a "net" effort. Few people outside of the Internet know about this legislation; they would be horrified to discover its existence. Help educate them. 4. Call/write your legislator and ask them to oppose the Digital Telephony bill. Use the sample communiques above. To find your own legislator, contact the League of Women Voters in your area. 5. Write a letter to your local newspaper's editorial page about the Digital Telephony bill. We have attached a sample editorial page letter that you might base your letter upon. Feel free to use significant license. ------------------------------------------------------------------------------- LIST OF LEGISLATORS SUPPORTING/OPPOSING/WAVERING ON DIGITAL TELEPHONY -REPRESENTATIVES All addresses are Washington, D.C. 20515 Dist ST Name, Address, and Party Phone Fax ==== == ======================== ============== ============== 16 CA Edwards, Donald (D) 1-202-225-3072 1-202-225-9460 2307 RHOB House sponsor of the 1994 Digital Telephony bill 6 IL Hyde, Henry J. (R) 1-202-225-4561 1-202-226-1240 2110 RHOB Cosponsor of the 1994 Digital Telephony bill -SENATORS P ST Name and Address Phone Fax = == ======================== ============== ============== D VT Leahy, Patrick J. 1-202-224-4242 na 433 RSOB Washington, D.C. 20510 Senate sponsor of the 1994 Digital Telephony bill ------------------------------------------------------------------------------- DIGITAL TELEPHONY BILL FAQ What are the (DT) Digital Telephony bills and where did they come from? The DT bills were initially introduced by the Bush administration presumably at the request of the FBI. The initial proposals were very unpopular and met with great opposition, preventing them from moving through Congress. The current incarnations of the legislation (SB 2375 & HR 4922) have several features, but basically require the same thing: common carriers must be able to provide law enforcement officers with court orders access to personal communications. (eg, if the FBI presents a court order for a wiretap on your phone calls to NYNEX, NYNEX should be able to provide the FBI with the ability to intercept your communications under the terms of the court order.) To do this will require changes in the telephone equipment we use today. Since this will obviously cost money, the bill appropriates $500 million in Federal money to these carriers to compensate them for the changes. Does this include bulletin boards and Internet sites like Netcom, America OnLine? No, the legislation specifically identifies common carriers. Information Services, such as these above, are not common carriers. How will this affect me? Imagine there's a giant socket on the side of the phone company's equipment that says "FOR FBI USE ONLY" in giant red letters. Imagine if the fine for not implementing that socket was $10,000 per day for the phone company. How many communications carriers do you think will make any noise about the privacy of their customers' communications? Now imagine that you were asked to pay the bill for this. The proposed budget for implementing this functionality is $500 million dollars for 1995-1998. Just how many wiretaps per year are there? In 1992 there were less than 1,000 wiretaps performed. It is important to note that the legislation is targeted towards wiretaps that the government says they cannot implement. Since there is thus far no published evidence of unimplementable wiretaps, turning the nation's phone system into a giant eavesdropping device to prevent a problem which has not yet been documented or become widespread, sacrifies too much privacy for too little gain. Is there ever a legitimate need for law enforcement to conduct wiretaps? Yes, according to the 1992 Government Accounting Office's "Report on Applications for Orders Authorizing or Approving the Interception of Wire, Oral, or Electronic Communications (Wiretap Report)", there were 919 wiretaps authorized in 1992 (there were no requests denied). There were 607 individuals convicted as a result of these wiretaps. Although this is not an excessive amount, it is not ignorable either. However 607 convictions is infinitesmally small when one considers the number of people convicted yearly in the US. Furthermore, the report does not specify if any wiretaps were unimplementable because of advancing technology. The FBI maintains that advancing technology will prevent this, though this has not yet been documented. VTW feels that until the the FBI makes their case to the public, this bill should not be considered as legislation. Why should I be worried about this bill? THE BILL IS VAGUE REGARDING STANDARDS SETTING The bill requires industry standards groups to be formed to work with law enforcement to create technical standards for this functionality. There are a number of problems with this. First is that these standards bodies may not have even been appointed yet, giving incredible power to a presently unnamed group that will be responsible for appointing those bodies. Secondly, these standards bodies do not currently include any public input. There is a delicate balance involved in wiretapping vs. a citizen's privacy. The standards bodies that are proposed do not have any provisions for public input. Public-interest and/or privacy groups should be included at every level (including the technical level) in order to ensure that this balance is found. Without such input, the standards are likely to sacrifice privacy while giving more functionality than is needed by law enforcement to do its job. THE STANDARDS SHOULD BE ACCEPTED BEFORE THE LEGISLATION IS PROPOSED The DT legislation is vague regarding the standards for wiretapping functionality. Many of the questions and problems we have with this legislation stem from the vagueness of the details regarding the standards. The standards body should be appointed (with representatives from law enforcement, industry, and the public at both the technical and high level) and the standards accepted before the legislation is proposed. THE BILL PUTS GREAT POWER INTO STANDARDS AND COMMITTEES THAT DO NOT EXIST YET By empowering standards bodies that do not exist, and mandating standards that do not yet exist, great power is given to those individuals who can appoint the members of the standards bodies. Furthermore, no process is mandated for the appointment of the members of these standards bodies. THE BILL DOES NOT APPOINT AN ADEQUATE OVERSIGHT AUTHORITY In many situations the (FCC) Federal Communications Commission is appointed to be the final arbiter if industry standard bodies cannot agree on technical standards. The FCC currently serves the interest of industry in regulating the communication carriers. Because the Commission serves the interest of both groups, there is a conflict of interest. A different ageny should be appointed and given the FCC's oversight authority. TELECOMMUNICATIONS TECHNOLOGY IS NOT MATURE Telecommunications is a very new technology. Within the last twenty years, we have seen amazing advances in the technology. Ordering the implementation of such a broad privacy- sensitive function will have far-reaching effects on the future of the technology. This legislation should wait until the technology is more stable. ------------------------------------------------------------------------------- PRESS RELEASE [Please fax this to your local newspaper] Voter's Telecommunications Watch invites fellow citizens to join its media awareness campaign by emailing or faxing this press release to one of two media institutions. East of the Mississippi: Burlington Times email: _________ fax: ___________ West of the Mississippi: San Jose Mercury-News email: _________ fax: ___________ VTW is also experimenting with a fax/email chain letter. The document "An Open Letter on Digital Telephony" is currently circulating the Internet. VTW has also prepared an FAQ for Digital Telephony. Point your gopher to panix.com (port 70) and check under the VTW main menu entry, or use the URL: FOR IMMEDIATE RELEASE NEW YORK, NY -- 08/22/94 -- Contrary to popular belief, not all online civil libertarians support the Government's attempts to ensure the FBI can wiretap every citizen. Voter's Telecommunications Watch (VTW), a New York-based online activism group, working in conjunction with the Electronic Privacy Information Center (EPIC) and other privacy advocates, is working to energize and focus the grassroots opposition to the recently introduced Leahy-Edwards Digital Telephony Bill (H.R. 4922, S. 2375). The Digital Telephony Bill would require telecommunications service providers to design all their equipment to allow FBI agents and other government officials to wiretap any telephone conversation -- only if there is a court order permitting it, of course, the FBI promises. Adding this feature to the telecommunications system is costly -- so costly that the bill appropriates $500 million taxpayer dollars to reimburse phone companies for their "reasonable" expenses. "It's objectionable for the FBI to try to make us pay for invading our own privacy," says Alexis Rosen, co-founder of Public Access Networks Corporation, a regional public Internet provider. According to FBI Director Louis Freeh, there were 183 wiretaps in 1993 that would have been facilitated by the digital telephony mandates. "Should we really spend half a billion dollars for a couple of hundred wiretaps that compromise the privacy of two hundred million Americans?" asks Simona Nass, President of the Society for Electronic Access, a New York-based organization devoted to issues of civil liberties and public access. VTW is spearheading a drive to defeat the bill. Using the Internet to keep millions of electronically-connected citizens informed, VTW workers have put together summaries and analyses of the legislation and are tracking the bill's movements through the byzantine halls of Congress. Using this informations, citizens can inundate their representatives at optimum moments. VTW is tracking each influential legislators' position on the Digital Telephony initiative, and periodically publishes a scorecard summary of their positions, party, districts and contact information. To access VTW's anti-Digital Telephony effort, join the VTW electronic mailing list by sending Internet e-mail to vtw-list-request(a)panix.com. Information is also available via Internet Gopher in the VTW area of gopher.panix.com (port 70). For further information, contact Steven Cherry at 718-596-2851. PRESS CONTACT: Steven Cherry (718) 596-2851(voice mail) stc(a)acm.org (electronic mail) ------------------------------------------------------------------------------- SAMPLE LETTER TO THE EDITOR [Note, this is Steven Cherry's "Open Letter" on Digital Telephony. Please do not submit it to the New York Times. -Shabbir] An Open Letter Regarding Digital Telephony Digital Telephony, embodied in bills entered into Congress by Sen. Leahy (S.B. 2375) and Rep. Edwards (HR. 4922), would require that telecommunications carriers alter their equipment so as to allow wiretaps and similar surveillance to be performed at the companies' offices, or the offices of law enforcement. In a word, to make telecommunications equipment, "wiretap friendly"; to make a wiretap order executable "at the press of a button." With the help of some civil liberties activists, the bill admirably distinguishes between common carriers and information services. Only the former are subject to its provisions. But the distinction, while clear in the abstract, is hard to make in practice. The mom-and-pop neighborhood bulletin board service or Internet provider is excluded, but even if it is providing store-and-forward message-passing for an individual or other small provider? Indeed, the very definition of common carrier in the proposed legislation is problematic, as the definition relies on that used in the Communications Act of 1934, when just now that Act is being overhauled finally, after sixty years. The bill's authors have sensibly and cleverly left out of the legislation all the details of implementation. It is impossible to object to the bill on the grounds of being unworkable. It is also difficult to object on grounds of the risks to individual privacy, insofar as the risks are largely unquantifiable by virtue of being largely unknown. The very clever lack of any practical detail, however, leads the prudent citizen to question the public expenditure of $500,000,000 -- the figure is likely far too high, or far too low. Indeed, all we know is it is unlikely to be correct, and we therefore object to it as being unrealistic to the needs of the enterprise. In point of fact, one other thing is known about this figure -- it is but a fraction of the total expenditures resulting from the mandates of the bill. The balance will be borne by the common carriers, who, in turn, will either have to raise rates, reduce services, or restrict investment and expansion of their business at the very moment in the history of telecommunications that calls for them to do just the opposite. Indeed, the very forces of technological change that caused law enforcement to request this bill demand that it be defeated. We would like to return to the issue of increased risks for a moment. While unquantifiable, they are equally undeniable. The more facile the system, the more it will be overused and error-ridden. We must of course balance risk with reward. Who would refuse an extra paycheck for fear of getting a papercut? We must ask, what are the rewards of digital telephony? The FBI Director has variously stated the number of cases where a wiretapping was subverted by a digital switch or signal, offering contradictory figures from a low of 80 to a high of 183. The Director has not said all of them, or even any of them, were cases where a conviction was not obtained, or where a conviction could have been obtained with the wiretap, or could only have been attained with a wiretap. Of course, only these last possible instances really lend any justification to digital telephony. It is quite clear that digital technology offers more challenges to law enforcement than digital switches and signals. The object of a wiretap can easily use unbreakable encryption to protect the privacy of his or her communications. While the transmission of a message would be intercepted, the content would still evade the eyes and ears of law enforcement. Indeed, any, or all, of these 80 or 183 cases could have been subsequently frustrated by encryption even had digital telephony solved the initial digital barrier. Let us state the potential rewards as generously as possible -- or even more generously than possible. There were approximately 1000 wiretaps in 1993. Let us imagine, contrary to actual fact, all of these to be subverted by digital technology. Let us imagine the number to double in coming years. (Any or all of which could remain private through encryption.) 2000 cases. Weighed against these are the 200 million Americans whose security and privacy are compromised by digital telephony. Well, what if the number of wiretaps doubles again, and again and again? Don't 20,000 or 30,000 wiretaps, hypothetically, justify? Perhaps. But what kind of society needs so many police listening in on the private lives of so many people? At what point do we regret the lack of a public policy debate on mass wiretapping of the American citizenry? We do not live in a police state nor will we. And so we are back to supposing a massive technological effort at great expense to achieve a modest wiretapping program of small, perhaps almost nonexistent, benefit. To sum up, it is as if the entire city of population 25,000, were to have its telephone system restructured, its citizen's phone privacy compromised, all to make effective a wiretap on a single alleged drug peddler or gangster, which wiretap may or may not help in convicting the offender, if indeed he or she is guilty. All at a cost of $62,500 to the taxpayers, and more to the local telephone companies and their ratepayers. For all these reasons, the unclarity, the expense, the risks to privacy, and the lack of substantive benefits, separately and together, we oppose this bill. Steven Cherry stc(a)acm.org ------------------------------------------------------------------------------- CONTACT INFORMATION The Voters Telecomm Watch is a volunteer organization dedicated to monitoring federal legislation that affects telecommunications and civil liberties. We are based primarily out of New York, though we have volunteers throughout the US. Voters Telecomm Watch keeps scorecards on legislators' positions on legislation that affects telecommunications and civil liberties. If you have updates to a legislator's positions, from either: -public testimony, -reply letters from the legislator, -stated positions from their office, please contact vtw(a)vtw.org so they can be added to this list. Voice mail: (718) 596-2851 General questions: vtw(a)vtw.org Mailing List Requests: vtw-list-request(a)vtw.org Press Contact: stc(a)vtw.org Gopher URL: gopher://gopher.panix.com:70/11/vtw WWW URL: We're working on it. :-) -------------------------------------------------------------------------------

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Civil crypto anarchy
by John Young 17 Dec '03

17 Dec '03

Responding to msg by nobody(a)ds1.wu-wien.ac.at () on Sun, 28 Aug 2:32 AM >So basically the protocols are interesting in an >academic way, and we could sit here and discuss the >possibilities, but then I suppose a discussion about >atomic bombs will likely be of greater impact on our >future than crypto anarchy will. Out of your several thoughful comments this one strikes some sparks. Terror of nuclear weapons is universal. Nothing about crypto anarchy is terrifying (yet). A link between the two is not fanciful because of the challenge to those who hold secrets posed by crypto anarchy. One singularity of the nuclear arsenal was that few people actually know its capability. Its secrecy is a part of the threat. The same is true of the more general national security apparatus, most of whose power derives from privileged knowledge of weapon-systems capabilities. By extension of state power, under the rubric of national security, to other areas of government, often under the guise of intelligence and law enforcement needs, we have a society where a small number of economic, scientific, political, military and law enforcement persons hold privileged secrets and a very large citizenry who does not. Because of suspected abuse of privilege, these keepers of secrets are no longer trusted. Electoral politics, once thought to offer means to throw the scoundrels out, now feeds this suspicion, rather than relieving it, because little of entrenched power structures are changed by the voting process. The public process merely cosmetizes the means for exploiting the the secret privileges of the few. The crypto and related technological and civil issues discussed on this list might be viewed as exploring how to redirect the science and technology, heretofore used sustain a national security-driven economy, toward creating the apparatus for a more just and benefical civil society, one less fraught with military, police and economic insecurity and fear of the tools of privileged secrecy. Mastering cryptography and devising ways to put it to remunerative use are honorable and constructive alternatives to enduring unresponsive government. If successful they will set examples, and provide tools, for others to diminish state dependency. However, there is still the task of proving that crypto anarchy is not itself a play for power by those who write and master its cryptographic code. But better to test that in the public arena rather remain hidden and protected by state secrecy. Fierce opposition should be expected, not least by demonizing crypto anarchy. It will probably begin within the crypto anarchy enterprise under the guise of skeptical criticism and provocative baiting. It is worth recalling that classical black anarchy, the secret, lethal version as distinguished from open black flag type, is used by despots to justify their ruthless measures. Black anarchists, as agents of despots, mingle with avowed flag-wavers to spy and provoke acts that lead to repressive crackdowns. Black anarchists never announce themselves as such but may freely admit to being "anarchistic" as a wild-eyed subterfuge. Inept provocations sometimes reveal them but the most able are never detected. John

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Re: mondex
by Martin Janzen 17 Dec '03

17 Dec '03

Ryan Lackey wrote: >Does anyone know how open the Mondex architecture is? Is it in any way >possible to set up a competing system with your own card manufacture >and issuing bodies for currencies which can be used in deployed Mondex >POS terminals without too much hassle? >[...] Wesley Felter <wesf(a)mail.utexas.edu> wrote: >As I understand it, Mondex is a completely closed system. Everything that >you don't absolutely need to know is undocumented. Since you can settle >offline, the potential for fraud is frightening; unless I'm getting the >benefit of these, um, weaknesses in the system, I don't want there to be >any. The lack of privacy seems to be somewhat of a smokescreen; since you >can settle offline, they don't have a really accurate way of tracking >transactions except at the interface between e$ and other forms of money >or goods (like their POS terminals and ATMs). > >Can you hack Mondex? They say you can't... David Jones,a computer science professor at McMaster University and president of Electronic Frontier Canada, has written an interesting article on the subject of Mondex security: >Here's my latest article published online in "The Convergence". >Please visit the web page version because it has lots of hyperlinks >to related documents, including some never before published on the Net >(e.g., Australian bank report on Mondex security) > > http://theconvergence.com/columns/djones/07121997/ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mondex: A House of Smart-Cards? With e-cash, privacy is illusory and security is questionable by David Jones Mondex International has already conceded that its electronic 'cash' isn't really as private as they once claimed. Now critics are questioning whether their security is all it's cracked up to be. If crooks managed to create counterfeit cyber-cash, and if Mondex failed to detect it quickly enough, the deposits backing up the electronic currency could be drained dry, leaving customers out of pocket -- unable to redeem the 'value' on their cards. Do participating banks have any contingency plans for what Mondex calls its 'meltdown scenario'? [...] - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- Martin Janzen janzen(a)idacom.hp.com

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