This is all very nice. But if the government can get away with outlawing crypto, it's a simple matter for them to outlaw any stream of data they can't read or don't like. And who says that the burden of proof will remain on them? Think about RICO. You're not necessarily dealing with rational, technically aware people. You're dealing with law enforcement, judges, and juries. Is this paranoia? Maybe. There was recently a series of stories on RISKS recently about people who had warrants issued and their houses entered on the basis of unusual electrical consumption or heat output. Yes, people were monitoring these things. Do you not think that if crypto were outlawed, that they couldn't get a warrant to enter your house or office based on unidentifiable or suspicious data coming out of it? And even if they couldn't prove anything, you still need to convince them to give back your computer and every other piece of digital equipment they confiscated. Steganography is useful to keep them from noticing you. But it's still low-bandwidth, because unless you're in the business of distributing video, you're going to look really strange sending megabytes of gif's over and over again to the same strange addresses (anonymous remailers). Once they do notice you, you're going to have to be a lot more careful. I see steganography to be useful in sending short messages, once codewords, etc. have been agreed upon out-of-band. It's just not useful for anything like the cypherpunks mailing list, or even for personal messages unless it is used sparingly. Marc