$1 Million Code Crack

John Young jya at pipeline.com
Fri Aug 22 08:32:32 PDT 1997

   $treet Journal, August 22, 1997, p. A7A.

   Hackers' Paradise: Get Wealthy Legally By Cracking a Code

   Crypto-Logic Offers to Pay $1 Million to the Breaker Of
   Encryption for E-Mail 

   By Rodney Ho

   A start-up company would like you to hack your way to $1

   Crypto-Logic Corp. of Austin, Texas, claims to have created
   an encryption system for electronic mail so foolproof that
   it can't be broken. If someone can figure out a special
   encrypted e-mail message within a year, the company says it
   will pay a reward of $1 million.

   But wait. The technology Crypto-Logic is using for the
   contest hasn't exactly been foolproof. The three computers
   needed to create the contest's Web site unexpectedly
   scrambled data in the site last week, said David Neeley,
   vice president and chief operating officer.

   The breakdown forced him to backtrack from last week's
   announcement that the contest would begin last Friday.
   Instead, he spent several days attempting to fix the
   computers, but to no avail. On Monday, he had to get
   replacement computers. "I've got thousands of dollars worth
   of machinery that's not worth blowing up," he grouses. But
   he adds, "I regard this as my screw-up. In this world,
   there are no excuses." He finally got the contest running
   Wednesday, at www.ultimateprivacy.com.

   On the bright side, cryptologists agree that the
   decades-old encryption method that Crypto-Logic is claiming
   to use -- called a "one-time pad" -- is theoretically
   unbreakable. Each "pad" has a set of uniquely random
   digital symbols that are coded to the actual message. The
   recipient uses the same symbols to decrypt the message. The
   pads are used only once.

   To limit the possibility of leaks, Crypto-Logic Chairman
   Stan Spence is the only person who knows the message that
   was encrypted. The solution is kept in a NationsBank vault
   in Austin, Mr. Spence says. In addition, Mr. Neeley says
   the $1 million is backed by an insurance company he won't

   Several other companies have held similar contests,
   typically offering more modest sums.

   Jim Bidzos, president of RSA Data Security Inc. in Redwood
   City, Calif., says his company frequently holds break-the-
   code contests to test how tough certain encryption systems
   are. But he and other security experts are skeptical of
   Crypto-Logic's assertions. "Anyone who says their system is
   bulletproof is either a liar or stupid," says Winn
   Schwartau, a Largo, Fla., security expert.

   Mr. Neeley admits his integrity is on the line. "If I'm
   wrong," he notes, "we're out of business."


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