Information Assurance and security ®

What does Information Assurance and security mean?

Information Assurance (IA) refers to the steps involved in protecting information systems, like
computer systems and networks. There are commonly five terms associated with the definition of
information assurance:

 Integrity
 Availability
 Authentication
 Confidentiality
 Non repudiation

 Availability ensures information is ready for use by those that are allowed to access it and at a
required level of performance.

 Integrity ensures that information and associated systems can only be accessed or modified by
those authorized to do so.

 Authentication ensures that users are who they say they are using methods such as individual
user names, passwords, biometrics, digital certificates and security tokens.

 Confidentiality limits access or places restrictions on information such as PII or classified

corporate data.

 Non-repudiation ensures that someone cannot deny an action, such as the receipt of a
message or the authenticity of a statement or contract, because the system provides proof of
the action.
  Information Security: The protection of information and information systems from
unauthorized access, use, disclosure, disruption, modification, or destruction in order to
provide confidentiality, integrity, and availability.

Protecting information and information systems from unauthorized access, use, disclosure, disruption,
modification, or destruction in order to provide—

1. integrity, which means guarding against improper information modification or destruction, and
includes ensuring information non-repudiation and authenticity;
2. confidentiality, which means preserving authorized restrictions on access and disclosure,
including means for protecting personal privacy and proprietary information; and
3. availability, which means ensuring timely and reliable access to and use of information.

Security Properties
The first aspects of this model we will examine are the security properties that can be maintained.
The traditional properties that systems work towards are confidentiality, integrity, and availability,
though other properties are sometimes included. Because different applications will have different
requirements, a system may be designed to maintain all of these properties or only a chosen subset as
needed, as described below.

Confidentiality
When we talk about confidentiality of information, we are talking about protecting the information
from disclosure to unauthorized parties.

Information has value, especially in today’s world. Bank account statements, personal information,
credit card numbers, trade secrets, government documents. Every one has information they wish to
keep a secret. Protecting such information is a very major part of information security.
A very key component of protecting information confidentiality would be encryption. Encryption
ensures that only the right people (people who knows the key) can read the information. Encryption is
VERY widespread in today’s environment and can be found in almost every major protocol in use. A
very prominent example will be SSL/TLS, a security protocol for communications over the internet that
has been used in conjunction with a large number of internet protocols to ensure security.

Other ways to ensure information confidentiality include enforcing file permissions and access control
list to restrict access to sensitive information.

Integrity
Integrity of information refers to protecting information from being modified by unauthorized parties.

Information only has value if it is correct. Information that has been tampered with could prove costly.
For example, if you were sending an online money transfer for $100, but the information was
tampered in such a way that you actually sent $10,000, it could prove to be very costly for you.

As with data confidentiality, cryptography plays a very major role in ensuring data integrity. Commonly
used methods to protect data integrity includes hashing the data you receive and comparing it with the
hash of the original message. However, this means that the hash of the original data must be provided
to you in a secure fashion. More convenient methods would be to use existing schemes such as GPG to
digitally sign the data.

Availability
Availability of information refers to ensuring that authorized parties are able to access the information
when needed.

Information only has value if the right people can access it at the right times. Denying access to
information has become a very common attack nowadays. Almost every week you can find news about
high profile websites being taken down by DDoS attacks. The primary aim of DDoS attacks is to deny
users of the website access to the resources of the website. Such downtime can be very costly. Other
factors that could lead to lack of availability to important information may include accidents such as
power outages or natural disasters such as floods.

How does one ensure data availability? Backup is key. Regularly doing off-site backups can limit the
damage caused by damage to hard drives or natural disasters. For information services that is highly
critical, redundancy might be appropriate. Having a off-site location ready to restore services in case
anything happens to your primary data centers will heavily reduce the downtime in case of anything
happens.

Non-repudiation
The non-repudiation property makes it difficult for any entity to deny that it performed some action. A
system with non-repudiation will allow entities to be held responsible for what they do. Very few
computer systems have effective non-repudiation mechanisms. In general, logging and audit data is
recorded, but is often unreliable. More effective non-repudiation systems require the use of strong
cryptographic mechanisms, though these require significant overhead for additional processing and
key distribution

Authentication
Authentication begins when a user tries to access information. First, the user must prove his access
rights and identity. When logging into a computer, users commonly enter usernames and passwords
for authentication purposes. This login combination, which must be assigned to each user,
authenticates access. However, this type of authentication can be circumvented by hackers.
A better form of authentication, biometrics, depends on the user’s presence and biological makeup
(i.e., retina or fingerprints). This technology makes it more difficult for hackers to break into computer
systems.
The Public Key Infrastructure (PKI) authentication method uses digital certificates to prove a user’s
identity. There are other authentication tools, too, such as key cards and USB tokens. One of the
greatest authentication threats occurs with email, where authenticity is often difficult to verify. For
example, unsecured emails often appear legitimate.

Access control is a security technique that can be used to regulate who or what can view or use
resources in a computing environment.

There are two main types of access control: physical and logical. Physical access control limits access to
campuses, buildings, rooms and physical IT assets. Logical access limits connections to computer
networks, system files and data. The four main categories of access control are:

 Mandatory access control

 Discretionary access control

 Role-based access control

 Rule-based access control

Access control systems perform authorization identification, authentication, access approval, and
accountability of entities through login credentials including passwords, personal identification
numbers (PINs), biometric scans, and physical or electronic keys.
Difference between Authentication vs Authorization ?

The process of securely identifying its users by a system is called authentication. Authentication tries to
identify the identity of the user and whether the user is actually the person he/she is representing to
be. Determining the level of access (what resources are made accessible to the user) of an
authenticated user is done by authorisation.

What is Authentication?

Authentication is used to establish the identity of a user who is trying to use a system. Establishing the
identity is done by testing a unique piece of information that is known only by the user being
authenticated and the authentication system. This unique piece of information could be a password, or
a physical property that is unique to the user such as a fingerprint or other bio metric, etc.
Authentication systems work by challenging the user to provide the unique piece of information, and if
the system can verify that information the user is considered as authenticated. Authentication systems
could range from simple password challenging systems to complicated systems such as Kerberos. Local
authentication methods are the simplest and most common authentication systems used. In this kind
of a system, the usernames and password of authenticated users are stored on the local server system.
When a user wants to login, he/she sends his/her username and password in plaintext to the server. It
compares the received information with the database and if it is a match, the user will be
authenticated. Advanced authentication systems like Kerberos uses trusted authentication servers to
provide authentication services.

What is Authorisation?

The method that is used to determine the resourses that are accessible to an authenticated user is
called authorisation (authorization). For example, in a database, set of users are allowed to update/
modify the database, while some users can only read the data. So, when a user logs in to the database,
the authorisation scheme determines whether that user should be given the ability to modify the
database or just the ability to read the data. So in general, an authorisation scheme determines
whether an authenticated user should be able to perform a particular operation on a particular
resource. In addition, authorisation schemes can use factors like the time of day, physical location,
number of accesses to the system, etc. when authorising users to access some resources in the system.

What is the difference between Authentication and Authorization?

Authentication is the process of verifying the identity of a user who is trying to gain access to a system,
whereas authorisation is a method that is used to determine the recourses that are accessible to an
authenticated user. Even though authentication and authorization performs two different tasks, they
are closely related. In fact, in most of the host-based and client/ server systems, theses two
mechanisms are implemented using the same hardware/ software systems. The authorization scheme
actually depends on the authentication scheme to ensure the identities of the users who enter in to
the system and get access to the resources.

The Difference Between Passive & Active Attacks

Businesses and individuals around the globe have felt the sting of cyber intruders who attack
organizational networks with relative impunity. Some attacks only deface a website, while others result
in significant embarrassment or financial loss. While it is almost impossible to stop some attacks, it is
important for organizations to recognize the difference between passive attacks and active attacks --
and the surprising risks of passive attacks.

Passive Attacks

A passive attack involves someone listening in on telecommunications exchanges or passively

recording computer activity. An example of the former is an attacker sniffing network traffic using a

protocol analyzer or some other packet capturing software. The attacker finds a way to plug into the

network and begins capturing traffic for later analysis. Other attackers rely on keyloggers, usually as a

Trojan horse in a "free download," to record keystrokes such as user IDs and passwords. The goal,

regardless of the method, is just to listen and record the data passing through. The passive attack itself

is not harmful, per se, but the information gathered during the session could be extremely damaging.

Active Attack

Active attacks on computers involve using information gathered during a passive attack, such as user

IDs and passwords, or an outright attack using technological “blunt instruments.” Such instruments

include password crackers, denial-of-service attacks, email phishing attacks, worms and other malware

attacks. In an active attack, the attacker is out to bring a website down, steal information or even
destroy computing equipment. As network administrators install defenses against existing attack tools,

hackers develop more sophisticated tools and the game of technology leapfrog continues.

Various types of attacks

1. Interception

2. Interruption

3. Modification

4. Fabrication

5.Replay

Interception Attacks - This can be either an active or passive process. In a networked environment,
a passive interception might involve someone who routinely monitors network traffic. Active
interception might include putting a computer system between sender and receiver to capture
information as it is sent. From the perspective of interception, this process is covert. The last thing a
person on an intercept mission wants is to be discovered. Intercept missions can occur for years
without the knowledge of the intercept parties.

Interruption Attacks : This type of attack is due to the obstruction of any kind during the
communication process between one or more systems. So the systems which are used become
unusable after this attack by the unauthorized users which results in the wastage of systems. An
example of interruption is when a file is corrupted or lost. In general, interruption refers to the
situation in which services or data become unavailable, unusable, destroyed, and so on. In this sense,
denial of service attacks by which someone maliciously attempts to make a service inaccessible to
other parties is a security threat that classifies as interruption.
Modification Attacks - This involves the deletion, insertion, or alteration of information in an
unauthorized manner that is intended to appear genuine to the user. These attacks can be very hard to
detect. The motivation of this type of attack may be to plant information, change grades in a class,
alter credit card records, or something similar. Website defacements are a common form of
modification attacks.

Fabrication Attacks: In this type of attack a fake message is inserted into the network by an
unauthorized user as if it is a valid user. This results in the loss of confidentiality, authenticity and
integrity of the message .Fabrication refers to the situation in which additional data or activity are
generated that would normally not exist. For example, an intruder may attempt to add an entry into a
password file or database. Likewise, it is sometimes possible to break into a system by replaying
previously sent messages
A masquerade attack is an attack that uses a fake identity, such as a network identity, to gain
unauthorized access to personal computer information through legitimate access identification. If an
authorization process is not fully protected, it can become extremely vulnerable to a masquerade
attack. Masquerade attacks
Masquerade attacks can be perpetrated using stolen passwords and logons, by locating gaps in
programs, or by finding a way around the authentication process. The attack can be triggered either by
someone within the organization or by an outsider if the organization is connected to a public network.
The amount of access masquerade attackers get depends on the level of authorization they've
managed to attain. As such, masquerade attackers can have a full smorgasbord of cybercrime
opportunities if they’ve gained the highest access authority to a business organization. Personal
attacks, although less common, can also be harmful.

Replay attacks
Replay attacks are the network attacks in which an attacker spies the conversation between the sender
and receiver and takes the authenticated information e.g. sharing key and then contact to the receiver
with that key. In Replay attack the attacker gives the proof of his identity and authenticity.

Example:

Suppose in the communication of two parties A and B; A is sharing his key to B to prove his identity but
in the meanwhile Attacker C eavesdrop the conversation between them and keeps the information
which are needed to prove his identity to B. Later C contacts to B and prove its authenticity.

Malware
Simply defined, malware is any computer code that has a malicious intent. Malware is often used to
destroy something on a computer or to steal private information. Odds are, nearly everyone with a
computer has fallen victim to some form of malware in their time.

Viruses
As the name implies, viruses make a computer "sick". They infect a computer, just like a real virus that
infects a person, and then they hide inside the depths of the computer. Viruses replicate themselves,
and they survive by attaching to other programs or files. Though viruses are one of the oldest types of
cyber attacks, they can be some of the craftiest. The capability of viruses has evolved, and they are
often hard to spot and remove from a computer ("Current Cyber").
Spyware
Spyware is a form of malware that monitors or spies on its victims. It usually remains in hiding, but
even so, it can log the various activities performed by a user. Spyware is capable of recording
keystrokes (what a user types on the keyboard), which means that the attacker can view passwords
that the victim enters into the computer. Spyware is also used to steal confidential information .

Worms
Similar to viruses, worms replicate themselves many times to fulfill a nefarious purpose. However,
worms differ from viruses in that they do not need to attach themselves to other files or programs.
Worms are capable of surviving all by themselves, and not only do they replicate on a single computer
host, but they can also replicate across an entire network of computers ("Current Cyber"). It is these
features that can make a worm significantly more dangerous than a virus.

Substitution and transposition ciphers are two categories of ciphers used in classical cryptography.
Substitution and transposition differ in how chunks of the message are handled by the encryption
process.

Substitution ciphers
Substitution ciphers encrypt plaintext by changing the plaintext one piece at a time.
The Caesar Cipher was an early substitution cipher. In the Caesar Cipher, each character is shifted three
places up. Therefore, A becomes D and B becomes E, etc…
This table shows “VOYAGER” being encrypted with the Caesar substitution cipher:
 Plaintext V O Y A G E R

Key +3 +3 +3 +3 +3 +3 +3

Ciphertext Y R B D J H U

A more complex substitution cipher would be created if, instead of incrementing each character by
three, we used a more complex key. This table shows a simple substitution cipher with a key of “123”.

Plaintext V O Y A G E R

Key +1 +2 +3 +1 +2 +3 +1

Ciphertext W Q B B I H S

An even more complex substitution cipher can be made by having each character of the alphabet
correspond to a different letter of the alphabet, without a set pattern.

Plaintext A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Key T O E U N Z I A G X P Q Y R H V S M D F C J W B K L

Using this substitution cipher to encrypt VOYAGER would give us these results:

Plaintext V O Y A G E R

Ciphertext J H K T X N M

The Vernam Cipher, or one time pad, is a simple substitution cipher where the key length equals the
message length.
ROT-1 is a simple substitution cipher used to encode messages on Usenet.

Transposition ciphers
Transposition ciphers encrypt plaintext by moving small pieces of the message around. Anagrams are a
primitive transposition cipher.
This table shows “VOYAGER” being encrypted with a primitive transposition cipher where every two
letters are switched with each other:

V O Y A G E R

O V A Y E G R

Substitution and transposition ciphers in modern times

Modern cryptanalysis makes simple substitution and transposition ciphers obsolete.
However, these techniques remain useful for understanding cryptography and the workings of more
complex modern ciphers.

One-time pad (OTP), also called Vernam-cipher or the perfect cipher, is a crypto algorithm
where plaintext is combined with a random key. It is the only existing mathematically unbreakable
encryption.

Used by Special Operations teams and resistance groups during WW2, popular with intelligence
agencies and their spies during the Cold War and beyond, protecting diplomatic and military message
traffic around the world for many decades, the one-time pad gained a reputation as a simple yet solid
encryption system with an absolute security which is unmatched by today's modern crypto algorithms.
Whatever technological progress may come in the future, one-time pad encryption is, and will remain,
the only truly unbreakable system that provides real long-term message secrecy.

We can only talk about one-time pad if some important rules are followed. If these rules are applied
correctly, the one-time pad can be proven unbreakable (see Claude Shannon's "Communication Theory
of Secrecy Systems"). Even infinite computational power and infinite time cannot break one-time pad
encryption, simply because it is mathematically impossible. However, if only one of these rules is
disregarded, the cipher is no longer unbreakable.

 The key is at least as long as the message or data that must be encrypted.
 The key is truly random (not generated by a simple computer function or such)
 Key and plaintext are calculated modulo 10 (digits), modulo 26 (letters) or modulo 2 (binary)
 Each key is used only once, and both sender and receiver must destroy their key after use.
 There should only be two copies of the key: one for the sender and one for the receiver (some
exceptions exist for multiple receivers)

Important note: one-time pads or one-time encryption is not to be confused with one-time keys (OTK)
or one-time passwords (sometimes also denoted as OTP). Such one-time keys, limited in size, are only
valid for a single encryption session by some crypto-algorithm under control of that key. Small one-
time keys are by no means unbreakable, because the security of the encryption depends on the crypto
algorithm they are used for.
What is block cipher and stream cipher?

A block cipher is a method of encrypting text (to produce ciphertext) in which a cryptographic key
and algorithm are applied to a block of data (for example, 64 contiguous bits) at once as a group rather
than to one bit at a time. The main alternative method, used much less frequently, is called the stream
cipher. A block cipher is an encryption algorithm that encrypts a fixed size of n-bits of data - known as a
block - at one time. The usual sizes of each block are 64 bits, 128 bits, and 256 bits. So for example, a
64-bit block cipher will take in 64 bits of plaintext and encrypt it into 64 bits of ciphertext. In cases
where bits of plaintext is shorter than the block size, padding schemes are called into play. Majority of
the symmetric ciphers used today are actually block ciphers. DES, Triple DES, AES, IDEA, and Blowfish
are some of the commonly used encryption algorithms that fall under this group.

Popular block ciphers

DES - DES, which stands for Data Encryption Standard, used to be the most popular block cipher in the
world and was used in several industries. It's still popular today, but only because it's usually included
in historical discussions of encryption algorithms. The DES algorithm became a standard in the US in
1977. However, it's already been proven to be vulnerable to brute force attacks and other cryptanalytic
methods. DES is a 64-bit cipher that works with a 64-bit key. Actually, 8 of the 64 bits in the key are
parity bits, so the key size is technically 56 bits long.

3DES - As its name implies, 3DES is a cipher based on DES. It's practically DES that's run three times.
Each DES operation can use a different key, with each key being 56 bits long. Like DES, 3DES has a block
size of 64 bits. Although 3DES is many times stronger than DES, it is also much slower (about 3x
slower). Because many organizations found 3DES to be too slow for many applications, it never
became the ultimate successor of DES. That distinction is reserved for the next cipher in our list - AES.

AES - A US Federal Government standard since 2002, AES or Advanced Encryption Standard is arguably
the most widely used block cipher in the world. It has a block size of 128 bits and supports three
possible key sizes - 128, 192, and 256 bits. The longer the key size, the stronger the encryption.
However, longer keys also result in longer processes of encryption. For a discussion on encryption key
lengths, read Choosing Key Lengths for Encrypted File Transfers.

Blowfish - This is another popular block cipher (although not as widely used as AES). It has a block size
of 64 bits and supports a variable-length key that can range from 32 to 448 bits. One thing that makes
blowfish so appealing is that Blowfish is unpatented and royalty-free.

Twofish - Yes, this cipher is related to Blowfish but it's not as popular (yet). It's a 128-bit block cipher
that supports key sizes up to 256 bits long.

What is a stream cipher?

A stream cipher is an encryption algorithm that encrypts 1 bit or byte of plaintext at a time. It uses an
infinite stream of pseudorandom bits as the key. For a stream cipher implementation to remain secure,
its pseudorandom generator should be unpredictable and the key should never be reused. Stream
ciphers are designed to approximate an idealized cipher, known as the One-Time Pad.

The One-Time Pad, which is supposed to employ a purely random key, can potentially achieve "perfect
secrecy". That is, it's supposed to be fully immune to brute force attacks. The problem with the one-
time pad is that, in order to create such a cipher, its key should be as long or even longer than the
plaintext. In other words, if you have 500 MegaByte video file that you would like to encrypt, you
would need a key that's at least 4 Gigabits long.

Clearly, while Top Secret information or matters of national security may warrant the use of a one-time
pad, such a cipher would just be too impractical for day-to-day public use. The key of a stream cipher is
no longer as long as the original message. Hence, it can no longer guarantee "perfect secrecy".
However, it can still achieve a strong level of security.

Popular stream ciphers

RC4 - RC4, which stands for Rivest Cipher 4, is the most widely used of all stream ciphers, particularly in
software. It's also known as ARCFOUR or ARC4. RC4 has been used in various protocols like WEP and
WPA (both security protocols for wireless networks) as well as in TLS. Unfortunately, recent studies
have revealed vulnerabilities in RC4, prompting Mozilla and Microsoft to recommend that it be
disabled where possible. In fact, RFC 7465 prohibits the use of RC4 in all versions of TLS.

These recent findings will surely allow other stream ciphers (e.g. SALSA, SOSEMANUK, PANAMA, and
many others, which already exist but never gained the same popularity as RC4) to emerge and possibly
take its place.

Substitution techniques and transposition techniques in detail?

These earlier cryptographic systems are also referred to as Ciphers. In general, a cipher is simply just a
set of steps (an algorithm) for performing both an encryption, and the corresponding decryption.

Caesar Cipher
It is a mono-alphabetic cipher wherein each letter of the plaintext is substituted by another letter to
form the ciphertext. It is a simplest form of substitution cipher scheme.

This cryptosystem is generally referred to as the Shift Cipher. The concept is to replace each alphabet
by another alphabet which is ‘shifted’ by some fixed number between 0 and 25.

For this type of scheme, both sender and receiver agree on a ‘secret shift number’ for shifting the
alphabet. This number which is between 0 and 25 becomes the key of encryption.

The name ‘Caesar Cipher’ is occasionally used to describe the Shift Cipher when the ‘shift of three’ is
used.

Process of Shift Cipher

 In order to encrypt a plaintext letter, the sender positions the sliding ruler underneath the first
set of plaintext letters and slides it to LEFT by the number of positions of the secret shift.

 The plaintext letter is then encrypted to the ciphertext letter on the sliding ruler underneath.
The result of this process is depicted in the following illustration for an agreed shift of three
positions. In this case, the plaintext ‘tutorial’ is encrypted to the ciphertext ‘WXWRULDO’.
Here is the ciphertext alphabet for a Shift of 3 −

 On receiving the ciphertext, the receiver who also knows the secret shift, positions his sliding
ruler underneath the ciphertext alphabet and slides it to RIGHT by the agreed shift number, 3
in this case.

 He then replaces the ciphertext letter by the plaintext letter on the sliding ruler underneath.
Hence the ciphertext ‘WXWRULDO’ is decrypted to ‘tutorial’. To decrypt a message encoded
with a Shift of 3, generate the plaintext alphabet using a shift of ‘-3’ as shown below −

Security Value
Caesar Cipher is not a secure cryptosystem because there are only 26 possible keys to try out. An
attacker can carry out an exhaustive key search with available limited computing resources.

Simple Substitution Cipher

It is an improvement to the Caesar Cipher. Instead of shifting the alphabets by some number, this
scheme uses some permutation of the letters in alphabet.

For example, A.B…..Y.Z and Z.Y……B.A are two obvious permutation of all the letters in alphabet.
Permutation is nothing but a jumbled up set of alphabets.

With 26 letters in alphabet, the possible permutations are 26! (Factorial of 26) which is equal to
4x1026. The sender and the receiver may choose any one of these possible permutation as a
ciphertext alphabet. This permutation is the secret key of the scheme.

Process of Simple Substitution Cipher

 Write the alphabets A, B, C,...,Z in the natural order.

 The sender and the receiver decide on a randomly selected permutation of the letters of the
alphabet.

 Underneath the natural order alphabets, write out the chosen permutation of the letters of the
alphabet. For encryption, sender replaces each plaintext letters by substituting the
permutation letter that is directly beneath it in the table. This process is shown in the
following illustration. In this example, the chosen permutation is K,D, G, ..., O. The plaintext
‘point’ is encrypted to ‘MJBXZ’.

Here is a jumbled Ciphertext alphabet, where the order of the ciphertext letters is a key.

 On receiving the ciphertext, the receiver, who also knows the randomly chosen permutation,
replaces each ciphertext letter on the bottom row with the corresponding plaintext letter in
the top row. The ciphertext ‘MJBXZ’ is decrypted to ‘point’.

Security Value
Simple Substitution Cipher is a considerable improvement over the Caesar Cipher. The possible
number of keys is large (26!) and even the modern computing systems are not yet powerful enough to
comfortably launch a brute force attack to break the system. However, the Simple Substitution Cipher
has a simple design and it is prone to design flaws, say choosing obvious permutation, this
cryptosystem can be easily broken.

Monoalphabetic and Polyalphabetic Cipher

Monoalphabetic cipher is a substitution cipher in which for a given key, the cipher alphabet for each
plain alphabet is fixed throughout the encryption process. For example, if ‘A’ is encrypted as ‘D’, for
any number of occurrence in that plaintext, ‘A’ will always get encrypted to ‘D’.

All of the substitution ciphers we have discussed earlier in this chapter are monoalphabetic; these
ciphers are highly susceptible to cryptanalysis.

Polyalphabetic Cipher is a substitution cipher in which the cipher alphabet for the plain alphabet may
be different at different places during the encryption process. The next two examples, playfair and
Vigenere Cipher are polyalphabetic ciphers.

Playfair Cipher
In this scheme, pairs of letters are encrypted, instead of single letters as in the case of simple
substitution cipher.

In playfair cipher, initially a key table is created. The key table is a 5×5 grid of alphabets that acts as
the key for encrypting the plaintext. Each of the 25 alphabets must be unique and one letter of the
alphabet (usually J) is omitted from the table as we need only 25 alphabets instead of 26. If the
plaintext contains J, then it is replaced by I.

The sender and the receiver deicide on a particular key, say ‘tutorials’. In a key table, the first
characters (going left to right) in the table is the phrase, excluding the duplicate letters. The rest of
the table will be filled with the remaining letters of the alphabet, in natural order. The key table works
out to be −

Process of Playfair Cipher

 First, a plaintext message is split into pairs of two letters (digraphs). If there is an odd number
of letters, a Z is added to the last letter. Let us say we want to encrypt the message “hide
money”. It will be written as −

HI DE MO NE YZ
 The rules of encryption are −

o If both the letters are in the same column, take the letter below each one (going back to
the top if at the bottom)

T U O R I

A L S B C

‘H’ and ‘I’ are in same column, hence take letter below them to
D E F G H
replace. HI → QC

K M N P Q

V W X Y Z

 If both letters are in the same row, take the letter to the right of each one (going back to the
left if at the farthest right)

T U O R I

A L S B C

‘D’ and ‘E’ are in same row, hence take letter to the right of
D E F G H
them to replace. DE → EF

K M N P Q

V W X Y Z

 If neither of the preceding two rules are true, form a rectangle with the two letters and take
the letters on the horizontal opposite corner of the rectangle.
Using these rules, the result of the encryption of ‘hide money’ with the key of ‘tutorials’ would be −

QC EF NU MF ZV

Decrypting the Playfair cipher is as simple as doing the same process in reverse. Receiver has the
same key and can create the same key table, and then decrypt any messages made using that key.

Security Value
It is also a substitution cipher and is difficult to break compared to the simple substitution cipher. As
in case of substitution cipher, cryptanalysis is possible on the Playfair cipher as well, however it would
be against 625 possible pairs of letters (25x25 alphabets) instead of 26 different possible alphabets.

The Playfair cipher was used mainly to protect important, yet non-critical secrets, as it is quick to use
and requires no special equipment.

Vigenere Cipher
This scheme of cipher uses a text string (say, a word) as a key, which is then used for doing a number
of shifts on the plaintext.

For example, let’s assume the key is ‘point’. Each alphabet of the key is converted to its respective
numeric value: In this case,

p → 16, o → 15, i → 9, n → 14, and t → 20.

Thus, the key is: 16 15 9 14 20.

Process of Vigenere Cipher

 The sender and the receiver decide on a key. Say ‘point’ is the key. Numeric representation of
this key is ‘16 15 9 14 20’.

 The sender wants to encrypt the message, say ‘attack from south east’. He will arrange
plaintext and numeric key as follows −
  He now shifts each plaintext alphabet by the number written below it to create ciphertext as
shown below −

 Here, each plaintext character has been shifted by a different amount – and that amount is
determined by the key. The key must be less than or equal to the size of the message.

 For decryption, the receiver uses the same key and shifts received ciphertext in reverse order
to obtain the plaintext.

Security Value
Vigenere Cipher was designed by tweaking the standard Caesar cipher to reduce the effectiveness of
cryptanalysis on the ciphertext and make a cryptosystem more robust. It is significantly more secure
than a regular Caesar Cipher.

In the history, it was regularly used for protecting sensitive political and military information. It was
referred to as the unbreakable cipher due to the difficulty it posed to the cryptanalysis.

Variants of Vigenere Cipher

There are two special cases of Vigenere cipher −

 The keyword length is same as plaintect message. This case is called Vernam Cipher. It is more
secure than typical Vigenere cipher.

 Vigenere cipher becomes a cryptosystem with perfect secrecy, which is called One-time pad.

One-Time Pad
The circumstances are −

 The length of the keyword is same as the length of the plaintext.

  The keyword is a randomly generated string of alphabets.
 The keyword is used only once.
Security Value
Let us compare Shift cipher with one-time pad.

Shift Cipher − Easy to Break

In case of Shift cipher, the entire message could have had a shift between 1 and 25. This is a very
small size, and very easy to brute force. However, with each character now having its own individual
shift between 1 and 26, the possible keys grow exponentially for the message.

One-time Pad − Impossible to Break

Let us say, we encrypt the name “point” with a one-time pad. It is a 5 letter text. To break the
ciphertext by brute force, you need to try all possibilities of keys and conduct computation for (26 x
26 x 26 x 26 x 26) = 265 = 11881376 times. That’s for a message with 5 alphabets. Thus, for a longer
message, the computation grows exponentially with every additional alphabet. This makes it
computationally impossible to break the ciphertext by brute force.

Transposition Cipher
It is another type of cipher where the order of the alphabets in the plaintext is rearranged to create
the ciphertext. The actual plaintext alphabets are not replaced.

An example is a ‘simple columnar transposition’ cipher where the plaintext is written horizontally with
a certain alphabet width. Then the ciphertext is read vertically as shown.

For example, the plaintext is “golden statue is in eleventh cave” and the secret random key chosen is
“five”. We arrange this text horizontally in table with number of column equal to key value. The
resulting text is shown below.
The ciphertext is obtained by reading column vertically downward from first to last column. The
ciphertext is ‘gnuneaoseenvltiltedasehetivc’.

To decrypt, the receiver prepares similar table. The number of columns is equal to key number. The
number of rows is obtained by dividing number of total ciphertext alphabets by key value and
rounding of the quotient to next integer value.

The receiver then writes the received ciphertext vertically down and from left to right column. To
obtain the text, he reads horizontally left to right and from top to bottom row.

RSA Algorithm
Theory: In cryptography, RSA (which stands for Rivest, Shamir and Adleman who first

publicly described it) is an algorithm for public-key cryptography.[1] It is the first algorithm

known to be suitable for signing as well as encryption, and was one of the first great advances in

public key cryptography. RSA is widely used in electronic commerce protocols, and is believed

to be sufficiently secure given sufficiently long keys and the use of up-to-date implementations.

Operation

The RSA algorithm involves three steps: key generation, encryption and decryption.

Key generation
RSA involves a public key and a private key. The public key can be known to everyone and is

used for encrypting messages. Messages encrypted with the public key can only be decrypted

using the private key. The keys for the RSA algorithm are generated the following way:

1.Choose two distinct prime numbers p and q.

 For security purposes, the integers p and q should be chosen at random, and

should be of similar bit-length. Prime integers can be efficiently found using a

primality test.

2. Compute n = pq.

 n is used as the modulus for both the public and private keys

3. Compute (n) = (p 1)(q 1), where is Euler's totient function.

4. Choose an integer e such that 1 < e < (n) and gcd(e, (n)) = 1, i.e. e and (n) are

coprime.

 e is released as the public key exponent.

 e having a short bit-length and small Hamming weight results in more efficient

encryption - most commonly 0x10001 = 65537. However, small values of e (such as

3) have been shown to be less secure in some settings.[4]

5. Determine d = e1

mod (n); i.e. d is the multiplicative inverse of e mod (n).

 This is more clearly stated as solve for d given (d*e)mod (n) = 1

 This is often computed using the extended Euclidean algorithm.
 d is kept as the private key exponent.

The public key consists of the modulus n and the public (or encryption) exponent e. The private

key consists of the private (or decryption) exponent d which must be kept secret.

Notes:

 An alternative, used by PKCS#1, is to choose d matching de 1 mod with =

lcm(p 1,q 1), where lcm is the least common multiple. Using instead of (n) allows
 more choices for d. can also be defined using the Carmichael function, (n).

 The ANSI X9.31 standard prescribes, IEEE 1363 describes, and PKCS#1 allows, that p

and q match additional requirements: be strong primes, and be different enough that Fermat

factorization fails.

Encryption

Alice transmits her public key (n,e) to Bob and keeps the private key secret. Bob then wishes to

send message M to Alice.

He first turns M into an integer m, such that 0 < m < n by using an agreed-upon reversible

protocol known as a padding scheme. He then computes the ciphertext c corresponding to

c = me

(mod n). This can be done quickly using the method of exponentiation by squaring. Bob then

transmits c to Alice.

Decryption

Alice can recover m from c by using her private key exponent d via computing

m = cd

(mod n). Given m, she can recover the original message M by reversing the padding scheme.

A worked example

Here is an example of RSA encryption and decryption. The parameters used here are artificially

small, but one can also use OpenSSL to generate and examine a real keypair.

1. Choose two distinct prime numbers, such as

p = 61 and q = 53.

2. Compute n = pq giving

n = 61 · 53 = 3233.

3. Compute the totient of the product as (n) = (p 1)(q 1) giving

(3233) = (61 1)(53 1) = 3120.

4. Choose any number 1 < e < 3120 that is coprime to 3120. Choosing a prime number

for e leaves us only to check that e is not a divisor of 3120.

Let e = 17.

5. Compute d, the modular multiplicative inverse of yielding

d = 2753.

The public key is (n = 3233, e = 17). For a padded plaintext message m, the encryption

function is m17 (mod 3233).

The private key is (n = 3233, d = 2753). For an encrypted ciphertext c, the decryption

function is c2753 (mod 3233). For instance, in order to encrypt m = 65, we calculate

c = 6517 (mod 3233) = 2790. To decrypt c = 2790, we calculate

m = 27902753 (mod 3233) = 65.

Both of these calculations can be computed efficiently using the square-and-multiply

algorithm for modular exponentiation. In real life situations the primes selected would be

much larger; in our example it would be relatively trivial to factor n, 3233, obtained

from the freely available public key back to the primes p and q. Given e, also from the

public key, we could then compute d and so acquire the private key.

Practical implementations use Chinese Remainder theorem to speed up the calculation

using modulus of factors (mod p*q using mod p and mod q).

The values dp, dq and qInv, which are part of the private key are computed as follows:

dp = d mod (p 1) = 2753 mod (61 1) = 53

dq = d mod (q 1) = 2753 mod (53 1) = 49

qInv = q

1 mod p = 53

1 mod 61 = 38 (Hence: qInv * q mod p = 38 *

53 mod 61 = 1 )

Here is how dp, dq and qInv are used for efficient decryption. (Encryption is efficient by

choice of public exponent e)

 m1 = cdp mod p = 279053 mod 61 = 4

 m2 = cdq mod q = 279049 mod 53 = 12
 h = (qInv * (m1 m2)) mod p = (38 * 8) mod 61 = 1
 m = m2 + h * q = 12 + 1 * 53 = 65 (same as above but computed more
 efficiently)

/* C program for the Implementation Of RSA Algorithm */

#include< stdio.h>

#include< conio.h>

int phi,M,n,e,d,C,FLAG;

int check()

int i;

for(i=3;e%i==0 && phi%i==0;i+2)

FLAG = 1;

return;

FLAG = 0;

}
void encrypt()

int i;

C = 1;

for(i=0;i< e;i++)

C=C*M%n;

C = C%n;

printf("\n\tEncrypted keyword : %d",C);

void decrypt()

int i;

M = 1;

for(i=0;i< d;i++)

M=M*C%n;

M = M%n;

printf("\n\tDecrypted keyword : %d",M);

void main()

int p,q,s;

clrscr();

printf("Enter Two Relatively Prime Numbers\t: ");

scanf("%d%d",&p,&q);

n = p*q;
phi=(p-1)*(q-1);

printf("\n\tF(n)\t= %d",phi);

do

printf("\n\nEnter e\t: ");

scanf("%d",&e);

check();

}while(FLAG==1);

d = 1;

do

s = (d*e)%phi;

d++;

}while(s!=1);

d = d-1;

printf("\n\tPublic Key\t: {%d,%d}",e,n);

printf("\n\tPrivate Key\t: {%d,%d}",d,n);

printf("\n\nEnter The Plain Text\t: ");

scanf("%d",&M);

encrypt();

printf("\n\nEnter the Cipher text\t: ");

scanf("%d",&C);

decrypt();

getch();

}
/*************** OUTPUT *****************

Enter Two Relatively Prime Numbers : 7 17

F(n) = 96

Enter e : 5

Public Key : {5,119}

Private Key : {77,119}

Enter The Plain Text : 19

Encrypted keyword : 66

Enter the Cipher text : 66

Decrypted keyword : 19 */

Secret Sharing and Splitting

Our program is actually an implementation of two different methods of distributing

a share of the secret key equally among several different parties.

The first way, Secret Splitting, gives each person 1 piece of the key, and it

requires all the pieces to reconstruct the secret key[SC96]. The second way,

Secret Sharing, gives each person 1 piece of the key, but it only requires a

certain number of the total pieces to reconstruct the secret key[SC96]. Each

has its place in real world applications, and each can be properly implemented

to best fit the situation.

Secret Splitting

The first mode which does the splitting of the secret key, is the secret splitting

mode. This mode takes the number of pieces, X, which are required, and

the key, K, to generate X equally important pieces. To generate X pieces

of your key, you create X − 1 random numbers. After P1, P2, P3, . . . , PX−1,

random numbers are created using a secure random number generator (this

prevents someone from trying to duplicate the splitting procedure), you then

operate on these pieces.

PX = P1 ⊕ P2 ⊕ P3 ⊕ . . . ⊕ PX−1 ⊕ K

Now to the users you give the PX pieces, and you destroy K. While from

this method it may seem as though the final piece is the only one with any

value relating to the key itself, this is not the case. With the XOR function

(⊕) each piece is inherently important in the reconstruction of the key, if any

bits in any of the pieces are changed, then the key is not recoverable. To

reassemble the key, you do a very similar operation.

K = P1 ⊕ P2 ⊕ P3 ⊕ . . . ⊕ PX−1 ⊕ PX

Some argue that the length of these random numbers should be the same
length as the key. This is to prevent two or more users from determining the

size of the key by looking for similarities. But this result is the same as if

the pieces weren’t the same size as the key, so it provides no extra security.

Secret Sharing

The second mode of splitting in our program is known as Secret Sharing.

This also breaks up the secret number, but now, there is a way to reconstruct

the number without all the pieces. An example of this in the real world

might be something like nuclear launch device, which any three of 5 generals

can launch. This way no single general who goes crazy can launch, but it

does allow for a pair of generals to not have to be at the main launching

base at all times. This is known as a threshold scheme, more specifically

a (m, n) − threshold scheme. For each secret number you make N pieces,

known as shadows, and it only requires M of these shadows to reassemble

the secret number.

Modular arithmetic
Modular arithmetic is basically doing addition (and other operations) not on a line, as you usually
do, but on a circle -- the values "wrap around", always staying less than a fixed number called the
modulus.
To find, for example, 39 modulo 7, you simply calculate 39/7 (= 5 4/7) and take the remainder. In this
case, 7 divides into 39 with a remainder of 4. Thus, 39 modulo 7 = 4. Note that the remainder (when
dividing by 7) is always less than 7. Thus, the values "wrap around," as you can see below:

0 mod 7=0 6 mod 7=6

 1 mod 7=1 7 mod 7=0
2 mod 7=2 8 mod 7=1
3 mod 7=3 9 mod 7=2
4 mod 7=4 10 mod 7=3
5 mod 7=5 etc.
To do modular addition, you first add the two numbers normally, then divide by the modulus and take
the remainder. Thus, (17+20) mod 7 = (37) mod 7 = 2.
Modular arithmetic is not unfamiliar to you; you've used it before when you want to calculate, for
example, when you would have to get up in the morning if you want to get a certain number of hours
of sleep. Say you're planning to go to bed at 10 PM and want to get 8 hours of sleep. To figure out
when to set your alarm for, you count, starting at 10, the hours until midnight (in this case, two). At
midnight (12), you reset to zero (you "wrap around" to 0) and keep counting until your total is 8. The
result is 6 AM. What you just did is to solve (10+8) mod 12. As long as you don't want to sleep for more
than 12 hours, you'll get the right answer using this technique.

Cyber Crime and Cyber Laws:

As Internet usage is growing daily the world is coming closer. The World Wide Web sounds like a vast
phenomenon but surprisingly one of its qualities is bringing the world closer making it a smaller place
to live in for its users. However, it has also managed to create another problem for people who spend
long hours browsing the Cyber World – which is cyber crimes. While law enforcement agencies are
trying to tackle this problem, it is growing steadily and many people have become victims of hacking,
theft, identity theft and malicious software. One of the best ways to avoid being a victim of cyber
crimes and protecting your sensitive information is by making use of impenetrable security that uses a
unified system of software and hardware to authenticate any information that is sent or accessed over
the Internet. However, before you can understand more about this system, let us find out more about
cyber crimes.
Types of Cyber Crimes

When any crime is committed over the Internet it is referred to as a cyber crime. There are many types
of cyber crimes and the most common ones are explained below:

Hacking: This is a type of crime wherein a person’s computer is broken into so that his personal or
sensitive information can be accessed. In the United States, hacking is classified as a felony and
punishable as such. This is different from ethical hacking, which many organizations use to check their
Internet security protection. In hacking, the criminal uses a variety of software to enter a person’s
computer and the person may not be aware that his computer is being accessed from a remote
location.

Theft: This crime occurs when a person violates copyrights and downloads music, movies, games and
software. There are even peer sharing websites which encourage software piracy and many of these
websites are now being targeted by the FBI. Today, the justice system is addressing this cyber crime
and there are laws that prevent people from illegal downloading.

Cyber Stalking: This is a kind of online harassment wherein the victim is subjected to a barrage of
online messages and emails. Typically, these stalkers know their victims and instead of resorting to
offline stalking, they use the Internet to stalk. However, if they notice that cyber stalking is not having
the desired effect, they begin offline stalking along with cyber stalking to make the victims’ lives more
miserable.

Identity Theft: This has become a major problem with people using the Internet for cash transactions
and banking services. In this cyber crime, a criminal accesses data about a person’s bank account,
credit cards, Social Security, debit card and other sensitive information to siphon money or to buy
things online in the victim’s name. It can result in major financial losses for the victim and even spoil
the victim’s credit history.
Malicious Software: These are Internet-based software or programs that are used to disrupt a
network. The software is used to gain access to a system to steal sensitive information or data
or causing damage to software present in the system.

Child soliciting and Abuse: This is also a type of cyber crime wherein criminals solicit minors via
chat rooms for the purpose of child pornography. The FBI has been spending a lot of time
monitoring chat rooms frequented by children with the hopes of reducing and preventing child
abuse and soliciting.

Causes of Cyber Crime

Wherever the rate of return on investment is high and the risk is low, you are bound to find
people willing to take advantage of the situation. This is exactly what happens in cyber crime.
Accessing sensitive information and data and using it means a rich harvest of returns and
catching such criminals is difficult. Hence, this has led to a rise in cyber crime across the world.

Cyber crimes have become a real threat today and are quite different from old-school crimes,
such as robbing, mugging or stealing. Unlike these crimes, cyber crimes can be committed
single handedly and does not require the physical presence of the criminals. The crimes can be
committed from a remote location and the criminals need not worry about the law
enforcement agencies in the country where they are committing crimes. The same systems that
have made it easier for people to conduct e-commerce and online transactions are now being
exploited by cyber criminals.

Categories of Cyber Crime

Cyber crimes are broadly categorized into three categories, namely crime against

1. Individual
2. Property
3. Government

Each category can use a variety of methods and the methods used vary from one criminal to
another.

Individual: This type of cyber crime can be in the form of cyber stalking, distributing
pornography, trafficking and “grooming”. Today, law enforcement agencies are taking this
category of cyber crime very seriously and are joining forces internationally to reach and arrest
the perpetrators.

Property: Just like in the real world where a criminal can steal and rob, even in the cyber world
criminals resort to stealing and robbing. In this case, they can steal a person’s bank details and
siphon off money; misuse the credit card to make numerous purchases online; run a scam to
get naïve people to part with their hard earned money; use malicious software to gain access to
an organization’s website or disrupt the systems of the organization. The malicious software
can also damage software and hardware, just like vandals damage property in the offline world.

Government: Although not as common as the other two categories, crimes against a
government are referred to as cyber terrorism. If successful, this category can wreak havoc and
cause panic amongst the civilian population. In this category, criminals hack government
websites, military websites or circulate propaganda. The perpetrators can be terrorist outfits or
unfriendly governments of other nations

Definition - What does Cyberlaw mean?

Cyberlaw is the area of law that deals with the Internet's relationship to technological and
electronic elements, including computers, software, hardware and information systems (IS).

Cyberlaw is also known as Cyber Law or Internet Law.

Cyberlaws prevent or reduce large scale damage from cybercriminal activities by protecting
information access, privacy, communications, intellectual property (IP) and freedom of speech
related to the use of the Internet, websites, email, computers, cell phones, software and
hardware, such as data storage devices.

The increase in Internet traffic has led to a higher proportion of legal issues worldwide. Because
cyberlaws vary by jurisdiction and country, enforcement is challenging, and restitution ranges
from fines to imprisonment.
What is Identity Theft?
Identity theft is a crime whereby criminals impersonate individuals, usually for financial gain. In

today's society, you often need to reveal personal bits of information about yourself, such as

your social security number, signature, name, address, phone number, cell number or even

banking and credit card information. If a thief is able to access this personal information, he or

she can use it to commit fraud in your name.

Armed with your personal information, a malicious person could do any number of things, like

apply for loans or new credit card accounts. It's possible they could request a billing address

change and run up your existing credit card without your knowledge. A thief could use

counterfeit checks and debit cards or authorize electronic transfers in your name and wipe out

funds in a bank account.

Types of Identity Theft

Identity theft occurs in different forms, including but not limited to computer phishing, 419
scams (named after the Nigerian penal code), Internet auction fraud, magnetic strip skimming
and credit card fraud. All identity theft is an attempt to steal personal information to access
accounts or to open new accounts fraudulently, regardless of the approach.

Electronic Records Laws

It is a federal crime in the United States to access electronic records of another individual
without express consent of the owner or executor of those accounts. This includes medical
records, work-place personnel file records, mortgage or lease records, credit history, tax
records, credit card and bank accounts. Most states offer further protections. In Texas, for
example, it is a crime to knowingly access a computer, computer network or computer system
without the owner’s consent, according to the Victims Initiative for Counseling, Advocacy and
Restoration of the Southwest.

Forgery

Forgery is the act of using another person's signature to obtain a benefit. Forgery can occur
electronically with use of a computer. Identity thieves use another individual's personal
information to open new accounts electronically. When identity thieves open new accounts,
they commit forgery by electronically signing the acceptance and usage agreement.

Phishing

Phishing is the use of legitimate-looking but fraudulent email messages to entice an individual
to access an account online. The account holder is asked to click a link to access her account
online. When she inputs her username and password, the information is transmitted to the
identity thief. Most states have laws against phishing scams, and some come with stiff
penalties. For instance, a criminal convicted of committing a phishing scam can be fined up to
$100,000 per offense in Texas.
 Internet Fraud
Internet fraud is the use of Internet services or software with Internet access to defraud victims
or to otherwise take advantage of them. Internet crime schemes steal millions of dollars each
year from victims and continue to plague the Internet through various methods. Several high-
profile methods include the following:

Business E-Mail Compromise (BEC): A sophisticated scam targeting businesses working

with foreign suppliers and companies that regularly perform wire transfer payments.
The scam is carried out by compromising legitimate business e-mail accounts through
social engineering or computer intrusion techniques to conduct unauthorized transfers
of funds.
Data Breach: A leak or spill of data which is released from a secure location to an
untrusted environment. Data breaches can occur at the personal and corporate levels
and involve sensitive, protected, or confidential information that is copied, transmitted,
viewed, stolen, or used by an individual unauthorized to do so.
Denial of Service: An interruption of an authorized user's access to any system or network,
typically one caused with malicious intent.
E-Mail Account Compromise (EAC): Similar to BEC, this scam targets the general public
and professionals associated with, but not limited to, financial and lending institutions,
real estate companies, and law firms. Perpetrators of EAC use compromised e-mails to
request payments to fraudulent locations.
Malware/Scareware: Malicious software that is intended to damage or disable
computers and computer systems. Sometimes scare tactics are used by the perpetrators
to solicit funds from victims.
Phishing/Spoofing: Both terms deal with forged or faked electronic documents.
Spoofing generally refers to the dissemination of e-mail which is forged to appear as
though it was sent by someone other than the actual source. Phishing, also referred to
as vishing, smishing, or pharming, is often used in conjunction with a spoofed e-mail. It
is the act of sending an e-mail falsely claiming to be an established legitimate business in
an attempt to deceive the unsuspecting recipient into divulging personal, sensitive
information such as passwords, credit card numbers, and bank account information
after directing the user to visit a specified website. The website, however, is not genuine
and was set up only as an attempt to steal the user's information.

Ransomware: A form of malware targeting both human and technical weaknesses in

organizations and individual networks in an effort to deny the availability of critical data
and/or systems. Ransomware is frequently delivered through spear phishing emails to
end users, resulting in the rapid encryption of sensitive files on a corporate network.
When the victim organization determines they are no longer able to access their data,
the cyber perpetrator demands the payment of a ransom, typically in virtual currency
such as Bitcoin, at which time the actor will purportedly provide an avenue to the victim
to regain access to their data.
 Industrial espionage

Industrial espionage is the covert and sometimes illegal practice of investigating

competitors to gain a business advantage. The target of investigation might be a trade
secret such as a proprietary product specification or formula, or information about
business plans. In many cases, industrial spies are simply seeking any data that their
organization can exploit to its advantage.

An industrial spy may be an insider threat, such as an individual who has gained
employment with the company with the purpose of spying or a disgruntled employee
who trades information for personal gain or revenge. Spies may also infiltrate through
social engineering tactics, for example by tricking an employee into divulging privileged
information.

Spies sometimes physically breach the target organization and investigate the premises.
In that case, a spy might search waste baskets or copy files or hard drives of unattended
computers. Increasingly, the intrusion is through the corporate network. Typically, a
targeted attack is conducted to gain initial network access and then an advanced
persistent threat (APT) is carried out for continued data theft. The capacity of cell
phones to record and transmit can also be exploited by leaving a phone in a boardroom,
for example, and monitoring a meeting remotely. Recording devices are also secreted in
a variety of items including eyeglasses, pens and USB sticks.
Recover electronic evidence is just a part of computer forensics. Computer
Forensics is similar to an investigation done by police and special agents to solve a certain
crime. This type of computer evidence analysis is used with advanced applications,
technologies, and hardware to solve a crime.

A computer forensic scientist or expert does the job of solving a crime through analyzing the
data in a computer related to the incident. This may also include electronic mail
conversations, hidden and deleted files. These can also be the study of the flow of
information on multiple computers, and also the exchange of communication from one PC
to another. The result can be used by law enforcement agencies to help recover electronic
evidence related to the crime.
As you may know, computers process data and communicate through binary codes such as
1 and 0. Computers do not understand human language. They translate the binary code
before processing. With forensic science, it is much easier to track the history and trace
certain events related to a crime. By using analysis tools and utilities on a computer, a
scientist or expert can recover electronic evidence to serve as additional evidence.

The majority of us think that the data we deleted from our computer is permanently gone.
In fact, simply pressing the delete key on your keyboard just deletes the file location on the
main database of the hard disk but not the real data itself. With the help of an effective
data recovery tool, files you deleted even a few months ago can be retrieved.
Tracking of electronic mails, instant messaging, and other type of communication being
used by any human in this world is also one aspect of computer forensics. Moreover, with
the help of packet sniffers, this software can easily get information in real time, once placed
in a very convenient data stream. Data being sent from one computer to another computer
can be captured easily. That is how easy it is to recover electronic evidence and trace it
from where it all started and pin point the real person responsible for the crime.

Computer forensics can also be used to provide supporting information and evidence to
help solve a problem. Law enforcement authorities benefit immensely from this technology
by hiring companies which offer this advanced service. The most important thing on this
kind of job is the ability to preserve the integrity of the evidence and trace the main person
who started the crime. Electronic evidence recovery really helps the computer forensics
specialists and experts because it gives them access to deleted, hidden and lost files that
may be critical to proving the case. With the explosion of electronic data, being able to
recover electronic evidence from all types of storage devices so it can be used to prosecute
a crime is absolutely essential.
Computer forensics and online investing tools
is a sub-category of digital forensic science. Computer forensics, in a specific sense,
pertains to legal evidence latent in computer systems and digital storage media units. The
goal of this field is to examine digital media and files in a sound matter with the aim of
recovering, preserving, analyzing, and ultimately identifying facts concerning the
underlying legal matter or situation.
The field of computer forensics is most often connected with the investigation of a wide
variety of computer crimes. In an investigatory sense, the discipline of computer forensics
will incorporate similar techniques and principles found in data recovery

The purpose of a computer forensic examination is to recover data from computers

seized as evidence in criminal investigations. Experts use a systematic approach to
examine evidence that could be presented in court during proceedings. The involvement
of forensic experts needs to be early on in an investigation as they can help in properly
collecting technical material in a way that allows restoring the content without any
damage to its integrity.

Forensic investigation efforts can involve many (or all) of the following steps:
Collection – search and seizing of digital evidence, and acquisition of data
Examination – applying techniques to identify and extract data
Analysis – using data and resources to prove a case
Reporting – presenting the info gathered (e.g., written case report)

Computer forensics is a very important branch of computer science in relation to

computer and Internet related crimes. Earlier, computers were only used to produce data
but now it has expanded to all devices related to digital data. The goal of Computer
forensics is to perform crime investigations by using evidence from digital data to find
who was the responsible for that particular crime.

These computer forensics tools can also be classified into various categories:

Disk and data capture tools

File viewers
File analysis tools
Registry analysis tools
Internet analysis tools
Email analysis tools
Mobile devices analysis tools
Mac OS analysis tools
Network forensics tools
Database forensics tools

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SHA-1 - What is Secure Hash Algorithm-l (SHA-1)?

Security Hash Algorithm (SHA) was developed in 1993 by the National Institute of
Standards and Technology (NIST) and National Security Agency (NSA).
• It was designed as the algorithm to be used for secure hashing in the US Digital
Signature Standard.
• Hashing function is one of the most commonly used encryption methods. A hash is a
special mathematical function that performs one-way encryption.
• SHA-l is a revised version of SHA designed by NIST and was published as a Federal
Information Processing Standard (FIPS).
• Like MD5, SHA-l processes input data in 512-bit blocks.
• SHA-l generates a 160-bit message digest. Whereas MD5 generated message digest of
128 bits.
• The procedure is used to send a non secret but signed message from sender to receiver.
In such a case following steps are followed:
1. Sender feeds a plaintext message into SHA-l algorithm and obtains a 160-bit SHA-l hash.
2. Sender then signs the hash with his RSA private key and sends both the plaintext
message and the signed hash to the receiver.
3. After receiving the message, the receiver computes the SHA-l hash himself and also
applies the sender's public key to the signed hash to obtain the original hash H.

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MD5 - What is Message Digest 5 (MD5)?
• There are a number of popular message digest algorithms known as MD n for various
values of n.
• MD5 is the most popular and is fifth in a series of message digests designed by Ronald
Rivest.
• The basic operation of MD5 is shown in fig.
• This algorithm operates on message 512 bits at a time.
• Messages not multiple of 512 bits are padded with:

1. A string consisting of 1 followed by zeroes, and

2. 64-bit integer that indicates the length of original message, to make the length of the
composite message multiples of 512 bits.
• The message digest calculation begins with a digest value initialized to a constant.
• This value is combined with the first 512 bits of the message to produce a new value for
the digest.
• The new value is than combined with the next 512 bits of the message using the same
transformation.
• This process is repeated on each 512-bit block till the final value of digest is obtained
from the last block of the message.
• The digest is 128-bit long for any message length.

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Digital Signatures- What is Digital Signatures?
• Signature is the proof to the receiver that the document comes from the correct entity.
The person who signs it takes the responsibility of the content present in the document.
• A signature on a document, when verified, is a sign of authentication; the document is
authentic.
• In the networked world, there is a similar need for digital signatures.
•. Authenticating messages using digital signatures requires the following conditions to be
met:
1. The receiver should be able to verify the claimed identity of the sender. For example,
an imposter may advise a bank to transfer money from the account of another person.
The bank should be able to verify the identity of the user before acting on the advice.
2. The sender should not be able to repudiate the contents of the message it sent at a
later date. For example, a person having sent advice to transfer money from his account
should not be able at later date to repudiate the content of the message sent by him. The
bank should be able to prove that he and only he sent the advice and that the contents of
message are unaltered.
3. The receiver should not be able to alter the message or concoct the message himself on
behalf of the sender. This requirement is important to protect the interests of the sender.

• Some important features of digital signatures are:

1. When a document is signed digitally, signature is sent as a separate document. The
receiver receives both documents i.e. the message and the signature and verifies that the
signature belongs to the supposed sender.
2. In order to verify the digital signature, the receiver applies the verification technique to
the combination of the message and the signature.
3. In digital signature, there is one to one relationship between a signature and a
message. Each message has its own signature. The signature of one message cannot be
used for another message.

Keys in digital signature

• The sender signs the document using his private key by applying it to a signing
algorithm.
• The verifier uses the public key of the signer, applied to the verifying algorithm to verify
the document.

Digital signature using Private Key

• Public and private keys possess the property that allows mutual reversal of their
roles, i.e. d, the decryption key can be used for encryption and e, the encryption key can

5
be used for decryption. This property can be used for generating messages with digital
signature.
• Suppose A encrypts a message using its private key QA and sends it to B.

• Since the message has been encrypted using A's private key it bears A's signature on it.
B already knows A's public key PA and decrypts the message received from A.
• The received encrypted message is decrypted using A's public key. So the message is
from A.
• B keeps a copy of the encrypted message so that A cannot refuse sending it.
• B cannot alter the encrypted message or on its own concoct the encrypted message
without A's private key.
• The weakness of this mechanism is that any intruder knowing A's public key can
intercept the message.
• Confidentiality is maintained by second encryption using B's public key.

• A encrypts the message to B using its private key first and then using B's public key.
• B encrypts the received message using its private key and then using A's public key.

Digital Signature using Private Key and Message Digest

• This method applies private key digital signature to the digest of the message rather
than message itself.

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• The basic mechanism used is:

1. This message digest, which is much shorter in length than the message, is encrypted
using private key of the sender (A).
2. Message digest and the message are sent to other end (B). B computes message digest
of the received message part. The encrypted message digest part is decrypted using A's
public key. The received message digest and the computed message digest are compared
to ensure they are same.

3. All the requirements of digital signature are met:

(i) The message digest bears A's signature. Therefore, A cannot repudiate his signature
and the contents of the message digest.
(ii) B cannot alter the content of the message because it cannot generate the message
digest bearing A's signature.

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Introduction to key Management and Diffie hellman key exchange
Key management deals with the secure generation, distribution, and
storage of keys. It plays a vital role in computer security today as practical attacks
on public-key systems are typically aimed at key management as op- posed to the
cryptographic algorithms themselves. This report will investi- gate the techniques
used in the distribution of secret keys used to decrypt and encrypt messages with
particular focus on the Diffie-Hellman distribution scheme.

Essential Principles of Public-key Cryptography

Public key cryptographic systems are based on one-way functions which
convert plain text into ciphertext using a small amount of computing power, but
whose inverse function is extremely expensive to compute. Thus, it is not feasible
for someone to decipher the plain text from the ciphertext in a rea- sonable
amount of time.
The term “trap door” is used to describe the fact that the intended user of
the ciphertext is able to decipher the ciphertext easily since he/she holds the
private key. Finally, public key cryptosystems are usually based on known hard
problems such as taking the discrete logarithms over a finite field (as in the case of
the Diffie-Hellman key exchange). See Figure 1 for an outline of public key
cryptosystems.

Figure 1. The Notion of Public Key Cryptosystems

The Diffie-Hellman Key Exchange

The Diffie-Hellman Key Exchange is one of the more popular and inter- esting
methods of key distribution. It is a pubic-key cryptographic system whose sole
purpose is for distributing keys. Diffie-Hellman is an example of a

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public-key distribution scheme (PKDS) whereby it is used to exchange a sin- gle piece of
information, and where the value obtained is normally used as a session key for a
private-key scheme.²

How Diffie-Hellman Works

The Diffie-Hellman distribution scheme works as follows assuming two
people, named Alice and Bob respectively, wish to exchange a key over an in- secure
communication channel:
1. Both Alice and Bob agree on the selection of a large prime number n, a
primitive element g, and the one-way function f(x) = g% mod n (Note: both n
and g are made public).
2. Alice selects a large random integer a and sends Bob the value A = g& mod n. Bob
selects a large random integer b and sends Alice the value B = g' mod n.
3. Alice computes s = B& mod n (= g*+ mod n). Similarly,
Bob computes s = A' mod n (= g+* mod n).
4. Alice and Bob now both share the same secret key s. The computation of x =
f(¹(y) is extremely hard; therefore, someone attempting to listen to the key-
exchange cannot determine s even by knowing the values of A, B, n, and g.
Figure 2 illustrates a trivial example of the procedure described above for
clarification purposes of the technique.

Source: “Secure Network Communications.” Strong Internet Security.

http://www.strongsec.com/tutorials/security.htm

Figure 2. Diffie-Hellman Algorithm Example

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Authentication
The Diffie-Hellman key exchange is vulnerable to attacks whereby an
intruder intercepts messages between the sender and receiver, and assumes the
identity of the other party (often known as the man in the middle attack).
Consequently, the Diffie-Hellman algorithm should be used with a form of
authentication such as certificates to ensure that symmetric keys are estab-
lished between legitimate parties.

Advantages and Disadvantages

This leads to a summary of the advantages and disadvantages of the Diffie-
Hellman scheme. Its advantages are the security factors with respect to the fact
that solving the discrete logarithm is very challenging, and that the shared key (i.e.
the secret) is never itself transmitted over the channel.

Nonetheless, the algorithm has its share of drawbacks including the fact that there
are expensive exponential operations involved, and the algorithm can- not be used
to encrypt messages - it can be used for establishing a secret key only. There is also
a lack of authentication.²

Alternatives
It is appropriate at this time to consider some of the alternatives to the
Diffie-Hellman key exchange. The first option is the manual exchange of the key
through a non-electronic medium. However, for obvious reasons, this method is
very slow and inefficient. A second approach is to use a key distri- bution center
(KDC) which selects a key and physically delivers it to both parties. Although this
method requires secure links to the KDC or the use of another key to distribute the
new key (i.e. increased cost), it is still very flexi- ble and efficient.

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Public key infrastructure

Public Key Infrastructure (PKI) is a framework that enables integration of various services that
are related to cryptography.

The aim of PKI is to provide confidentiality, integrity, access control, authentication, and most
importantly, non-repudiation.

Non-repudiation is a concept, or a way, to ensure that the sender or receiver of a

message cannot deny either sending or receiving such a message in future. One of
the important audit checks for non-repudiation is a time stamp. The time stamp is
an audit trail that provides information of the time the message is sent by the
sender and the time the message is received by the receiver.

Encryption and decryption, digital signature, and key exchange are the three primary functions
of a PKI.

RSS and elliptic curve algorithms provide all of the three primary functions: encryption and
decryption, digital signatures, and key exchanges. Diffie-Hellmen algorithm supports key
exchanges, while Digital Signature Standard (DSS) is used in digital signatures.

Public Key Encryption is the encryption methodology used in PKI and was initially proposed by
Diffie and Hellman in 1976. The algorithm is based on mathematical functions and uses
asymmetric cryptography, that is, uses a pair of keys.

The image above represents a simple document-signing function. In PKI, every user will have
two keys known as "pair of keys". One key is known as a private key and the other is known as a
public key. The private key is never revealed and is kept with the owner, and the public key is
accessible by every one and is stored in a key repository.

A key can be used to encrypt as well as to decrypt a message. Most importantly, a message that
is encrypted with a private key can only be decrypted with a corresponding public key. Similarly,
a message that is encrypted with a public key can only be decrypted with the corresponding
private key.

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In the example image above, Bob wants to send a confidential document to Alice electronically.
Bob has four issues to address before this electronic transmission can occur:

1. Ensuring the contents of the document are encrypted such that the document is kept
confidential.
2. Ensuring the document is not altered during transmission.
3. Since Alice does not know Bob, he has to somehow prove that the document is indeed
sent by him.
4. Ensuring Alice receives the document and that she cannot deny receiving it in future.
PKI supports all the above four requirements with methods such as secure messaging, message
digests, digital signatures, and non-repudiation services.

Secure messaging

To ensure that the document is protected from eavesdropping and not altered during the transmission, Bob will first
encrypt the document using Alice's public key. This ensures two things: one, that the document is encrypted, and two,
only Alice can open it as the document requires the private key of Alice to open it. To summarize, encryption is
accomplished using the public key of the receiver and the receiver decrypts with his or her private key. In this method,
Bob could ensure that the document is encrypted and only the intended receiver (Alice) can open it. However, Bob
cannot ensure whether the contents are altered (Integrity) during transmission by document encryption alone.

Message digest

In order to ensure that the document is not altered during transmission, Bob performs a hash function on the document.
The hash value is a computational value based on the contents of the document. This hash value is known as
the message digest. By performing the same hash function on the decrypted document the message, the digest can be
obtained by Alice and she can compare it with the one sent by Bob to ensure that the contents are not altered.

This process will ensure the integrity requirement.

Digital signature

In order to prove that the document is sent by Bob to Alice, Bob needs to use a digital signature. Using a digital
signature means applying the sender's private key to the message, or document, or to the message digest. This process
is known as as signing. Only by using the sender's public key can the message be decrypted.

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Bob will encrypt the message digest with his private key to create a digital signature. In the scenario
illustrated in the image above, Bob will encrypt the document using Alice's public key and sign it using
his digital signature. This ensures that Alice can verify that the document is sent by Bob, by verifying the
digital signature (Bob's private key) using Bob's public key. Remember a private key and the
corresponding public key are linked, albeit mathematically. Alice can also verify that the document is not
altered by validating the message digest, and also can open the encrypted document using her private
key.

Message authentication is an authenticity verification procedure that facilitates the

verification of the integrity of the message as well as the authenticity of the source from
which the message is received.

Digital certificate

By digitally signing the document, Bob has assured that the document is sent by him to Alice.
However, he has not yet proved that he is Bob. To prove this, Bob needs to use a digital
certificate.

A digital certificate is an electronic identity issued to a person, system, or an organization by a

competent authority after verifying the credentials of the entity. A digital certificate is a public
key that is unique for each entity. A certification authority issues digital certificates.

In PKI, digital certificates are used for authenticity verification of an entity. An entity can be an
individual, system, or an organization.

An organization that is involved in issuing, distributing, and revoking digital certificates is known
as a Certification Authority (CA). A CA acts as a notary by verifying an entity's identity.

One of the important PKI standards pertaining to digital certificates is X.509. It is a standard
published by the International Telecommunication Union (ITU) that specifies the standard
format for digital certificates.

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 PKI also provides key exchange functionality that facilitates the secure exchange of public keys
such that the authenticity of the parties can be verified.

Needham-Schroeder protocol which is used in kerberos for secure authentication.

We will not be discussing kerberos in this post, but will be discussing the main prerequisite for
understanding kerberos infrastructure. Because Kerberos infrastructure relies on Needham-
Schroeder protocol.
Needham-Schroeder protocol reffers to a communication protocol used to secure an insecure
network. The protocol got its name from the creaters Roger Needham and Michael Schroeder.
There are twotypes of Needham-Schroeder protocol.
1. Needham-Schroeder protocol with symmetric key
2. Needham-Schroeder protocol with assymetric key
3.
Now lets understand Needham-Schroeder protocol with symmetric key encryption because its
the one used in kerberos infrastructure.

Needham-Schroeder protocol allows to prove the identity of the end users communicating, and
also prents a middle man from evesdropping.

We will be using some terms in this document which needs to be understood first.
Nonce is a randomly genrated string which is only valid for some period of time, This is used in
encryption protocols to prevent replay attack. For example if somebody captures a packet
during the communication between me and a shopping website, he can resend the packet
without decrypting it, and the server can accept the packet and do operations on it. To prevent
this, nonce(the random value generated) is added to the data, so as the server can check if that
nonce is valid, or expired.

Lets understand this protocol by taking an example communication between two machines
called Machine A and Machine B.
The main thing in this protocol is that there is a trusted middle man or call him an arbitrator.
This trusted middle man is a server. If an X machine wants to communicate, with Y machine,
then X has to contact the middle man server, saying am interested in communicating with Y.
Lets see how this works.

A = Machine A
B = Machine B
SK(AS) = this is the symmetric key known to Machine A and middle man Server named “S”
SK(BS) = this is the symmetric key known to Machine B and middle man Server named “S”
NON(A) = Nonce generated by Machine A

Needham-Schroeder protocol with symmetric key

1. Needham-Schroeder protocol with assymetric key

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Now lets understand Needham-Schroeder protocol with symmetric key encryption because its
the one used in kerberos infrastructure.
Needham-Schroeder protocol allows to prove the identity of the end users communicating, and
also prents a middle man from evesdropping.
We will be using some terms in this document which needs to be understood first.
Nonce: Nonce is a randomly genrated string which is only valid for some period of time, This is
used in encryption protocols to prevent replay attack. For example if somebody captures a
packet during the communication between me and a shopping website, he can resend the
packet without decrypting it, and the server can accept the packet and do operations on it. To
prevent this, nonce(the random value generated) is added to the data, so as the server can
check if that nonce is valid, or expired.

Lets understand this protocol by taking an example communication between two machines
called Machine A and Machine B.
The main thing in this protocol is that there is a trusted middle man or call him an arbitrator.
This trusted middle man is a server. If an X machine wants to communicate, with Y machine,
then X has to contact the middle man server, saying am interested in communicating with Y.
Lets see how this works.
A = Machine A
B = Machine B
SK(AS) = this is the symmetric key known to Machine A and middle man Server named “S”
SK(BS) = this is the symmetric key known to Machine B and middle man Server named “S”
NON(A) = Nonce generated by Machine A
NON(B) = Nonce generated by Machine B
SK(S) = this is the symmetric key/session key generated by the server for both machine A and
Machine B.

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Lets understand all the messages above mentioned.
Initially before going ahead with the explanation, make it clear that the symmetric keys of both
machine A, Machine B are already shared with the Middle Man server. Also any other machine
in the network also shares its respective Symmetric keys with the Middle Man server.
Message 1: Machine 1 sends a message to Server S saying that i want to communicate with
Machine B.
A -> S: (this message contains A and B and NON(A))
Message 2: Server S sends message 2 back to Machine A containing SK(S), and also one more
copy of SK(S) encrypted with SK(BS), this copy will be send to Machine B by Machine A.
Message 3: Machine A forwards the copy of SK(S), to Machine B, who can decrypt it with the
key it has because it was encrypted by the Middle man server with the Machine B's symmetric
Key SK(BS).
Message 4: Machine B sends back Machine A a nonce value encrypted by SK(S). to confirm that
he has the symmetric key or session key provided by the middle man server.
Message 5: Machine A performs a simple operation on the nonce provided by the Machine B
and resends that back to machine B just to verify Machine A has the key
There are still some vulnerability in this protocol for replay attacks which is fixed by the
timestamp implimentation in this, when used by kerberos.

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 Intrusion detection system

Intrusion detection systems (IDS) are software and/or hardware-based systems that detect
intrusions to your network/host-based on a set of predefined rules. Active IDS attempts to
block attacks, respond with counter measures that are already pre-programmed into the IDS
system or at least alert administrators while the attack progresses. Passive IDS merely log the
intrusion or create audit trails that are apparent after the attack has succeeded.

The term "Intrusion Detection" covers a wide range of technologies that are involved in the
detection, reporting, and correlation or operating system and network security events.
Intrusion detection technologies are detective rather than preventive but they can help
mitigate following type of risks by providing a security administrator with information on
attempted or actual security events.

 Data destruction

 Denial-of-service

 Hostile code, for example buffer overflow attempt

 Network or system eavesdropping

 System or network mapping

 System or network intrusion

 Unathorized access

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Classification of Intrusion Detection System:
Based on the type of systems the IDS protects:

 Network Intrusion Detection System: This system monitors the traffic on individual
networks or subnets by continuously analyzing the traffic and comparing it with the known
attacks in the library. If an attack is detected, an alert is sent to the system administration. It
is placed mostly at important points in the network so that it can keep an eye on the traffic
travelling to and from the different devices on the network. The IDS is placed along the
network boundary or between the network and the server. An advantage of this system is
that it can be deployed easily and at low cost, without having to be loaded for each system.

Network Intrusion Detection System

 Host Intrusion Detection System: Such system works on individual systems where the
network connection to the system, i.e. incoming and outgoing of packets are constantly
monitored and also the auditing of system files is done and in case of any discrepancy, the
system administrator is alerted about the same. This system monitors the operating system
of the computer. The IDS is installed on the computer. Advantage of this system is it can
accurately monitor the whole system and does not require installation of any other
hardware.

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 Host Intrusion Detection System

Based on the method of working:

 Signature based Intrusion Detection System: This system works on the principle of
matching. The data is analyzed and compared with the signature of known attacks. Incase of
any matching, an alert is issued. An advantage of this system is it has more accuracy and
standard alarms understood by user.

Signature based Intrusion Detection System

 Anomaly based Intrusion Detection System: It consists of a statistical model of a normal

network traffic which consists of the bandwidth used, the protocols defined for the traffic,
the ports and devices which are part of the network. It regularly monitors the network
traffic and compares it with the statistical model. In case of any anomaly or discrepancy, the
administrator is alerted. An advantage of this system is they can detect new and unique
attacks.

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Anomaly based Intrusion Detection System

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 Mutual authentication

Mutual authentication, also called two-way authentication, is a process or technology in which

both entities in a communications link authenticate each other. In a network environment,
the client authenticates the server and vice-versa. In this way, network users can be assured
that they are doing business exclusively with legitimate entities and servers can be certain that
all would-be users are attempting to gain access for legitimate purposes. Mutual authentication
is gaining acceptance as a tool that can minimize the risk of online fraud in e-commerce.

With mutual authentication, a connection can occur only when the client trusts the
server's digital certificate and the server trusts the client's certificate. The exchange of
certificates is carried out by means of the Transport Layer Security (TLS) protocol. If the client's
keystore contains more than one certificate, the certificate with the latest timestamp is used to
authenticate the client to the server. This process reduces the risk that an unsuspecting
network user will inadvertently reveal security information to a malicious or insecure Web site.

Fraudulent e-mail messages may still appear in a user's inbox but even if the user clicks on a
dubious link, mechanisms will prevent data input to the resulting Web page. Similarly, an
Internet user cannot disclose authentication credentials to untrusted Web sites visited during
the course of casual Internet surfing, even if a conscious attempt is made to do so. Some
mutual authentication solutions split transmitted and received data into multiple channels,
complicating the task of a malicious hacker. Once a site has been identified as hostile, the user's
computer can be blocked from visiting it or using its features thereafter.

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 Types of Crypto systems
Fundamentally, there are two types of cryptosystems based on the manner in which
encryption-decryption is carried out in the system −

 Symmetric Key Encryption

 Asymmetric Key Encryption

The main difference between these cryptosystems is the relationship between the encryption
and the decryption key. Logically, in any cryptosystem, both the keys are closely associated. It
is practically impossible to decrypt the ciphertext with the key that is unrelated to the
encryption key.

Symmetric Key Encryption

The encryption process where same keys are used for encrypting and decrypting the
information is known as Symmetric Key Encryption.

The study of symmetric cryptosystems is referred to as symmetric cryptography. Symmetric

cryptosystems are also sometimes referred to as secret key cryptosystems.

A few well-known examples of symmetric key encryption methods are − Digital Encryption
Standard (DES), Triple-DES (3DES), IDEA, and BLOWFISH.

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Prior to 1970, all cryptosystems employed symmetric key encryption. Even today, its relevance
is very high and it is being used extensively in many cryptosystems. It is very unlikely that this
encryption will fade away, as it has certain advantages over asymmetric key encryption.

The salient features of cryptosystem based on symmetric key encryption are −

 Persons using symmetric key encryption must share a common key prior to exchange of
information.

 Keys are recommended to be changed regularly to prevent any attack on the system.

 A robust mechanism needs to exist to exchange the key between the communicating
parties. As keys are required to be changed regularly, this mechanism becomes expensive
and cumbersome.

 In a group of n people, to enable two-party communication between any two persons, the
number of keys required for group is n × (n – 1)/2.

 Length of Key (number of bits) in this encryption is smaller and hence, process of
encryption-decryption is faster than asymmetric key encryption.

 Processing power of computer system required to run symmetric algorithm is less.

Challenge of Symmetric Key Cryptosystem

There are two restrictive challenges of employing symmetric key cryptography.

 Key establishment − Before any communication, both the sender and the receiver need to
agree on a secret symmetric key. It requires a secure key establishment mechanism in
place.

 Trust Issue − Since the sender and the receiver use the same symmetric key, there is an
implicit requirement that the sender and the receiver ‘trust’ each other. For example, it
may happen that the receiver has lost the key to an attacker and the sender is not
informed.

These two challenges are highly restraining for modern day communication. Today, people
need to exchange information with non-familiar and non-trusted parties. For example, a

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communication between online seller and customer. These limitations of symmetric key
encryption gave rise to asymmetric key encryption schemes.

Asymmetric Key Encryption

The encryption process where different keys are used for encrypting and decrypting the
information is known as Asymmetric Key Encryption. Though the keys are different, they are
mathematically related and hence, retrieving the plaintext by decrypting ciphertext is feasible.
The process is depicted in the following illustration −

Asymmetric Key Encryption was invented in the 20th century to come over the necessity of
pre-shared secret key between communicating persons. The salient features of this encryption
scheme are as follows −

 Every user in this system needs to have a pair of dissimilar keys, private key and public key.
These keys are mathematically related − when one key is used for encryption, the other
can decrypt the ciphertext back to the original plaintext.

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  It requires to put the public key in public repository and the private key as a well-guarded
secret. Hence, this scheme of encryption is also called Public Key Encryption.

 Though public and private keys of the user are related, it is computationally not feasible to
find one from another. This is a strength of this scheme.

 When Host1 needs to send data to Host2, he obtains the public key of Host2 from
repository, encrypts the data, and transmits.

 Host2 uses his private key to extract the plaintext.

 Length of Keys (number of bits) in this encryption is large and hence, the process of
encryption-decryption is slower than symmetric key encryption.

 Processing power of computer system required to run asymmetric algorithm is higher.

Symmetric cryptosystems are a natural concept. In contrast, public-key cryptosystems are

quite difficult to comprehend.

Data Encryption Standard (DES)

The Data Encryption Standard (DES) is a symmetric-key block cipher published by the
National Institute of Standards and Technology (NIST).

DES is an implementation of a Feistel Cipher. It uses 16 round Feistel structure. The block size
is 64-bit. Though, key length is 64-bit, DES has an effective key length of 56 bits, since 8 of the
64 bits of the key are not used by the encryption algorithm (function as check bits only).
General Structure of DES is depicted in the following illustration −

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Since DES is based on the Feistel Cipher, all that is required to specify DES is −

 Round function

 Key schedule

 Any additional processing − Initial and final permutation

Initial and Final Permutation
The initial and final permutations are straight Permutation boxes (P-boxes) that are inverses of
each other. They have no cryptography significance in DES. The initial and final permutations
are shown as follows −

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Round Function
The heart of this cipher is the DES function, f. The DES function applies a 48-bit key to the
rightmost 32 bits to produce a 32-bit output.

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 Expansion Permutation Box − Since right input is 32-bit and round key is a 48-bit, we first
need to expand right input to 48 bits. Permutation logic is graphically depicted in the
following illustration −

 The graphically depicted permutation logic is generally described as table in DES

specification illustrated as shown −

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 XOR (Whitener). − After the expansion permutation, DES does XOR operation on the
expanded right section and the round key. The round key is used only in this operation.

 Substitution Boxes. − The S-boxes carry out the real mixing (confusion). DES uses 8 S-boxes,
each with a 6-bit input and a 4-bit output. Refer the following illustration −

 The S-box rule is illustrated below −

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  There are a total of eight S-box tables. The output of all eight s-boxes is then combined in to
32 bit section.

 Straight Permutation − The 32 bit output of S-boxes is then subjected to the straight
permutation with rule shown in the following illustration:

Key Generation
The round-key generator creates sixteen 48-bit keys out of a 56-bit cipher key. The process of
key generation is depicted in the following illustration −

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The logic for Parity drop, shifting, and Compression P-box is given in the DES description.

DES Analysis
The DES satisfies both the desired properties of block cipher. These two properties make
cipher very strong.

 Avalanche effect − A small change in plaintext results in the very grate change in the
ciphertext.

 Completeness − Each bit of ciphertext depends on many bits of plaintext.

During the last few years, cryptanalysis have found some weaknesses in DES when key
selected are weak keys. These keys shall be avoided.

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DES has proved to be a very well designed block cipher. There have been no significant
cryptanalytic attacks on DES other than exhaustive key search.

Triple DES

The speed of exhaustive key searches against DES after 1990 began to cause discomfort
amongst users of DES. However, users did not want to replace DES as it takes an enormous
amount of time and money to change encryption algorithms that are widely adopted and
embedded in large security architectures.

The pragmatic approach was not to abandon the DES completely, but to change the manner in
which DES is used. This led to the modified schemes of Triple DES (sometimes known as 3DES).

Incidentally, there are two variants of Triple DES known as 3-key Triple DES (3TDES) and 2-key
Triple DES (2TDES).

3-KEY Triple DES

Before using 3TDES, user first generate and distribute a 3TDES key K, which consists of three
different DES keys K1, K2 and K3. This means that the actual 3TDES key has length 3×56 = 168
bits. The encryption scheme is illustrated as follows −

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The encryption-decryption process is as follows −

 Encrypt the plaintext blocks using single DES with key K1.

 Now decrypt the output of step 1 using single DES with key K2.

 Finally, encrypt the output of step 2 using single DES with key K3.

 The output of step 3 is the ciphertext.

 Decryption of a ciphertext is a reverse process. User first decrypt using K3, then encrypt
with K2, and finally decrypt with K1.

Due to this design of Triple DES as an encrypt–decrypt–encrypt process, it is possible to use a

3TDES (hardware) implementation for single DES by setting K1, K2, and K3 to be the same value.
This provides backwards compatibility with DES.

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Second variant of Triple DES (2TDES) is identical to 3TDES except that K3is replaced by K1. In
other words, user encrypt plaintext blocks with key K1, then decrypt with key K2, and finally
encrypt with K1 again. Therefore, 2TDES has a key length of 112 bits.

Triple DES systems are significantly more secure than single DES, but these are clearly a much
slower process than encryption using single DES.

The more popular and widely adopted symmetric encryption algorithm likely to be
encountered nowadays is the Advanced Encryption Standard (AES). It is found at least six time
faster than triple DES.

A replacement for DES was needed as its key size was too small. With increasing computing
power, it was considered vulnerable against exhaustive key search attack. Triple DES was
designed to overcome this drawback but it was found slow.

The features of AES are as follows −

 Symmetric key symmetric block cipher

 128-bit data, 128/192/256-bit keys

 Stronger and faster than Triple-DES

 Provide full specification and design details

 Software implementable in C and Java

Operation of AES
AES is an iterative rather than Feistel cipher. It is based on ‘substitution–permutation
network’. It comprises of a series of linked operations, some of which involve replacing inputs
by specific outputs (substitutions) and others involve shuffling bits around (permutations).

Interestingly, AES performs all its computations on bytes rather than bits. Hence, AES treats
the 128 bits of a plaintext block as 16 bytes. These 16 bytes are arranged in four columns and
four rows for processing as a matrix −

Unlike DES, the number of rounds in AES is variable and depends on the length of the key. AES
uses 10 rounds for 128-bit keys, 12 rounds for 192-bit keys and 14 rounds for 256-bit keys.

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Each of these rounds uses a different 128-bit round key, which is calculated from the original
AES key.

The schematic of AES structure is given in the following illustration −

Encryption Process
Here, we restrict to description of a typical round of AES encryption. Each round comprise of
four sub-processes. The first round process is depicted below −

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Byte Substitution (SubBytes)
The 16 input bytes are substituted by looking up a fixed table (S-box) given in design. The
result is in a matrix of four rows and four columns.

Shiftrows
Each of the four rows of the matrix is shifted to the left. Any entries that ‘fall off’ are re-
inserted on the right side of row. Shift is carried out as follows −

 First row is not shifted.

 Second row is shifted one (byte) position to the left.

 Third row is shifted two positions to the left.

 Fourth row is shifted three positions to the left.

 The result is a new matrix consisting of the same 16 bytes but shifted with respect to each
other.

MixColumns
Each column of four bytes is now transformed using a special mathematical function. This
function takes as input the four bytes of one column and outputs four completely new bytes,

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which replace the original column. The result is another new matrix consisting of 16 new
bytes. It should be noted that this step is not performed in the last round.

Addroundkey
The 16 bytes of the matrix are now considered as 128 bits and are XORed to the 128 bits of the
round key. If this is the last round then the output is the ciphertext. Otherwise, the resulting
128 bits are interpreted as 16 bytes and we begin another similar round.

Decryption Process
The process of decryption of an AES ciphertext is similar to the encryption process in the
reverse order. Each round consists of the four processes conducted in the reverse order −

 Add round key

 Mix columns

 Shift rows

 Byte substitution

Since sub-processes in each round are in reverse manner, unlike for a Feistel Cipher, the
encryption and decryption algorithms needs to be separately implemented, although they are
very closely related.

AES Analysis
In present day cryptography, AES is widely adopted and supported in both hardware and
software. Till date, no practical cryptanalytic attacks against AES has been discovered.
Additionally, AES has built-in flexibility of key length, which allows a degree of ‘future-proofing’
against progress in the ability to perform exhaustive key searches.

However, just as for DES, the AES security is assured only if it is correctly implemented and
good key management is employed.

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 Modes of operation in cryptography
The modes of operation of block ciphers are configuration methods that allow those
ciphers to work with large data streams, without the risk of compromising the provided
security.

It is not recommended, however it is possible while working with block ciphers, to use
the same secret key bits for encrypting the same plaintext parts. Using one deterministic
algorithm for a number of identical input data, results in some number of identical
ciphertext blocks.

It is a very dangerous situation for the cipher's users. An intruder would be able to get
much information knowing a distribution of identical message parts, even if he would
not be able to break the cipher and discover the original messages.

There exist some ways to blur the cipher output. The idea is to mix the plaintext blocks
(which are known) with the ciphertext blocks (which have been just created), and to use
the result as the cipher input. As a result, the user avoids creating identical output
ciphertext blocks from identical input data. These modifications are called the block
cipher modes of operations.

ECB (electronic codebook) Mode

It is the simplest mode of encryption. Each plaintext block is encrypted separately.
Similarly, each ciphertext block is decrypted separately. Thus, it is possible to encrypt
and decrypt using many threads simultaneously. In this mode, the created ciphertext is
not blurred.

Encryption in the ECB mode

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 Decryption in the ECB mode

A typical example of weakness of encryption using ECB mode is encoding a bitmap

image (for example a .bmp file). Even a strong encryption algorithm that uses ECB
mode, cannot blur efficiently its content.

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 The bitmap image encrypted using DES and the same secret key. The ECB mode was
used for the left image and the CBC mode was used for the right image.

A message that are encrypted using the ECB mode should be extended until a size that is
equal to an integer multiple of the single block length. A popular method of aligning
the length of the last block is about appending an additional bit equal to 1 and then
filling the rest of the block with bits equal to 0. It allows to determine precisely the end
of the original message. There exist more methods of aligning the message size.

Ciphers that are used in ECB mode are more vulnerable to replay attacks.

CBC (cipher-block chaining) Mode

The CBC mode of encryption was invented by IBM in 1976. It is about adding XOR each
plaintext block to the ciphertext block that was previously produced. The result is then
encrypted using the cipher algorithm in the usual way. Each subsequent ciphertext block
depends on the previous one. The first plaintext block is added XOR to a random
initialization vector (commonly referred to as IV). The vector has the same size as
a plaintext block.

Encryption in CBC mode can only be performed by using one thread. Despite this
disadvantage, this is a very popular way of using block ciphers, and it is used in many
various applications.

During decrypting of a ciphertext block, one should add XOR the output data received
from the decryption algorithm to the previous ciphertext block. Because the receiver
knows all the ciphertext blocks just after obtaining the encrypted message, he can
decrypt the message using many threads simultaneously.

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 Encryption in the CBC mode

Decryption in the CBC mode

If one bit of a plaintext message is damaged (for example because of some earlier
transmission error), all subsequent ciphertext blocks will be damaged and it will be
never possible to decrypt the ciphertext received from this plaintext. As opposed
to that, if one ciphertext bit is damaged, only two received plaintext blocks will
be damaged.

A message that is to be encrypted using the CBC mode, should be extended till the size
that is equal to an integer multiple of a single block length (similarly, as in the case of
using the ECB mode).

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 Security of the CBC mode
The initialization vector IV should be created randomly by the sender. During
transmission it should be concatenated with ciphertext blocks, to allow decryption of
the message by the receiver. If an intruder could predict what vector would be used,
then the encryption would not be resistant to chosen-plaintext attacks:

In the example presented above, if the intruder is able to predict that the vector IV1 will
be used by the attacked system to produce the response c1, they can guess which one of
the two encrypted messages m0or m1 is carried by the response c1. This situation breaks
the rule that the intruder shouldn't be able to distinguish between two ciphertexts even
if they have chosen both plaintexts. Therefore, the attacked system is vulnerable
to chosen-plaintext attacks.

If the vector IV is generated based on non-random data, for example the user password,
it should be encrypted before use. One should use a separate secret key for this activity.

The initialization vector IV should be changed after using the secret key a number
of times. It can be shown that even properly created IV used too many times, makes
the system vulnerable to chosen-plaintext attacks. For AES it is estimated to be
248 blocks, while for 3DES it is about 216 plaintext blocks.

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 PCBC (propagating or plaintext cipher-block chaining) Mode
The PCBC mode is similar to the previously described CBC mode. It also mixes bits from
the previous and current plaintext blocks, before encrypting them. In contrast to
the CBC mode, if one ciphertext bit is damaged, the next plaintext block and all
subsequent blocks will be damaged and unable to be decrypted correctly.

In the PCBC mode both encryption and decryption can be performed using only
one thread at a time.

Encryption in the PCBC mode

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 Decryption in the PCBC mode

CFB (cipher feedback) Mode

The CFB mode is similar to the previously described CBC mode. The main difference is
that one should encrypt ciphertext data from the previous round (so not the plaintext
block) and then add the output to the plaintext bits. It does not affect the cipher
security but it results in the fact that the same encryption algorithm (as used for
encrypting plaintext data) should be used during the decryption process.

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 Encryption in the CFB mode

Decryption in the CFB mode

If one bit of a plaintext message is damaged, the corresponding ciphertext block and all
subsequent ciphertext blocks will be damaged. Encryption in CFB mode can
be performed only by using one thread.

On the other hand, as in CBC mode, one can decrypt ciphertext blocks using many
threads simultaneously. Similarly, if one ciphertext bit is damaged, only two received
plaintext blocks will be damaged.

As opposed to the previous block cipher modes, the encrypted message doesn't need
to be extended till the size that is equal to an integer multiple of a single block length.

OFB (output feedback) Mode

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Algorithms that work in the OFB mode create keystream bits that are used
for encryption subsequent data blocks. In this regard, the way of working of the block
cipher becomes similar to the way of working of a typical stream cipher.

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Encryption in the OFB mode

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 Decryption in the OFB mode

Because of the continuous creation of keystream bits, both encryption and decryption
can be performed using only one thread at a time. Similarly, as in the CFB mode, both
data encryption and decryption uses the same cipher encryption algorithm.

If one bit of a plaintext or ciphertext message is damaged (for example because

of transmission error), only one corresponding ciphertext or respectively plaintext bit is
damaged as well. It is possible to use various correction algorithms to restore the
previous value of damaged parts of the received message.

The biggest drawback of OFB is that the repetition of encrypting the initialization vector
may produce the same state that has occurred before. It is unlikely but in such a case
the plaintext will start to be encrypted by the same data as previously.

CTR (counter) Mode

Using the CTR mode makes block cipher way of working similar to a stream cipher. As in
the OFB mode, keystream bits are created regardless of content of encrypting data
blocks. In this mode, subsequent values of an increasing counter are added to
a nonce value (the nonce means a number that is unique: number used once) and
the results are encrypted as usual. The nonce plays the same role as initialization
vectors in the previous modes.

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 Encryption in the CTR mode

Decryption in the CTR mode

It is one of the most popular block ciphers modes of operation. Both encryption
and decryption can be performed using many threads at the same time.

If one bit of a plaintext or ciphertext message is damaged, only one corresponding

output bit is damaged as well. Thus, it is possible to use various correction algorithms
to restore the previous value of damaged parts of received messages.

The CTR mode is also known as the SIC mode (Segment Integer Counter).

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Simple explanation for Elliptic Curve Cryptographic algorithm ( ECC )
Elliptic Curve Cryptography (ECC) was discovered in 1985 by Victor Miller (IBM) and Neil Koblitz
(University of Washington) as an alternative mechanism for implementing public-key
cryptography.

I assume that those who are going through this article will have a basic understanding
of cryptography ( terms like encryption and decryption ) .
The equation of an elliptic curve is given as,

Few terms that will be used,

E -> Elliptic Curve

P -> Point on the curve
n -> Maximum limit ( This should be a prime number )

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 Fig 3
The fig 3 show are simple elliptic curve.

Key Generation
Key generation is an important part where we have to generate both public key and private
key. The sender will be encrypting the message with receiver’s public key and the receiver will
decrypt its private key.

Now, we have to select a number ‘d’ within the range of ‘n’.

Using the following equation we can generate the public key

Q=d*P
d = The random number that we have selected within the range of ( 1 to n-1 ). P is the point on
the curve.
‘Q’ is the public key and ‘d’ is the private key.
Encryption
Let ‘m’ be the message that we are sending. We have to represent this message on the curve.
This have in-depth implementation details. All the advance research on ECC is done by a
company called certicom.
Conside ‘m’ has the point ‘M’ on the curve ‘E’. Randomly select ‘k’ from [1 – (n-1)].
Two cipher texts will be generated let it be C1 and C2.
C1 = k*P
C2 = M + k*Q
C1 and C2 will be send.

Decryption
We have to get back the message ‘m’ that was send to us,

M = C2 – d * C1
M is the original message that we have send.

Proof
How does we get back the message,

M = C2 – d * C1

‘M’ can be represented as ‘C2 – d * C1’

C2 – d * C1 = (M + k * Q) – d * ( k * P ) ( C2 = M + k * Q and C1 = k * P )

= M + k * d * P – d * k *P ( canceling out k * d * P )

= M ( Original Message )

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 E-payment system is a way of making transactions or paying for goods and services
through an electronic medium without the use of check or cash. It’s also called an electronic
payment system or online payment system. Read on to learn more.

The electronic payment system has grown increasingly over the last decades due to the widely
spread of internet-based banking and shopping. As the world advance more on technology
development, a lot of electronic payment systems and payment processing devices have been
developed to increase, improve and provide secure e-payment transactions while decreasing
the percentage of check and cash transaction.methods

E-payment methods could be classified into two areas, which are:

1. Cash Payment System

1. Cash Payment System

Electronic Funds Transfer (EFT): this is an electronic system used to transfer money from one
bank account to another without any cash exchange by hand.

EFT comprises many other concepts of payment system include:

 Direct debit, that is a financial transaction in which the account holder instructs the bank
to collect a specific amount of money from his account electronically for payment of goods
or services.
 E-Check, a digital version of an old paper check. It’s an electronic transfer of money from a
bank account, usually checking account without the use of the paper check.

 Electronic billing: this is another form of electronic funds transfer used by companies or
businesses to collect payments from customers over electronic method.

 Electronic cash (e-Cash): it is a form of an electronic payment system of which certain amount
of money is stored on a client device and made accessible for internet transaction. Electronic
cash is also referred to as digital cash and it make use of e-cash software installed on the user
PC or electronic devices.

 Stored value card: this is another form of EFT used by stores. Stored value card is a card variety
that has a certain amount of money value stored and can be used to perform the transaction in
the issuer store. A typical example of stored value cards are gift cards.

2. Credit Payment System

2. Credit Payment System

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  Credit Card: this is another form of the e-payment system which required the use of the
card issued by a financial institute to the cardholder for making payments online or
through an electronic device without the use of cash.

 E-Wallet: it is a form of prepaid account that stored user’s financial data like debit and credit
card information to make an online transaction easier.
 Smart card: this use a plastic card embedded with the microprocessor that can be loaded with
funds to make transactions and instant payment of bills. It is also known as a chip card.

PAYMENTS OVER INTERNET

 CREDIT CARDS As of 2000, credit cards remained the most common means of online
payment. They were also among the easiest payment methods, for consumers as well as
for merchants. From the consumer's standpoint, ordering merchandise from the
Internet required only entering a credit card number and expiration date in the
appropriate fields on a merchant's Web site. Many consumers felt greater confidence
in online transactions when they used a credit card, knowing that a third party (the
credit card company or issuing bank) was involved and could help protect them against
fraud. In most cases, the consumer's liability for fraudulent credit card charges is limited
to $50.

 For merchants who already accept credit cards offline, taking credit card payments over
the Internet is relatively simple. It basically involves setting up two Web pages, one to
promote the company and its products or services, and the other to process order
information. As Dowling explained, however, it can be difficult for online retailers to
establish the merchant accounts needed to begin accepting credit cards. Many banks
are reluctant to set up accounts for online merchants because they deal with "card-not-
present transactions," or transactions in which the physical credit card and holder's
signature are not used. The approval process for these accounts is usually quite
rigorous, and the fees on sales tend to be higher than those charged to regular
merchants. These high fees can pose a particular problem for online merchants who sell
small-ticket items.

 Once a small business has established a merchant account with a bank, the next step in
accepting credit cards is to select a payment processing firm or service bureau. It is also
necessary to obtain card authorization software—which can be run on a computer
network—or a point-of-sale (POS) terminal to transmit sale data to the payment

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 processing firm via a modem and telephone line. The processing firm checks the validity
of the credit card number, expiration date, and purchase amount, then provides the
merchant with an authorization number. The preferred method for handling online sales
is to pass the transaction information along to the payment processing firm for
authorization while the customer is still online. An e-mail confirmation completes the
transaction.

 SMART CARDS Smart cards are similar to credit cards, except they store information on
an imbedded chip instead of on a magnetic strip on the back. Consumers can load
money into an account on the card by using an automatic teller machine (ATM) or by
placing the card in a slot in a specially equipped computer. The imbedded chip keeps
track of how much money is added to and withdrawn from the account. Smart cards are
already quite popular for online sales in some international markets. According to Vince
Emery in his book How to Grow Your Business on the Internet , they are eventually
expected to combine the features of credit, debit, phone, and other cards in one piece
of plastic.

 DIGITAL CASH Digital cash is a form of electronic currency that functions similarly to a
debit card. Customers can transfer money from savings and checking accounts into an
online cash account, from which they withdraw to make purchases over the Internet.
This form of payment is particularly well suited to purchases of small, low-cost items. In
addition, it offers consumers the benefit of anonymity in their purchases, similar to
using real cash. The basic technology involved in digital cash transactions is public-
key encryption. Digital signatures are used to authenticate the bank issuing the note and
the individual computer user who is spending the money.

 Some people expect digital cash to become the preferred method of online payment in
the near future. "Eventually, people using the Net probably will have digital cash on
their computer much the same as they have bills and coins in their wallet or purse,"
Dowling stated. In fact, digital cash accounts could be integrated into consumers' Web
browsers, and companies that provide content on their Web sites (like online
newspapers and magazines) could charge a nominal fee for surfers to view their sites.
But methods still need to be established to standardize the use of digital cash. As it
stands, consumers sometimes have to install several different payment software
programs to do business with various companies over the Internet.

 ELECTRONIC CHECKS Small businesses can also allow customers to pay for online
purchases by accepting personal or business checks online. "Although not as popular as
credit cards, electronic checks are also accepted by hundreds of merchants on the Net,"
Emery wrote. "While most electronic check schemes require the merchant to use special
software, electronic checks might appeal to you if you do not currently have a credit

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 card merchant account." Online merchants who accept electronic checks generally set
up a form on a Web page and have their customers enter all the information from their
regular checks. The merchant can submit this information to a bank like a regular check.
A digital signature is used in place of a handwritten one to verify the identity of the
customer. One advantage of electronic checks is that it provides customers with a
familiar method of payment. In addition, a number of services are available to simplify
the process for both consumers and merchants.

 SECURE THIRD PARTIES AND ONLINE BANKS Banks have traditionally been reluctant to
do business online because of the perceived security risks. But banks have begun
offering an increasing number of services online in response to customer demands.
Secure third parties may be banks or other institutions that act as middlemen in
financial transactions between merchants and customers. For small businesses,
conducting transactions through a secure third party eliminates the need and expense
of setting up a secure Web site. Secure third parties also provide consumers with added
protection from fraud, since the merchants never handle their credit card numbers.
"Secure third parties will become more popular as smaller merchants with fewer
resources continue migrating on-line," Dowling wrote. "While a small company may
want to keep Web operations in-house, it may not want to purchase or maintain a
secure Web server. Third-party solutions offer an affordable alternative to expensive,
secure servers and local Internet providers that don't offer secure transaction
capability."

 OLD-FASHIONED PAYMENT METHODS A final alternative for companies that conduct

sales over the Internet is to accept payment via traditional, offline methods—by taking
orders through an address or phone number listed on their Web site, for example.
However, experts warn that limiting payment methods in this manner may cost a
company some potential sale.

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 SMART CARDS
A smart card, typically a type of chip card, is a plastic card that contains an embedded
computer chip–either a memory or microprocessor type–that stores and transacts data.
This data is usually associated with either value, information, or both and is stored and
processed within the card's chip. The card data is transacted via a reader that is part of a
computing system. Systems that are enhanced with smart cards are in use today
throughout several key applications, including healthcare, banking, entertainment, and
transportation. All applications can benefit from the added features and security that
smart cards provide. According to Eurosmart, worldwide smart card shipments will grow
10% in 2010 to 5.455 billion cards. Markets that have been traditionally served by other
machine readable card technologies, such as barcode and magnetic stripe, are converting
to smart cards as the calculated return on investment is revisited by each card issuer year
after year.

Applications
First introduced in Europe nearly three decades ago, smart cards debuted as a stored
value tool for payphones to reduce theft. As smart cards and other chip-based cards
advanced, people found new ways to use them, including charge cards for credit
purchases and for record keeping in place of paper.

In the U.S., consumers have been using chip cards for everything from visiting libraries to
buying groceries to attending movies, firmly integrating them into our everyday lives.
Several U.S. states have chip card programs in progress for government applications
ranging from the Department of Motor Vehicles to Electronic Benefit Transfers (EBTs).
Many industries have implemented the power of smart cards in their products, such as
the GSM digital cellular phones as well as TV-satellite decoders.

Why Smart Cards

Smart cards improve the convenience and security of any transaction. They provide
tamper-proof storage of user and account identity. Smart card systems have proven to
be more reliable than other machine-readable cards, like magnetic stripe and barcode,
with many studies showing card read life and reader life improvements demonstrating
much lower cost of system maintenance. Smart cards also provide vital components of
system security for the exchange of data throughout virtually any type of network. They
protect against a full range of security threats, from careless storage of user passwords
to sophisticated system hacks. The costs to manage password resets for an organization
or enterprise are very high, thus making smart cards a cost-effective solution in these
environments. Multifunction cards can also be used to manage network system access
and store value and other data. Worldwide, people are now using smart cards for a wide
variety of daily tasks

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 Modes/ Methods of Payments for E- Payment
The term e-commerce is widely used today. It is an upcoming, fast-spreading way of doing
business and extending to a larger audience base than traditional retail. Ecommerce is the
exchange of goods and services enabled through an electronic method. E-Commerce,
comprises of various categories such as Business to Business, Business to Consumer, Consumer
to Business and Consumer to Consumer. From advertising to paying, everything except delivery
of physical products can technically be done through electronic means. Consumers may choose
different ways to pay for their ecommerce transactions based on their preference. This may be
driven by convenience, availability, security or for other reasons. There are various ways of
making payments through electronic modes such as electronic wallets, smart cards, software
wallets, credit cards, debit cards, netbanking and more. Online stores that collect money from
consumers in any other way than Cash need to rely on a service provider typically known as a
Payment Gateway provider. A payment gateway is an e-commerce application service provider
that propcesses credit card payments for e-businesses and online retailers. It acts as the go
between the consumer who is making purchases and the bank that is authorizing the bank
issued payment instrument such as a credit card to be used for the payment. It is the equivalent
of making a payment over the counter when one is physically purchasing something. These
payment gateways are like the middlemen between the purchaser and the company providing
the product. Payment gateways get their revenues from the merchants to whom they provide
these services. In turn the Payment Gateway has to share some of its merchant fee with the
banks and payment systems companies Some time , such as in Cash on Delivery transactions,
the payments are made directly from the consumer(Buyer) to the Merchant (Seller) that a
product or service is being provided. Direct transactions between the buyer and seller do not
involve the payment gateway and as such the payment gateway is not a party to the
transaction nor does it get revenues from such transactions. Amongst the several payment
gateways in India, some well known payment gateways that are widely used include CCAvenue
& Tech Process. Pay by Amazon has also recently launched its service. Payment Gateways that
act between the bank and the merchant are able to provide efficient services and for that
reason the transaction cost is loaded with the additional costs of the Payment Gateway.
Payment gateways, however, provide a safer platform for the money exchange to take place as
there are lesser chances of being harmed by fraudsters as the Payment Gateway would usually
have its own fraud protection system that protects merchants from such liability. The various
forms of payment for ecommerce are given in the following paragraphs:

Credit cards – The easiest form of electronic money that is available and most widely used
today. There are several million credits cards that are being used to make online payments in
India. Many international sites and mobile commerce sites allow you to pre-store your credit

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card number securely so that you don’t have to key in the number each time. Currently, the
largest user base in e-commerce uses credit cards for payments.

Debit card – The second largest e-commerce payment medium in India Debit Cards and
Netbanking. Very often, for customers who want to stay within their spending capacity, paying
for things online using a debit card proves to be a preferred choice. With the debit card, one
can only pay for purchased goods with the money that already exists in the current or savings
accounts as opposed to the credit card where the amounts that the buyer spends are
accumulated and have to be paid for as a bill at the end of the billing period.

Cash on delivery – CoD has emerged as one of the most sought after services for e-commerce
entities and it is reported that in some cases as high as 50 per cent of orders are placed with
various online retailers with this payment option, while the remaining opt for credit card or
bank payments. In India, many customers tend to prefer CoD as the online payment modes are
yet to catch up in many parts of the country.

Netbanking – Another easy way to make payments for online transactions. It uses a similar
method to the debit card of paying from money that exists in the users current or savings
account but netbanking does not require the user to have a card for the payment purposes.
While completing the purchase the consumer needs to put in their netbanking id and pin.

Mobile Money – Out of India’s 1.2 billion people, only a small percentage have bank accounts.
Amongst that massive unbanked population, many hundreds of millions have mobile phones,
and for them, mobile money is likely to be hugely beneficial. Even for smaller transactions,
where credit cards are not accepted, it might be simpler to just hand over cash. But if you don’t
have sufficient cash, then mobilemoney becomes useful. However, mobile money would be
convenient to buy a movie ticket or pay your utility bills on your phone, where otherwise you
might have to key in your entire credit card number, CVV number, etc, every time you make a
payment. It’s meant for transactions between Rs 50 – Rs 500 to buy things like games, music,
ebooks, and virtual goods in games, and where people may not want to use credit or debit
cards In India, this is a developing payment option and still evolving in terms of regulations and
guidelines. As on date the main method to pay for products using your mobile is still linked to
your bank account. Payments using mobile carrier billing ie where your payments are deducted
from your mobile prepaid balance or billed to your postpaid account are still restricted to
services provided through the mobile operator eg for value added services. Mobile carrier
billing has not yet started for ecommerce transactions though this is expected soon

Reward Points – Some other more indirect ways of online payments are rewards points. On
certain things that are purchased by a person, a number of rewards points will be awarded
which will get added to the buyers account. In the next transaction, the buyer can choose to

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pay for their next purchase using the accumulated rewards points, which will replace what they
would otherwise be paying as money.

Prepaid Cards – this is a relatively new and fast growing payment method. Typically a consumer
may buy or be gifted a prepaid card that can be used online. Usually this would be for a
particular brand or for a retailer. Some online retailers have their own gift cards which are sold
to their customers, who in turn may use it for themselves or as give them as gifts. Gift cards
have their own authentication system and this may vary from issuer to issuer. Summary If you
are a new online retail store or a brand planning to set up an online store, you should contact a
reliable payment gateway partner to assist with getting your online store to accept various
forms of payment as above. For Cash on Delivery and Bank Cheques, you would need to have a
separate process and this would have to be reflected in your webstore software as an option
for consumers to choose. Select a good Payment Gateway provider who gives you the
maximum options and is also constantly adding new options based on the evolving marketplace
and methods of payme

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 What Are Mobile Payments?
There are a few different types of mobile payment systems that all work a bit differently. Some
might require your phone to be near the other device receiving the payment, like with NFC
(near-field communication) payments, while others just use the internet.

Most mobile payment systems can be identified in one of these categories:

Mobile Wallet
The first one is a hyped-up mobile wallet. It’s one of the major types of mobile payment that
many talk about now. Mobile wallet works with “tap-and-go” method or using your mobile
phone’s built-in NFC technology (wireless Near Field Communication that will be explained in
more details in the next post about mobile payment systems) or it could some other method
that let’s pay with just your mobile phone, as you do with the credit card. Making mobile
payments is much easier and faster than paying with cash.

Mobile Phone as Credit Card Terminal

Paying with your mobile phone is cool, but it’s not all you can do with it. You can just as easily
use it to process credit card payments and accept payments from others. Business owners can
really benefit from such a capability – fast and secure payment.

Other Types of Mobile Payments

Apart from mobile wallet apps and using your mobile as a credit card terminal, there are other
types of mobile payments. That phone bumping, I’ve mentioned earlier is also known as P2P or
person-to-person mobile payment. You can pay or send money to your friend via PayPal by
literary bumping your phone with your friend’s phone.
The major providers of P2P mobile payments are PayPal and Serve.
 PayPal was one of the first to introduce a new way to pay for your things in the Internet. Now,
to make a money transfer you simply need to bump iPhones.
 Serve is really similar to PayPal in that sense that it also lets you send money from your bank
account or credit card using your Android, iOS, or Windows device. However, it has some other
useful capabilities, for example you can open subaccounts to manage your funds in a more
efficient way and use prepaid forms of payment

Direct Carrier Billing and Closed Loop Mobile Payments

The last type of mobile payments are less popular solutions that include direct carrier billing
and closed loop mobile payments, but knowing about them a bit more won’t hurt. Closed loop
mobile payments mean that a company opted to develop its own mobile payment solution, for
example Starbucks’s mobile app allows to tip digitally and shake to pay for the coffee.

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 Mobile Card Reader: Some companies offer a small device that plugs into your phone or
tablet that can be used to accept payments from a debit or credit card. These are perfect for
small businesses or even individuals who are accepting payments on the go.

ISO 27001

ISO 27001 is the international standard which is recognised globally for managing risks to the
security of information you hold. Certification to ISO 27001 allows you to prove to your clients
and other stakeholders that you are managing the security of information in your possesion.
ISO 27001:2013 (the current version of ISO 27001) provides a set of standardised requirements
for an information security management system (ISMS). The standard adopts a process
approach for establishing, implementing, operating, monitoring, reviewing, maintaining, and
improving your ISMS.

The ISO 27001 Information Security Management system (ISMS) standard provides a
framework for Information Security Management best practice that helps organisations:

 protect clients and employee information

 manage risks to information security effectively
 achieve compliance
 protects the company's brand image.

Benefits of ISO 27001

Protecting your organisations information is critical for the successful management and smooth
operation of your organization. Completing ISO/IEC 27001 information security management
systems certification will aid your organisation in managing and protecting your valuable data
and information assets.

By achieving certification to ISO 27001 your organisation will be able to reap numerous and
consistent benefits.

Some of the benefits of ISO 27001 are:

 Keeps confidential information secure

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 Provides customers and stakeholders with confidence in how you manage risk
 Allows for secure exchange of information
 Allows you to ensure you are meeting your legal obligations
 Helps you to comply with other regulations (e.g. SOX)
 Provide you with a competitive advantage
 Enhanced customer satisfaction that improves client retention
 Consistency in the delivery of your service or product
 Manages and minimises risk exposure
 Builds a culture of security
 Protects the company, assets, shareholders and directors

Business benefits of ISO 27001

Certification to ISO 27001 is a globally acknowledged mark of compliance and provides huge
business benefits for organizations:

Win business by reassuring potential and existing customers

ISO 27001 certification demonstrates to your customers and stakeholders that you take
cybersecurity seriously. In a world where cyber attacks are ever more frequent and threaten all
organizations, it is a significant advantage to be able to demonstrate your level of cybersecurity
with an internationally accepted certification.

ISO 27001 is also fast becoming a prerequisite when tendering for large-scale and public sector
contracts. ISO 27001 offers a marketing advantage over your competitors and will help you win
and retain business.

Protect your organization’s reputation

Certification to ISO 27001 will ensure your information is protected, helping you avoid data
breaches, fines, and brand damage. It will assure your suppliers, customers, stakeholders, and
staff that you are following fully-auditable best practice, which will increase morale within your
organization and confidence in its competence outside it, improving your reputation and giving
you a competitive edge.

Meet compliance requirements

Creating an ISO 27001-compliant ISMS will also help your organization meet its legal and
regulatory compliance requirements, including state data breach notification laws and federal
regulations such as FISMA, the GLBA, HIPAA, and SOX, and international standards like the PCI
DSS.

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 Chip Card transaction and attacks
Also known as a smart card or memory card. A chip card is a plastic card that has a computer
chip implanted into it that enables the card to perform certain functions. These could include
financial transactions, security system access, and storage of medical or other records.Credit
and debit cards are chip cards, as are security key cards that grant access to restricted areas.
Usually this type of card is easily replaceable in the event of loss or damage. Some chip cards
(i.e. credit and debit cards) also require the use of a separate PIN number.

Chip card attacks

Fake/Doctored Cards

Doctored cards are pre-existing cards that have the magstripe data and the details on the card

face altered (through the use of electro-magnets). When the card is swiped, it will come up

with an error and force the merchant to key in details manually. Fake cards are essentially the

same, but they start from scratch instead of using a pre-existing card.
Skimming

This method involves using reprogrammed technology to collect information off of people’s

cards, or using cameras to record the victim’s PINs. Often, this trick is pulled off at unstaffed

ATMs or gas stations–the fraudster will plant a fake card swiper to pick up numbers from a

magstripe, and a camera or device placed in the keypad to record the PIN. However, it can also

be done within businesses as well: POS terminals can be altered to record card data and PINs,

or employees can use small cardswipes to pick up the data when the card is removed from the

customer’s sight (such as in a restaurant).

Skimming Redux: the Tapping Attack

If you thought we wouldn’t have to worry about skimming anymore once chip cards become

more prevalent, think again. Essentially, the tapping attack is a form of skimming that requires

chipped cards. Remember how chip cards are ultra-secure because the data is encrypted? Turns

out some of the information, like the customer’s PIN, isn’t encrypted when a terminal is talking

to certain types of chip cards (meaning, those types of chip cards where the issuer didn’t invest

in more expensive forms of cryptography). With the information skimmed from this attack, the

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fraudster has enough data to make a functional magstripe-and-PIN card, or has the ability to

access the PIN on a stolen card.

Lost or Stolen Cards

This is the easy one: shady individuals will steal cards to use the cards for their own purposes.

There are some very clever ways to get hold of stolen cards, such as the Courier Scam: a person

pretending to be from your bank calls and claims your card has been compromised, so they

need you to mail your card and PIN back to your bank. They then hire a mail person to collect

your envelope, who gives it to the fraudsters instead of the bank.

Signature Foraging

I don’t think that I need to spend a whole lot of time on this one because I already have: the

signature on a stolen chip-and-signature card, or on a chip-and-PIN card used with a terminal

only enabled for signatures, can easily be foraged.

Fake/Stolen Card Combo

This is the forged card’s more intelligent sibling. There are a few different attacks (that we

know of) that use fake cards, but I’m lumping them together because if you’re a business

owner, it doesn’t matter what sort of trick a fraudster is pulling–you just have to be on the

lookout for fake cards.

Balraj Gill

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