Making Commerce Safe D. Crocker Brandenburg Consulting – Preliminary – Not for distribution

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 2 Boldly go... v Internet was (sort of) –Small (sort of) (very) –Friendly (very) –Open –Casual v Internet has become (every body/where) –Huge (every body/where) –Competitive and –Closed and open and –Casual and formal Where no public network has gone before... v Commerce changes things

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 3 Internet for commerce? v Strong pressures emerging –Businesses now online –Reduced access costs –Global “reach”

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 4 Operating a global Internet v Scaling –A chicken in every pot! v Security –Military vs. commercial vs. personal v Management –Interconnection  interoperability –Sometimes  always

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 5 Professional operations v Old news! –Internet commercial since 1990 v For professional operation, use professional provider –However, inter-provider management warrants improvement

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 6 Basic algorithms Msg Hash Msg Hash ++ Ÿ Ÿ + + Key PRIV-ORIG DigitalSignatureDigitalSignature + Key DATA Ÿ Ÿ EncryptDataEncryptData Msg Hash Msg Hash + Key DATA + Key PUB-RECIP Key PUB-RECIP IntegrityAuthentication (sign) Privacy (seal) ŸŸ EncryptKeyEncryptKey When do you need each?...not always!

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 7 Security choices v Trusted paths –Simple fall-back v Symmetric keys –Doesn’t scale v Asymmetric keys –Patent licensing –Computational overhead

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 8 Where to put security? My object Object Transport Secure My object FTP Web Secure My object Secure My object Web Security Web Server MTA Security

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 9 Transport security protocols IPSEC IP-level labeling Kerberos (MIT) Third-party service S-KEY Pairwise login S-HTTP (EIT) Negotiate specifical object wrapper security SSL (Netscape) Client-server link STT (Microsoft) (TBD)

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 10 Object security protocols v MOSS (was PEM) –MIME Object Security Service - IETF –RSA + DES –Global, formal key certification hierarchy v PGP –Pretty Good Privacy - Phil Zimmerman –RSA + IDEA –Informal, personal, direct certification v S/MIME –Private, consortium effort –Product “plans” –Specification –

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 11 What is business? v R&D –Search, browse – Test –Coordinate v Support –Discuss –Info push v Marketing –Targeted info push –Survey v Sales –Negotiate –Order, bill, pay –Deliver

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 12 “Commerce” business v Providing infrastructure support for commerce –EDI VAN –Interface to payment/bank service –Digital cash –Electronic notary –Online market/brokerage

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 13 Styles of commerce v Receiver pull –Interactive sessions –Individual, foreground refinement v Sender push –Messaging –Bulk, background distribution (Mark Smith, Intel)

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 14 Bilateral vs. global v On-going relationships (awkward) –Special arrangements ok(awkward) v One-time exchange –“Casual” commerce (difficult) –Needs simple use (difficult) –Needs standard(s) solutions

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 15 Human interaction v R&D, marketing, support –Mostly discussion or bulk transfer –Often ok to have no security, otherwise u Mild sign and/or seal is plenty –Works well today

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 16 EComm classic – EDI v Multiple EDI transports already –Internet is one more v EDI/MIME, proposed standard –Use MIME-based security

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 17 Payment system model Buyer Merchant Issuing Bank Acquiring Bank ClearingHouse 16+4 M. Rose, FV

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 18 Payment system issues v Transaction category “card not present” –For all bankcard approaches for Internet v Issues –Knowing buyer/merchant authorized –Avoiding third-party interception –Interchange, assessment, fees –Retrievals, chargebacks, etc. u Risk management

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 19 Payment system efforts Commercenet First Virtual Holdings CyberCash OpenMarket Netmarket Netscape DigiCash bc/ibc2/softw_ag.html

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 20 Scheme “Clear” ClearingHouse Buyer Merchant 16+4 in the clear! Just trust the net... Easy to capture and replay.

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 21 Scheme “ID” ClearingHouse Buyer Merchant 16+4 ID ID 16+4 Still trust the net, until the next statement... Easy to capture and replay.

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 22 Scheme “ID confirm” ClearingHouse Buyer 16+4 ID ID Confirm ID Merchant Each transaction confirmed. Requires mildly safe user account.

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 23 Scheme “Secure link” ClearingHouse Buyer Merchant Encrypted Same a telephone, but encrypt over Internet. Merchant gets number. Is merchant safe??

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 24 Scheme “Mediated ClearingHouse Buyer Merchant Encrypted16+4 Encrypted 16+4 Encrypted 16+4 Only banks sees data in clear. Limited points of attack.

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 25 Create money v Private buyer and seller transaction – ml v Digicash, Netcash,... –Use public key cryptography u User generates note for bank to sign u Bank debits user account u Merchant checks signature u Bank redeems note; credits merchant –Buyers anonymous

© D. Crocker, Brandenburg Consulting, 1995Making Commerce Safe / 26 SummarySummary v Interesting times ahead v Internet commerce is real –but still formative –very fragmented –moving aggressively