1. ELC 200 Day 9 Copyright © 2007 Pearson Education, Inc.

2. Agenda Begin Discussion on Online Security and Payment systems
Questions?
Assignment 2 Due
Assignment 3 posted
Due Tuesday Feb 9:35 AM
assignment3.pdf
Assignment 4 will be posted this week
Due March 6
Quiz 1 Feb 17
Chap 1-4, Open Book, Open Notes
20 4 points each
4 short 5 points each
On Blackboard, will be available from 7 AM Friday till 7 AM Saturday
1 extra credit question worth 5 points
Begin Discussion on Online Security and Payment systems

3. Possible Bonus Points Questions
Name and origin of 
What does his name mean?
What does he look like all
“grown up”?
Name and origin of
Hic Sunt Dracones
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4. Chapter 5 Online Security and Payment Systems
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Copyright © 2010 Pearson Education, Inc.
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5. Cyberwar: Mutually Assured Destruction 2.0 Class Discussion
What is the difference between hacking and cyberwar?
Why has cyberwar become more potentially devastating in the past decade?
What percentage of computers have been compromised by stealth malware programs?
Will a political solution to MAD 2.0 be effective enough?
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6. CYBER Warfare Russia – Estonia Cyber war Twitter DDoS Korean DDoS
Stuxnet Worm
Taught at US Military academies
bh-fed-03-dodge.pdf
iwar_wise.pdf
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7. DDOS
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8. The E-commerce Security Environment
Overall size and losses of cybercrime unclear
Reporting issues
2009 CSI survey: 49% of respondent firms detected security breach in last year
Of those that shared numbers, average loss $288,000
2010/11 CSI report
Underground economy marketplace:
Stolen information stored on underground economy servers
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9. Copyright © 2010 Pearson Education, Inc.

10. Types of Attacks Against Computer Systems (Cybercrime)
Figure 5.1, Page 266
SOURCE: Based on data from Computer Security Institute, 2009
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11. What Is Good E-commerce Security?
To achieve highest degree of security
New technologies
Organizational policies and procedures
Industry standards and government laws
Other factors
Time value of information
Cost of security vs. potential loss
Security often breaks at weakest link
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12. The E-commerce Security Environment
Figure 5.2, Page 269
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13. Table 5.2, Page 270
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14. General Security Issues at E-Commerce Sites
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15. The Tension Between Security and Other Values
Ease of use:
The more security measures added, the more difficult a site is to use, and the slower it becomes
Public safety and criminal uses of the Internet
Use of technology by criminals to plan crimes or threaten nation-state
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16. Security Threats in the E-commerce Environment
Three key points of vulnerability:
Internet communications channels
Server level
Client level
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17. A Typical E-commerce Transaction
SOURCE: Boncella, 2000.
Figure 5.3, Page 273
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18. Vulnerable Points in an E-commerce Environment
SOURCE: Boncella, 2000.
Figure 5.4, Page 274
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19. Snoop and Sniff
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20. Most Common Security Threats in the E-commerce Environment
Malicious code
Viruses
Macro, file, script
Worms
Trojan horses
Bots, botnets
Unwanted programs
Browser parasites
Adware
Spyware
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21. Spyware infestation. Taken by Brandon Waddell.
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22. Most Common Security Threats (cont.)
Phishing
Deceptive online attempt to obtain confidential information
Social engineering, scams, spoofing legitimate Web sites
Use of information to commit fraudulent acts (access checking accounts), steal identity
Nigerian scam
Hacking and cybervandalism
Hackers vs. crackers
Cybervandalism: Intentionally disrupting, defacing, destroying Web site
Types of hackers: White hats, black hats, grey hats
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23. Copyright © 2010 Pearson Education, Inc.

24. The Players: Hackers, Crackers, and Other Attackers
Original hackers created the Unix operating system and helped build the Internet, Usenet, and World Wide Web; and, used their skills to test the strength and integrity of computer systems
Over time, the term hacker came to be applied to rogue programmers who illegally break into computers and networks
Hacker underground
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25. The Players: Hackers, Crackers, and Other Attackers (cont.)
Uber Haxor
Wizard Internet Hackers
Highly capable attackers
Responsible for writing most of the attacker tools
Crackers
People who engage in unlawful or damaging hacking short for “criminal hackers”
Other attackers
“Script kiddies” are ego-driven, unskilled crackers who use information and software (scripts) that they download from the Internet to inflict damage on targeted sites
Scorned by both the Law enforcement and Hackers communities
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26. Script Kiddies
script kiddies: pl.n.
1. [very common] The lowest form of cracker; script kiddies do mischief with scripts and rootkits written by others, often without understanding the exploit they are using. Used of people with limited technical expertise using easy-to-operate, pre-configured, and/or automated tools to conduct disruptive activities against networked systems. Since most of these tools are fairly well-known by the security community, the adverse impact of such actions is usually minimal.
2. People who cannot program, but who create tacky HTML pages by copying JavaScript routines from other tacky HTML pages. More generally, a script kiddie writes (or more likely cuts and pastes) code without either having or desiring to have a mental model of what the code does; someone who thinks of code as magical incantations and asks only “what do I need to type to make this happen?”
Source:
More info:
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27. How Hackers Hack Many Techniques Social Engineering Cracking
Get someone to give you their password
Cracking
Guessing passwords
A six letter password (no caps)
> 300 million possibilities
Merriam-Webster's citation files, which were begun in the 1880s, now contain 15.7 million examples of words used in context and cover all aspects of the English vocabulary.
Buffer Overflows
Getting code to run on other PCs
Load a Trojan or BackDoor
Snoop and Sniff
Steal data
Denial of Service (DOS)
Crash or cripple a Computer from another computer
Distributed Denial of Service (DDOS)
Crash or cripple a Computer from multiple distributed computers
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28. Maine’s Anti-Hacker laws
§432. Criminal invasion of computer privacy      1. A person is guilty of criminal invasion of computer privacy if the person intentionally accesses any computer resource knowing that the person is not authorized to do so. [1989, c. 620 (new).]      2. Criminal invasion of computer privacy is a Class D crime. [1989, c. 620 (new).]
§433. Aggravated criminal invasion of computer privacy
1. A person is guilty of aggravated criminal invasion of computer privacy if the person:    A. Intentionally makes an unauthorized copy of any computer program, computer software or computer information, knowing that the person is not authorized to do so;  [1989, c. 620 (new).]   B. Intentionally or knowingly damages any computer resource of another person, having no reasonable ground to believe that the person has the right to do so; or  [1989, c. 620 (new).]   C. Intentionally or knowingly introduces or allows the introduction of a computer virus into any computer resource, having no reasonable ground to believe that the person has the right to do so.  [1989, c. 620 (new).][1989, c. 620 (new).]     
2. Aggravated criminal invasion of computer privacy is a Class C crime. [1989, c. 620 (new).]
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29. Most Common Security Threats (cont.)
Credit card fraud/theft
Hackers target merchant servers; use data to establish credit under false identity
Hannaford hack
Spoofing
Pharming
Spam/junk Web sites
Denial of service (DoS) attack
Hackers flood site with useless traffic to overwhelm network
Distributed denial of service (DDoS) attack
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30. Most Common Security Threats (cont.)
Sniffing
Eavesdropping program that monitors information traveling over a network
Insider jobs
Single largest financial threat
Poorly designed server and client software
Mobile platform threats
Same risks as any Internet device
Malware, botnets, vishing/smishing
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31. Protecting Internet communications (encryption)
Technology Solutions
Protecting Internet communications (encryption)
Securing channels of communication (SSL, S-HTTP, VPNs)
Protecting networks (firewalls)
Protecting servers and clients
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32. Tools Available to Achieve Site Security
Figure 5.7, Page 287
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33. Encryption Encryption
Transforms data into cipher text readable only by sender and receiver
Secures stored information and information transmission
Provides 4 of 6 key dimensions of e-commerce security:
Message integrity
Nonrepudiation
Authentication
Confidentiality
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34. What Is Encryption?
A way to transform a message so that only the sender and recipient can read, see, or understand it
Plaintext (cleartext): the message that is being protected
Encrypt (encipher): transform a plaintext into ciphertext
Encryption: a mathematical procedure that scrambles data so that it is extremely difficult for anyone other than authorized recipients to recover the original message
Key: a series of electronic signals stored on a PC’s hard disk or transmitted as blips of data over transmission lines
Plaintext + key = Ciphertext
Ciphertext – key = Plaintext
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35. Symmetric Key Encryption
Message
“Hello”
Encryption
Method &
Key
Encrypted Message
Interceptor
Network
Party A
Party B
Encryption uses a
non-secret encryption method and
a secret key
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36. Simple example (encrypt)
Every letter is converted to a two digit number
A=1, Z = 26
ANTHONY 
Produce any 4 digit key  (10N-1 choices = 9,999)
Add together in blocks of 4 digits
= 3768
= 5662
= 5168
= (pad with 00 to make even)
Send to fellow Spy
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37. Simple example (Decrypt)
Received from fellow Spy
Break down in 4 digits
Get right Key  3654
Subtract key from blocks of 4 digits
= 114
= 2008
= 1514
= 2500
If result is negative add 10000
Break down to 2 digits and decode
01 = A, 14 =N, 20 = T, 08 = H
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38. Symmetric Key Encryption
Sender and receiver use same digital key to encrypt and decrypt message
Requires different set of keys for each transaction
Strength of encryption
Length of binary key used to encrypt data
Advanced Encryption Standard (AES)
Most widely used symmetric key encryption
Uses 128-, 192-, and 256-bit encryption keys
Other standards use keys with up to 2,048 bits
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39. Public Key Encryption Uses two mathematically related digital keys
Public key (widely disseminated)
Private key (kept secret by owner)
Both keys used to encrypt and decrypt message
Once key used to encrypt message, same key cannot be used to decrypt message
Sender uses recipient’s public key to encrypt message; recipient uses his/her private key to decrypt it
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40. Public Key Cryptography – A Simple Case
Figure 5.8, Page 289
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41. Public Key Encryption using Digital Signatures and Hash Digests
Hash function:
Mathematical algorithm that produces fixed-length number called message or hash digest
Hash digest of message sent to recipient along with message to verify integrity
Hash digest and message encrypted with recipient’s public key
Entire cipher text then encrypted with recipient’s private key – creating digital signature – for authenticity, nonrepudiation
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42. Public Key Cryptography with Digital Signatures
Figure 5.9, Page 291
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43. Digital Envelopes Address weaknesses of:
Public key encryption
Computationally slow, decreased transmission speed, increased processing time
Symmetric key encryption
Insecure transmission lines
Uses symmetric key encryption to encrypt document
Uses public key encryption to encrypt and send symmetric key
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44. Creating a Digital Envelope
Figure 5.10, Page 292
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45. Digital Certificates and Public Key Infrastructure (PKI)
Digital certificate includes:
Name of subject/company
Subject’s public key
Digital certificate serial number
Expiration date, issuance date
Digital signature of CA
Public Key Infrastructure (PKI):
CAs and digital certificate procedures
PGP
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46. Digital Certificates and Certification Authorities
Figure 5.11, Page 294
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47. Limits to Encryption Solutions
Doesn’t protect storage of private key
PKI not effective against insiders, employees
Protection of private keys by individuals may be haphazard
No guarantee that verifying computer of merchant is secure
CAs are unregulated, self-selecting organizations
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48. Insight on Society Web Dogs and Anonymity Class Discussion
What are some of the benefits of continuing the anonymity of the Internet?
What are the disadvantages of an identity system?
Are there advantages to an identity system beyond security?
Who should control a central identity system?
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49. Securing Channels of Communication
Secure Sockets Layer (SSL):
Establishes a secure, negotiated client-server session in which URL of requested document, along with contents, is encrypted
S-HTTP:
Provides a secure message-oriented communications protocol designed for use in conjunction with HTTP
Virtual Private Network (VPN):
Allows remote users to securely access internal network via the Internet, using Point-to-Point Tunneling Protocol (PPTP)
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50. Secure Negotiated Sessions Using SSL
Figure 5.12, Page 298
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51. Proxy servers (proxies)
Protecting Networks
Firewall
Hardware or software
Uses security policy to filter packets
Two main methods:
Packet filters
Application gateways
Proxy servers (proxies)
Software servers that handle all communications originating from or being sent to the Internet
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52. Firewalls and Proxy Servers
Figure 5.13, Page 301
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53. Protecting Servers and Clients
Operating system security enhancements
Upgrades, patches
Anti-virus software:
Easiest and least expensive way to prevent threats to system integrity
Requires daily updates
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54. Management Policies, Business Procedures, and Public Laws
U.S. firms and organizations spend 12% of IT budget on security hardware, software, services ($120 billion in 2009)
Managing risk includes
Technology
Effective management policies
Public laws and active enforcement
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55. A Security Plan: Management Policies
Risk assessment
Security policy
Implementation plan
Security organization
Access controls
Authentication procedures, inc. biometrics
Authorization policies, authorization management systems
Security audit
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56. Developing an E-commerce Security Plan
Figure 5.14, Page 303
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57. The Role of Laws and Public Policy
Laws that give authorities tools for identifying, tracing, prosecuting cybercriminals:
National Information Infrastructure Protection Act of 1996
USA Patriot Act
Homeland Security Act
Private and private-public cooperation
CERT Coordination Center
US-CERT
Government policies and controls on encryption software
OECD guidelines
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58. What types of threats do smartphones face?
Insight on Technology Think Your Smartphone Is Secure? Class Discussion
What types of threats do smartphones face?
Are there any particular vulnerabilities to this type of device?
What did Nicolas Seriot’s “Spyphone” prove?
Are apps more or less likely to be subject to threats than traditional PC software programs?
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59. Types of Payment Systems
Cash
Most common form of payment in terms of number of transactions
Instantly convertible into other forms of value without intermediation
Checking Transfer
Second most common payment form in U.S. in terms of number of transactions
Credit Card
Credit card associations
Issuing banks
Processing centers
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60. Types of Payment Systems (cont.)
Stored Value
Funds deposited into account, from which funds are paid out or withdrawn as needed, e.g. debit cards, gift certificates
Peer-to-peer payment systems
Accumulating Balance
Accounts that accumulate expenditures and to which consumers make period payments
e.g. Utility, phone, American Express accounts
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61. Table 5.6, Page 312
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62. E-commerce Payment Systems
Credit cards
55 % of online payments in (U.S.)
Debit cards
28 % online payments in 2009 (U.S.)
Limitations of online credit card payment
Security
Cost
Social equity
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63. How an Online Credit Transaction Works
Figure 5.16, Page 315
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64. E-commerce Payment Systems (cont.)
Digital wallets
Emulates functionality of wallet by authenticating consumer, storing and transferring value, and securing payment process from consumer to merchant
Early efforts to popularize failed
Newest effort: Google Checkout
Digital cash
Value storage and exchange using tokens
Most early examples have disappeared; protocols and practices too complex
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65. E-commerce Payment Systems (cont.)
Online stored value systems
Based on value stored in a consumer’s bank, checking, or credit card account
PayPal, smart cards
Digital accumulated balance payment
Users accumulate a debit balance for which they are billed at the end of the month
Digital checking:
Extends functionality of existing checking accounts for use online
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66. Mobile Payment Systems
Use of mobile handsets as payment devices well- established in Europe, Japan, South Korea
Japanese mobile payment systems
E-money (stored value)
Mobile debit cards
Mobile credit cards
Not as well established yet in U.S
Majority of purchases are digital content for use on cell phone
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67. How has PayPal responded?
Insight on Business Mobile Payment’s Future: Wavepayme, Textpayme Group Discussion
What technologies make mobile payment more feasible now than in the past?
Describe some new experiments that are helping to develop mobile payment systems.
How has PayPal responded?
Why haven’t mobile payment systems grown faster? What factors will spur their growth?
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68. Electronic Billing Presentment and Payment (EBPP)
Online payment systems for monthly bills
65% + of households in 2010 used some EBPP; expected to continue to grow
Two competing EBPP business models:
Biller-direct (dominant model)
Consolidator
Both models are supported by EBPP infrastructure providers
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69. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2011 Pearson Education, Inc.  
Publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc.