Encyclopedia of Computer Science and Technology

146 digital cashcould be worked backward easily if the person had theappropriate key.The second idea was that of key exchange. In classicalcryptography, there is a single key used for both encryptionand decryption. In such a case it is absolutely vital to keepthe key secret from any third party, so arrangements haveto be made in advance to transmit and protect the key.Diffie, however, was able to work out the theory for asystem that generates pairs of mathematically interrelatedkeys: a private key and a public key. Each participantpublishes his or her public key, but keeps the correspondingprivate key secret. If one wants to send an encryptedmessage to someone, one uses that person’s public key(obtained from the electronic equivalent of a phone directory).The resulting message can only be decrypted by theintended recipient, who uses the corresponding secret,private key.The public key system can also be used as a form of“digital signature” for verifying the authenticity of a message.Here a person creates a message encrypted with his orher private key. Since such a message can only be decryptedusing the corresponding public key, any other person canuse that key (together with a trusted third-party key service)to verify that the message really came from its purportedauthor.Diffie and Hellman’s 1976 paper in the IEEE Transactionson Information Theory began boldly with the statementthat “we stand today on the brink of a revolution in cryptography.”This paper soon came to the attention of threeresearchers who would create a practical implementationcalled RSA (for Rivest, Shamir, and Adelman).Through the 1980s Diffie, resisting urgent invitationsfrom the NSA, served as manager of secure systems researchfor the phone company Northern Telecom, designing systemsfor managing security keys for packet-switched datacommunications systems (such as the Internet).In 1991 Diffie was appointed Distinguished Engineerfor Sun Microsystems, a position that has left him free todeal with cryptography-related public policy issues. Thebest known of these issues has been the Clipper Chip, aproposal that all new computers be fitted with a hardwareencryption device that would include a “back door” thatwould allow the government to decrypt data. Along withmany civil libertarians and privacy activists, Diffie did notbelieve users should have to trust largely unaccountablegovernment agencies for the preservation of their privacy.Their opposition was strong enough to scuttle the ClipperChip proposal by the end of the 1990s. Another proposal,using public key cryptography but having a third-party“key escrow” agency hold the keys for possible criminalinvestigation, also fared poorly. In 1998 Diffie and SusanLandau wrote Privacy on the Line, a book about the politicsof surveillance and encryption. The book was revised andexpanded in 2007.Diffie has received a number of awards for both technicalexcellence and contributions to civil liberties. These includethe IEEE Information Theory Society Best Paper Award(1979), the IEEE Donald Fink Award (1981), the ElectronicFrontier Foundation Pioneer Award (1994), and even theNational Computer Systems Security Award (1996), given bythe NIST and NSA.Further ReadingDiffie, Whitfield. “Interview with Whitfield Diffie on the Developmentof Public Key Cryptography.” Conducted by FrancoFurger; edited by Arnd Weber, 1992. Available online. URL:http://www.itas.fzk.de/mahp/weber/diffie.htm. Accessed September12, 2007.Diffie, Whitfield, and Susan Landau. Privacy on the Line: the Politicsof Wiretapping and Encryption. Updated and expanded ed.Cambridge, Mass.: MIT Press, 2007.Kahn, David. The Codebreakers: The Story of Secret Writing. Reviseded. New York: Scribner, 1996.Levy, Steven. Crypto: How the Code Rebels Beat the Government:Saving Privacy in the Digital Age. New York: Viking Penguin,2001.digital cashAlso called digital money or e-cash, digital cash representsthe attempt to create a method of payment for online transactionsthat is as easy to use as the familiar bills and coinsin daily commerce (see e-commerce). At present, creditcards are the principal means of making online payments.While using credit cards takes advantage of a well-establishedinfrastructure, it has some disadvantages. From asecurity standpoint, each payment potentially exposes thepayer to the possibility that the credit card number andpossibly other identifying information will be diverted andused for fraudulent transactions and identity theft. Whilethe use of secure (encrypted) online sites has reduced thisrisk, it cannot be eliminated entirely (see computer crimeand security). Credit cards are also impracticable for verysmall payments from cents to a few dollars (such as foraccess to magazine articles) because the fees charged by thecredit card companies would be too high in relation to thevalue of the transaction.One way to reduce security concerns is to make transactionsthat are anonymous (like cash) but guaranteed.Products such as DigiCash and CyberCash allow users topurchase increments of a cash equivalent using their creditcards or bank transfers, creating a “digital wallet.” The usercan then go to any Web site that accepts the digital cash andmake a payment, which is deducted from the wallet. Themerchant can verify the authenticity of the cash throughits issuer. Since no credit card information is exchangedbetween consumer and merchant, there is no possibilityof compromising it. The lack of wide acceptance and standardshas thus far limited the usefulness of digital cash.The need to pay for small transactions can be handledthrough micropayments systems. For example, usersof a variety of online publications can establish accountsthrough a company called Qpass. When the user wants toread an article from the New York Times, for example, thefee for the article (typically $2–3) is charged against theuser’s Qpass account. The user receives one monthly creditcard billing from Qpass, which settles accounts with thepublications. Qpass, eCharge, and similar companies havehad modest success. A similar (and quite successful) serviceis offered by companies such as PayPal and Billpoint,