Encryption And Its Application To E-Commerce

Encryption and Its Application to E-commerce

The following steps will lead you to a better understanding of the whole literature:

1. Realize the major concerns in e-commerce are confidentiality, integrity, authenticity, and non-repudiation.

2. Understand major difference the public key encryption from symmetric key encryption is that it used two keys - public key and private key. This provides great convenience in key deployment and other security service features.

3. Know how confidentiality, integrity and authenticity services are provided using a public key encryption scheme, such as RSA.

4. Know what digital signature (DS) is and how to create a DS.

5. Add knowledge from 3 and 4 together you will understand how a workable authentication and secure transmission system can be implemented

6. Understand that we need a trusted third party (TTP) to issue digital certificate. This TTP is a certificate authority (CA). CA uses its own private key to send the digital certificate to users for authentication purposes.

7. Know that e-commerce is mainly based on the web, so that we need secure socket layer (SSL) and S-HTTP to secure data transmissions. Also we need security electronic transaction (SET) for payment transactions.

Brief Q/As:

1. Review the definitions of confidentiality, integrity, authenticity, and non- repudiation in the slides.

2. Review the definition of encryption, symmetric key encryption, and public key encryption.

3. How confidentiality is implemented using encryption? Answer: A sender can use the receiver's public key to encrypt the message. Then receiver uses his/her private key to decrypt the message. Since public keys are publicly accessible, there is no problem to do so. The problem is now how the receiver knows the message is really sent by the sent as it is claims. This is an authentication issue.

4. How authentication is implemented using encryption? Answer: A sender can use his/her own private key to encrypt the message. Then the receiver uses the sender's public key to decrypt the message. The problem is that anyone else can release the message contents. Therefore, a combination of the two approaches can be used to create a encryption system that provides both confidentiality and

1 authenticity services. The reversibility of public key encryption plays an important role in these applications.

5. How is a digital signature generated? DS is used to provide authentication service for sending message from one user to another. Two steps are needed: 1) using hash algorithm to generate a digest from the message to be sent, 2) using sender's private key to encrypt the digest. The encrypted digest then becomes the sender's digital signature.

6. What service can a digital signature provide for a secure transmission? 1) Authenticity, and 2) Integrity.

7. What is a workable secure transmission scheme?

The following diagram shows how Alice can send a message to Bob with three security features: 1) confidentiality 2) Integrity and 3) authenticity.

Message 5 Alice 4 Bob

3 1 6 7

Step1: Alice uses the Hash algorithm to extract a fix-sized data block, called digest Step2: Alice uses her own private key to encrypt the digest to generate her digital signature. Step3: Alice encrypts the message and digital signature together using Bob's public key. Step 4: Bob decrypts the encrypted message received from the network using his private key. Step 5: Bod uses the same Hash algorithm to generate a digest from the message he received. Step 6: Bob uses Alice's public key to decrypt the digital signature and obtains the digest created by Alice.

2 Step 7: Bob compares the two digests, one sent by Alice and another generated from the message by him. If they match, the message is original.

So, Step 2 and Step 6 are designed for authentication. Step 3 and 4 are designed for condifentiality. Step 1, 5, and 7 is for integrity purpose.

Key points:

1) Some information is encrypted twice and decrypted twice. This is for digital signature 2) Hash algorithm is used for extracting information to a fix-size data block. Hash algorithm can uniquely convert a file to another one. The converted file could match more than one original files. However, if someone want to recover the oginal from the digest file it is computationally impossible. This means practically it is not possible for find a file that can be converted to the same digest as is generated from another file.

8. Whether the above scheme safe enough? How can we improve it?

Not secure enough. It is because both Alice and Bob need their counterpart's public key. How can Bob tell if a public key claimed being sent by Alice is really sent by Alice? Someone else may pretend to be Alice and send Bob a fake public key. Then all messages Bob receives could be actually sent by the third person and Bob would never know this. In the similar way, Alice may send the message to another person pretending to be Bob. Therefore, we need a Trusted Third Party (TTP) to help them. The TTP here is called certificate authority (CA). CA creates and manages keys for Bob and Alice. When Alice and Bob request the keys, CA generates the keys and sends digital certificates to Bob and Alice respectively. Bob and Alice can search for their counterpart's public key from the CA's web site.

Another issue is CA must guarantee the authenticity of the digital certificate issuance. So, the CA can use its own private key to send digital certificates to Bob and Alice. Bob and Alice and verify the authenticity using the CA's public key that is downloadable form the CA's site.

So far we have linked major concepts in encryption/decryption together. We need to see how the above mechanism can be applied to real e-commerce applications.

9. How is the above mechanism used in e-commerce?

SSL and S-http are based on the above mechanism. SSL runs between http and TCP. S- http replaces regular http protocol. SET is operated on upper level of these two protocols with application-oriented features. (see the figure)

3 SET PGP S/MIME

HTTP or FTP SMTP S-HTTP

SSL or TLS

IP/IPSec