Shareware Overload Trio 2/Shareware Overload Trio Volume 2 (Chestnut CD-ROM).ISO/dir33/privacys.zip/ENC.TXT

Text File | 1994-10-26 | 14KB | 241 lines

                     The Advantages of Data Encryption


               Imagine a world where complete privacy exists.
          Your business affairs are your personal matter.  The
          government isn't looking over your shoulder all the
          time.
               Such a world does exist.  The only question is
          whether the government will succeed in getting its
          electronic tentacles into it.
               This private world exists thanks to technological
          advances in data encryption, the electronic coding of
          data.  Encryption is an electronic procedure that
          digitally encodes (converts into unintelligible
          gibberish) and decodes (converts back to readable
          language).
               Today any reasonably powerful desktop computer can
          encrypt and decrypt messages which the most powerful
          supercomputers in the world, working together, could
          not decrypt.  Programs to do this are very inexpensive,
          and already available to anyone.
               Most encryption programs take advantage of a
          mathematically sophisticated encryption technology that
          requires two different keys, both of which are
          necessary to decrypt the message.  The sender needs
          only one to send a message.  The receiver decodes the
          message with the second key -- which never needs to
          leave his computer, where it can be protected by
          passwords.  Although the mathematics are daunting, the
          program makes the process simple and straightforward.
               Examples of everyday uses are a writer who sends
          chapters of his new book to his publisher;
          collaborators on an invention working at a distance and
          needing to keep others from claim-jumping a discovery;
          paying bills or ordering from mail-order catalogs by
          sending encrypted credit card numbers over the
          telephone; an accountant who scrambles backup tapes so
          that clients needn't worry about lost confidentiality
          if the tapes are lost or stolen; and attorneys
          communicating with clients and other attorneys via
          encrypted documents.
               At the same time, the costs of international
          communications and transportation have declined to the
          point where even the average individual can afford to
          internationalize.  And countries around the world are
          competing for that business.  You can take advantage of
          what these countries have to offer to safeguard your
          freedom and privacy using exactly the same techniques
          as giant multinational companies.
               Encrypted messages can move across international
          borders without interference, by telephone, by radio,
          or by courier.  A "message" means anything that can be
          digitized -- a sequence of words, music, a digitized
          picture, a forbidden magazine or book, etc.  Here's
          just one way to hide a message in plain sight:
               Music is now available on digital audio tape (DAT)
          in a cassette just a little fatter than an ordinary
          audio cassette.  One DAT cassette can completely cloak
          about 600 books (80 megabytes) of information
          interleaved with the music, securely encrypted on the
          digital tape in such a way that this library's
          existence on the tape would be invisible even to
          powerful computers.  These 600 books of information
          could be made to disappear into an ordinary digital
          tape of Beethoven.
               DAT records music in 16 bit bytes, but that
          precision is beyond the perception.  The 16th bit of
          the signal is too small to be detected by the human
          ear.  A long message can be substituted, in encrypted
          form, in the positions of all the 16th bits of music.
          Anyone playing the tape would hear Beethoven in the
          exact digital quality they would hear on a purchased
          Beethoven tape.
               Anyone examining the tape with a computer would
          see only digital music.  Only by matching an untampered
          tape bit by bit on a computer could someone detect the
          difference.  Even then, the random-looking differences
          would appear to be noise acquired while duplicating a
          digital tape through an analog CD player, as is
          normally done.  This "noise" would have to be decrypted
          (not likely) to prove that it was something other than
          noise.
               This means that it's already totally hopeless to
          stop the flow of bits across borders.  Because anyone
          carrying a single music cassette bought in a store
          could be carrying the entire computerized files of the
          Stealth Bomber, and it would be completely and totally
          imperceptible.  And as more of our information systems
          become digital (replacing analog), when we have
          satellites beaming digital television signals, and
          digitized faxes being sent over fiber-optic cables, we
          will probably be able to interleave and conceal real
          messages in perfectly innocent looking faxes and other
          communications in the same way.
               Another benefit of encryption technology is that
          it provides verification of identity, while staying
          anonymous.  You may correspond in complete privacy with
          a "name" and never know who it is, but you can verify
          that it is the same party that you have dealt with
          before, and none other.
               Privacy of electronic communications leads to an
          ability to do business from anywhere in the world, with
          anybody in the world.
               In an information economy, transfer of product can
          occur in privacy through barter.  Anonymous vendor "A"
          can negotiate by electronic mail with anonymous buyer
          "B" to trade information (a research report or a
          computer program, for example) for other information of
          value.  Neither party reports the transaction for tax
          purposes, and neither can identify the other.
          Depending upon the citizenship and residence of the
          parties, such tax avoidance may be a criminal offense.
          But it will occur, contributing to the government's
          inability to collect taxes.
               The illegal uses of data encryption are likely to
          be insignificant by comparison to the legal uses.
          Secure transfer of work product from an offshore
          consultant or computer programmer will increase the
          ability to work from anywhere, without fear of one's
          output being intercepted and copied by data pirates.
               It is technically feasible to use these techniques
          to create a totally secret banking system, with account
          owners identities being unknown even to the bank.
          Credits could be transferred between accounts from
          anywhere in the world through encrypted communications.
          In a world where governments are increasingly
          subscribing to treaties limiting banking secrecy, and
          requiring identification of depositors, it is unlikely
          that this technical possibility will actually occur in
          the near future.  But unlikely is not impossible -- and
          the time may come when some government permits such a
          service, or when entrepreneurs sneak it in the back
          door by calling it a barter exchange instead of a bank.
          Since everything is electronic, such a service could
          even be operated from a ship, an orbiting space
          station, or The Moon.  It is only thirty years since
          the first Moon landing -- who knows what the next
          thirty years might bring.  The data haven may
          eventually supplement the tax haven.
               Meanwhile, data encryption is available to anybody
          for whatever use they wish to make of it.  A package
          offering basic information on encryption, including
          copies of several different computer programs for IBM-
          compatible computers, is called The Privacy Disk and is
          available for $49.95 from Noble Software, 51 MacDougal
          Street, Suite 192, New York, New York 10012.  (A 3.5"
          diskette will be sent unless you specify a 5.25"
          diskette.)  With the Clinton administration making
          proposals to outlaw the sale of encryption programs,
          this is something you might want to buy now and put
          away even if you have no immediate use for it.
               Like the old saw about not being able to see the
          forest for the trees, it's easy for those who work with
          computers every day to forget how profoundly the
          technology has changed the world we live in.  Every day
          more than $1.9 trillion changes hands electronically in
          the financial markets.
               There are two major developments in recent
          economic history.  The first was President Nixon's
          decision in 1971 to give up the gold standard for the
          U.S. dollar.  The second was the rise of the market for
          financial derivatives, conceptual deals that are based
          on future events, such as fluctuations in the interest
          rate.
               When these events combined with the maturity of
          the electronic banking network, it meant money lost any
          real value.  Money was no longer connected to anything
          tangible, such as gold, and existed solely as volatile
          electronic impulses.
               Derivatives embody this concept.  Though worth
          billions on paper, they represent neither real products
          nor the value of these products.  Even commodities
          futures, which would seem tied to the real world of
          corn and pork bellies, are more wager than investment.
               These trends, combined with the creation of the
          post-War global economy, have cut adrift the financial
          markets to trade in abstract concepts over electronic
          networks, with the result being ongoing volatility.
               We are talking as much about the death of money as
          the death of the income tax.
               That death of money brings us back to the idea of
          the electronic exchange, and anonymous encrypted
          transactions.  A stock or commodities exchange
          functions without the need for cash going in or out of
          the marketplace, so an offshore exchange dealing in
          stocks, commodities, financial derivatives, or other
          replacements for money begins to become possible.  The
          anonymous part may be difficult to achieve in the
          current political and legal climate, but the anonymity
          of transactions becomes less relevant if the
          transactions are being done by traders, financial
          institutions, and brokers who are based in tax havens
          and don't have to stay anonymous because they don't
          have to pay taxes anyway.
               At an even simpler level, data encryption already
          makes possible a more flexible and portable economy.
          Salesmen on the road now frequently work with laptop
          (or even palmtop) computers that they use to prepare
          and transmit orders.  Some still stop at the nearest
          telephone to plug in the computer, but more and more of
          them are using computers with built-in cellular
          telephone or other wireless connections, allowing them
          to have instantaneous transmission to and from their
          headquarters.  Most frequently these orders are
          processed directly into the company's computer system,
          and processed for shipment without any human
          intervention.  Encryption becomes necessary to protect
          the integrity of the information -- one wouldn't want a
          competitor following a salesman around picking up
          copies of the orders on his car radio, or stealing the
          laptop out of the car during lunch and being able to
          read all the records.
               The criminal element seems to have grasped this
          technology more quickly than the legitimate business
          world -- on the street corners of any big city one can
          find drug dealers equipped with pagers, pocket
          telephones and computers.  They started with pagers,
          then realized they could get free of telephone wires
          completely by using pocket telephones so that their
          exact locations could not be determined.  Now many of
          them have graduated to computers with wireless
          transmission to forward the orders.  The dealer takes
          the customer's order and the cash, and relays it to an
          associate who then delivers the drugs after checking
          the surrounding area.  The dealer is never holding the
          actual drugs.
               From these illegal beginnings, legitimate business
          also becomes more portable.  But as the need for a
          fixed location diminishes, so does the ability of the
          tax collector to assess income tax.  The business
          becomes so invisible that there is nothing to grasp.
               One of the best sources of research reports on
          privacy matters of all types is Eden Press, Box 8410,
          Fountain Valley, California 92728, who will send a free
          catalog on request.