Using crypto against Phishing, Spoofing and Spamming...

[Hal Finney]

There was an early attempt to use cryptography to authenticate online
credit card transactions, the SET protocol pushed by Visa and Mastercard
in the late 1990s.  SET would require PC users to download a "digital
wallet" application which would hold cryptographic credentials that
would be used to authorize a transaction.  The wallet software would
then issue a digital signature when the user approved a purchase.

SET failed due to the complexity of distributing the software and setting
up the credentials.  I think another reason was the go-fast atmosphere of
the late 90s, where no one wanted to slow down the growth of ecommerce.
The path of least resistance was simply to bring across the old way of
authorizing transactions by card number.

Only now are we belatedly beginning to pay the price for that decision.
If anything, it's surprising that it has taken this long.  If phishing
scams had sprung up five years ago it's possible that SET would have
had a fighting chance to survive.

I predict that we will eventually move to a SET-like system; not
necessarily that exact protocol, but something based on cryptographic
authorizations for online purchases rather than the card number based
systems in use today.

In considering such solutions, it is important to distinguish threat
models.  Phishing is so harmful because it succeeds without even breaking
in to users' computers.  A SET-like system can protect against such scams.
Defending against breakin attacks is a harder problem, but that doesn't
mean that solving the easier problem is useless.

Contrary perhaps to the conventional wisdom, I am optimistic that
we will see increases in computer security over the next several years
and that break-ins, although not eliminated, will be greatly reduced.
This model makes it even more important to move towards cryptographic
assurance for payment systems.

Hal Finney

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