4WWW95: smart tokens and their implementation

authors:

• michael f. jones, Telequip, Nashua, USA
• bruce schneier, Counterpane Systems, minneapolis, USA

Smart Tokens:

secure transactions are a the basis for electronic commerce on the World Wide Web. various security enhancemens have been proposed, as described in the security tutorial. most of these enhancements involve public key cryptography, which in turn requires an authority issuing a pair of complementary encryption keys. if the private part of the key can be copied or made public, the authenticity of the transaction is no longer guaranteed. in a commercial environment, software-only solutions for protecting the private key are inherently vulnerable to attacks by viruses, password guessing schemes and any other methods of compromise.

a Smart Token, the subject of this paper, is a hardware device with associated software that has the ability to perform private key operations without the private key ever being vulnerable to compromise. it is an easily portable device with the size of - for example - a PCMCIA card. a smart token represents a trusted node on a untrusted network that carries secret data. it must be tamper-resistant, which means it must not be possible to open a smart token without breaking it. in addition, a smart token must be password protected, so even if it gets stolen, it will be difficult to impersonate its owner.

applications of smart tokens:

smart tokens might be used to:

• restricting access to remote computer systems:
  the computer system and the smart token may verify each other and can agree on a session encryption key.

• a physical key for digital signatures:
  the smart token could be used to "digitally sign" a document. it would even be possible to require more than one "signature" in order to sign a contract or any other important document.

• WWW purchases:
  instead of entering a credit card number into a WWW form, it would be possible to insert a smart token into the computer and let it handle the transaction in a much more secure manner.

• software metering:
  a smart token may allow to load all the licensing information of a user so it could control access to various applications and might even meter the usage to compute the license fee based on the time the applications have actually been used (similar to today's pay-TV).

• single copy documents:
  if a document must not be copied, a smart token can act as that document. access to the document is controlled by the card and it might also be signed to authenticate the author.

• electronic subscriptions:
  if a user wishes to purchase a six-month subscription to an electronic news service, she or he might buy a newspaper token. the token identifies the user to the news service and controls access to the information.

• secure storage device:
  finally, if a smart token holds a significant amount of flash RAM, it may store more information than just encryption keys and passwords. it must be possible to use just one single token to access many different services, store many different keys, passwords and any other sensitive data.

WWW implementation: FSTC Electronic Check Project:

the Financial Services Technology Consortium (FSTC) is a collaboration of major banks, technology companies and laboratories that was formed to address the critical need for viable means of conducting electronic commerce on public networks. the Electronic Check Project (ECP) was developed by the FSTC to provide a secure, all electronic payment system modeled after the familiar paper check.

a live demonstration was conducted on september 21, 1995 at the bank of america in san francisco. the demo included the purchase and payment by electronic check over the Internet, using a WWW browser in conjunction with an electronic check application. the check actually cleared electronically through the automated clearing house of the US banking system. a smart token performed the role of an electronic checkbook, generating and signing the first electronic check through the US banking system.

back to 4WWW95 main document.