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learned into parties, papers, conferences, and advanced degrees.
--[ 1 - Introduction
It's 1998. I am the fledgling director of the Center for Information
Technology Integration, or CITI, a small research center at the University
of Michigan focused on IT infrastructure. My senior staff and I are sitting
in a small conference room across the table from three gentlemen in suits.
My staff sits in silence throughout the meeting. I introduce my team and
ask the visitors "Are any of you authorized to make arrests?" The head suit
replies, "He is, and I am, but he is not."
I make eye contact with my team. This is what we talked about last night.
The suits are from the Electronic Crimes Branch of the United States Secret
Service, charged with protecting the nation's financial infrastructure.
They heard through the grapevine that we were messing with the currency. So
po-po is in the house and it's Shut The Fuck Up Friday for my staff --
let's not get arrested today -- while I try to calm the waters.
Let's back up, though.
A couple years earlier, a former doctoral student had set CITI up with an
industry research grant to develop smart card-based key management for
their secure video conferencing project. That project taught us a lot about
smart card innards and helped us build some useful tools for smart card
hacking, e.g., card readers and card extenders that let us intercept and
control communications between a smart card and a smart card reader.
But let's back up some more: smart cards?
--[ 2 - Smart cards
Some folks might remember a time before the universal proliferation of
credit cards. I am one of them! My mom carried some "coins" in her wallet
when I was growing up in the '50s, dog tag style metal plates half the size
of today's standard-size card, imprinted with account data tied to an
individual merchant, such as J.L. Hudson's in Detroit or de Bijenkorf in
Amsterdam. These were charge cards, which required the consumer to pay in
full each month.
Around this time, many merchants began accepting charge cards from
companies like American Express and Diner's Club. BankAmericaCard (now
VISA) and Master Charge (now MasterCard) transformed the field with credit
cards, which allowed consumers to carry a balance from month to month, an
instant personal loan that was a huge hit with consumers worldwide.
With scale came great profit but also great opportunity ... for credit card
fraud. Absent a way to validate a card at the time of a transaction,
forgery is trivial. To combat fraud, US card issuers periodically
distributed books containing page after page of lists of fraudulent and
revoked card numbers. I remember these books being printed on the thinnest
paper my young eyes had ever seen. This didn't work well, so US issuers
induced merchants to install dial-up modems and check for card revocation
on each transaction. This is a clumsy system that relies on consumers to
report fraudulent use of their cards but is easy to deploy.
European vendors also sought a way to thwart wholesale card forgery, but in
contrast to the deregulated dial-up market in the US, the European digital
network infrastructure was governed by a collection of stodgy national ITU
entities that stymied online card verification. Smart cards offered an
offline alternative: a trustworthy mobile computing platform. Pin-protected
smart cards were issued to consumers and card readers were issued to
merchants. The card issuers controlled the cards and the readers and they
were able to prevent a lot of fraud.
Chip cards quickly became a killer app for smart card proliferation in
European pockets and purses. Across the Atlantic, though, there was no
swell of smart card adoption. Issuers like VISA and American Express
initiated pilot programs that provided cards and readers to consumers, but
they didn't catch on, in part because consumers already had adequate fraud
protection guarantees from issuers and had no incentive to make
transactions more secure. Eventually, US issuers got on board and issued
smart cards to consumers -- although without PIN protection -- and readers
to merchants. It was oddly late in the game, though.
--[ 3 - Smart card R&D
Meanwhile, researchers in industry and academia were viewing with interest
the potential of the smart card as a mobile trusted computing platform.
Boiling it all down, every digital identity needs a secure place to store
some keys and do a little cryptography. Today we use smartphones for all
that, but 25 years ago, the smart card's peculiar hardware and barren API
offered interesting possibilities.
CITI was fortunate that one of its alumni was well situated at an
industrial research lab, and in 1996 brought CITI in on some collaborative
research. Bellcore cryptographers had cooked up some fast, scalable ciphers
for videoconferencing that wanted a trusted computing base for key
distribution, and it seemed like a smart card might fit the bill. At that
moment, CITI needed more R&D $$$ pretty badly and proposed to take on the
work. Remarkably, CITI succeeded in building the smart card-based key
store. We paid some bills, learned a lot about smart cards, and got some
nice papers out of the collaboration.
By coincidence, just as CITI began investigating smart card capabilities
and developing smart card competencies, the University of Michigan was
deploying a smart card-based ID card -- the MCard -- equipped with an
electronic purse application. The University had a business agreement with
a bank and a vending machine supplier: the bank installed charging stations
all over campus so that students, faculty, and staff could fill their