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In the earlier prototype of net2o, I used my own symmetric cryptography system, which I called "Wurstkessel". I designed Wurstkessel, because I'm not convinced with the standard symmetric cryptography tools, especially not with AES and SHA-1. I was also not happy with the SHA-3 contest, as most entries used a slightly modified Merkle–Damgård construction, though MD has known problems.

The tools in question should be able to perform the following tasks:

Wurstkessel uses one algorithm to provide all these functions, especially it allows to collapse the en/decrypt function and the hash computation into one step.

The base of all this is a secure random number generator that allows to add entropy. This defines how the encryption and decryption must work: as stream cipher. Stream ciphers xor random numbers with the plain text, the random number generator starts with the shared secret (the key) and a good deal of salt (a random number at the start of the encrypted data) as internal state.

This salt is very crucial for the secure operation of a traditional stream cipher, as its random number generator is purely deterministic, and therefore, a key could only be used once. The combination of key and salt must be unique, i.e. the salt must have the form of a nonce.

Wurstkessel is more relaxed here. Its rounds operation is

ϕ(a,s,e) ⇒ a',s',e'

where ϕ is the transformation function, and

By using the message as entropy source, the random number generator is no longer determined by its initial state, thus different messages also influence the cipher. The block size of one primitive operation however is 64 bytes, and within these 64 bytes, the property of a normal stream cipher still holds, so please use each key+salt pair only once.

The individual rounds mix state and accumulator byte-wise with different strides to walk through state and accumulator, and by xoring these values creating the index into a 256 entry table of 64 bit numbers obtained once from a random number source. 8 differently rotated numbers are combined together to form one 64 bit portion of the next state. The table index does not actually reveal internal state, as it is the xor of two bytes, and each combination of state and accumulator byte is used only once - thus any knowledge of the index is useless for the next round. There should be at least two rounds for encryption to spread all information over the entire 512 bits, and to make sure that no two consecutive states are exposed to a known plaintext attack (the accumulator is never exposed).

The final state is the hash of the message. The hash is unique (with a collision probability of 2-256) not only for the message itself, but also for key and salt, thus appending this hash to the message gives us integrity.

Wurstkessel has to be taken with a grain of salt, as it still lacks peer review and analysis. Its random number quality has been verified with the dieharder test suite.

Note: The SHA-3 winner, Keccak, uses a similar combination of external and internal state, and mixing in the message; they call this "sponge"; other people call similar approaches "wide-pipe". Thanks to their lengthy cryptanalysis, it can now be said that the sponge/wide-pipe part of Wurstkessel has received sufficient peer review and analysis, and is a sound concept.

The remaining unreviewed part is the S-box, the ϕ function in Wurstkessel. Fortunately, this is a very traditional S-box, which is only modified in so far that using xor of two byte of the state as index into the random number table doesn't reveal the actual internal state in a side-channel attack.

I would rather criticize Keccak's permutation function f, because it is reversible. Wurstkessel deliberately chose a not fully reversible one-way function. The reversibility of Keccak's f should not be a problem to an attacker for encryption and decryption, because it is secret, but I can imagine it becoming a potential attack vector with hashes. And that's what the competition was about: hashes.