Hide and peek.

• Author: Dembart, Lee

The government doesn't mind if you lock up your secrets--as long as it holds the key.

In recent years, the formerly esoteric world of cryptography has become a subject of potential interest to everyone who uses computers or digital communications. Since hackers have demonstrated that the most secure computers can be breached, people who want to make sure that their electronic information remains confidential are increasingly relying on codes to protect it. Someone who breaks into a computer containing encrypted files will find only electronic gibberish stored in the machine's memory. The simple and incontrovertible fact is that all systems to protect the security of electronic data must use encryption.

If you want to be sure that no one can read your electronic mail except the person you send it to, you should encrypt it. Other new technologies, including cellular phones, cordless phones, and faxes, are also vulnerable to interception. Eavesdroppers can be thwarted by encoding the information before it is transmitted. If Prince Charles and Princess Diana had encrypted their cellular-phone conversations, they would have spared themselves much embarrassment.

The proliferation of data banks, credit bureaus, and computerized record keeping of all kinds has underscored the need to make sure that this information remains secure. Every time you make a credit-card purchase, rent a video, or call someone on the telephone, a record is made of what you did. Someone who can put all of these records together can paint a rough picture of who you are, even before he gets your medical records, income-tax returns, and other, more confidential information. Cryptography is one way of making sure that information about you is used only for the purposes you authorize.

The commercial uses of cryptography are already enormous. The banking industry transmits $350 trillion a year by encrypted wire transfers. Every day, U.S. banks send 350,000 encrypted messages transferring funds around the world. They want to make sure that no one except the intended recipient can read the information or alter it. Indeed, every time you use an automated teller machine, it communicates with its mainframe computer through encryption.

As many political jurisdictions move toward computerized voting, it is essential that votes from individual polling places be sent to the main tabulating center with encryption. Sending them in the clear is an invitation to voting fraud.

Modern codes also have the intriguing ability to provide "digital signatures" that cannot be forged. With a traditional business contract on a piece of paper, both parties sign their names, and the signatures authenticate the agreement. But in the electronic world, if a contract is negotiated and written over a computer network, there is no signature made with a pen and ink on paper. Using contemporary codes, it is possible to prove that the person at the other end of the computer modem is who he says he is and to hold him to any agreement he might make.

Given the multiplicity of current and potential uses for cryptography, it's not surprising that the Clinton administration provoked a storm of protest last spring when it proposed a standard set of computer codes for telephone calls and computer data. The plan envisions two chips, one called Clipper, for encoding digital telephone signals, and another called Capstone, for digital information from computers. The government would hold the keys to all electronic encrytion, and it would split them between two agencies chosen by the attorney general. Law-enforcement officials would need a search warrant to get access to the codes. Eric Hughes, a computer security expert in Berkeley, California, observes: "The government is saying, 'If you want to lock something up, you have to [give us] the key.'"

In essence, this system is like the lock boxes that real-estate agents use on houses to be shown to prospective buyers. The lock box, with the front-door key inside it, hangs on the door. The real-estate agent shows up with a separate key that lets him open the lock box and get out the key that opens the door. In the Clinton administration's plan, the government holds the key to the lock box. No matter what key the user chooses for his "front door," the government can always open the lock box and get to the key. While use of the government encryption standard would not be mandatory, computer and communications companies that want to remain eligible for government contracts would have a strong incentive to adopt it.

The Clipper-chip plan was quickly...