The new Dutch transit card system, on which $2 billion has been spent, was recently shown by researchers to be insecure. Three attacks have been announced by separate research groups. Let’s look at what went wrong and why.

The system, known as OV-chipkaart, uses contactless smart cards, a technology that allows small digital cards to communicate by radio over short distances (i.e. centimeters or inches) with reader devices. Riders would carry either a disposable paper card or a more permanent plastic card. Riders would “charge up” a card by making a payment, and the card would keep track of the remaining balance. The card would be swiped past the turnstile on entry and exit from the transport system, where a reader device would authenticate the card and cause the card to deduct the proper fare for each ride.

The disposable and plastic cards use different technologies. The disposable card, called Mifare Ultralight, is small, light, and inexpensive. The reusable plastic card, Mifare Classic, uses more sophisticated technologies.

The first attack, published in July 2007, came from Pieter Sieckerman and Maurits van der Schee of the University of Amsterdam, who found vulnerabilities in the Ultralight system. Their main attacks manipulated Ultralight cards, for example by “rewinding” a card to a previous state so it could be re-used. These attacks looked fixable by changing the system’s software, and Sieckerman and van der Schee described the necessary fixes. But it was also evident that a cleverly constructed counterfeit Ultralight card would be able to defeat the system in a manner that would be very difficult to defense.

The fundamental security problem with the disposable Ultralight card is that it doesn’t use cryptography, so the card cannot keep any secrets from an attacker. An attacker who can read a card (e.g., by using standard equipment to emulate a card reader) can know exactly what information is stored on the card, and therefore can make another device that will behave identically to the card. Except, of course, that the attacker’s device can always return itself to the “fully funded” state. Roel Verdult of Raboud University implemented this “cloning” attack and demonstrated it on Dutch television, leading to the recent uproar.

The plastic Mifare Classic card does use cryptography: legitimate cards contain secret keys that they use to authenticate themselves to readers. So attackers cannot straightforwardly clone a card. Mifare Classic was designed to use a secret encryption algorithm.

Karsten Nohl, “Starbug,” and Henryk Plötz announced an attack that involved opening up a Mifare Classic card and capturing a high-resolution image of the circuitry, which they then used to reverse-engineer the cryptographic algorithm. They didn’t publish the algorithm, but their work shows that a real attacker could get the algorithm too.

Unmasking of the algorithm should have been no problem, had the system been engineered well. Kerckhoffs’s Principle, one of the bedrock maxims of cryptography, says that security should never rely on keeping an algorithm secret. It’s okay to have a secret key, if the key is randomly chosen and can be changed when needed, but you should never bank on an algorithm remaining secret.

Unfortunately the designers of Mifare Classic did not follow this principle. Instead, they chose to combine a secret algorithm with a relatively short 48-bit key. This is a problem because once you know the algorithm it’s possible for an attacker to search the entire 48-bit key space, and therefore to forge cards, in a matter or days or weeks. With 48 key bits, there are only about 280 trillion possible keys, which sounds like a lot to the person on the street but isn’t much of a barrier to today’s computers.

Now the Dutch authorities have a mess on their hands. About $2 billion have been invested in this project, but serious fraud seems likely if it is deployed as designed. This kind of disaster would have been less likely had the design process been more open. Secrecy was not only an engineering mistake (violating Kerckhoffs’s Principle) but also a policy mistake, as it allowed the project to get so far along before independent analysts had a chance to critique it. A more open process, like the one the U.S. government used in choosing the Advanced Encryption Standard (AES) would have been safer. Governments seem to have a hard time understanding that openness can make you more secure.