Client Authentication
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As discussed in the pki section, it is quite difficult to solve the trust problem in a PKI system where the client has to trust the server. The centralized Certification Authority scheme is broken, and a distributed system is hard.

However, let's take a step back, and look when do we really want a secure connection? When we have private data on a server, when we want to authenticate us, and send our credentials over the Internet.

Inverted Trust

The case we have here thus is the other way round: The server wants to know our identity, and will present us data only when it trusts us. This is a case where public keys still help us: it is sufficient when one side of a communication verifies the identity of the partner, as a man in the middle attack has to replace both identities to actually intercept the communication (if there is an identity exchange).

So what happens if we use the public key as sign-in to the server? The user presents its public key, which establishes a shared secret that allows to verify that this user is legitimate (i.e. knows his secret key), and at the same time allows to establish a secure connection.

The trust model is again "we know each other" model. This time, we have a much better position than in the "unknown server case": The first time an unknown new user accesses a server is when he creates his account. This is still critical, you don't want to create an account while a man-in-the-middle attack is ongoing (this is a "captive environment" problem; if you never leave that environment, the MitM can go on with that attack forever. A captive environment usually is inside a company). But you can invest some effort into verifying the identity of the server, and the fact that the other side is a human.

Identity Captcha

And, as a captcha is usually part of signing onto a server, you can test the connection with something that is hard for an automatic interception system to emulate. You send a normal captcha (a distorted image, voice, a program that generates the text through some non-trivial logic, etc.), which the automatic interception is not able to process. You encrypt the answer to this captcha on the client side using the shared secret, and sending only the encryption checksum of this answer. The intercepting system can not generate the answer to the captcha itself, and therefore can not generate the correct checksum. The intercepted client does not have the correct shared secret, and therefore can't create the correct checksum even though the user correctly answers the captcha.

This verifies that when creating the account, a secure, non-intercepted connection was present. The server now stores the user's public key as primary user ID. Each time the user logs in, his identity is verified. I don't talk about name and address, what's verified is that the connection was initially not intercepted, and therefore, when presenting the same public key and using the same shared secret, it's now also not intercepted.

This is where a public key still is very useful.

When does this fail?

This approach still fails in an environment, where all connections are intercepted, and the miniluv spends the effort to solve captcha puzzles, or whatever computationally expensive task (but easy enough to solve for humans) is done to reduce that risk.

If identity providers like Google, Yahoo, or Facebook would simply use client certificates to verify the identity of their customers (self-singed client certificates are perfect, what matters is that the certificate does not change), much of the SSL dilemma would already be solved in a practical way. No trust chain with the weakest CA as link anymore.