Modern Forms of Deniable Encryption
Modern deniable encryption techniques exploit the pseudorandom permutation properties of existing block ciphers, making it cryptographically infeasible to prove that the ciphertext is not random data generated by a cryptographically secure pseudorandom number generator. This is used in combination with some decoy data that the user would plausibly want to keep confidential that will be revealed to the attacker, claiming that this is all there is. This form of deniable encryption is sometimes referred to as steganography. The user can supply any incorrect key for the truly secret data, which will result in apparently random data, indistinguishable from not having stored any particular data there.
One example of deniable encryption is a cryptographic filesystem that employs a concept of abstract "layers", where each layer would be decrypted with a different encryption key. Additionally, special "chaff layers" are filled with random data in order to have plausible deniability of the existence of real layers and their encryption keys. The user will store decoy files on one or more layers while denying the existence of others, claiming that the rest of space is taken up by chaff layers. Physically, these types of filesystems are typically stored in a single directory consisting of equal-length files with filenames that are either randomized (in case they belong to chaff layers), or cryptographic hashes of strings identifying the blocks. The timestamps of these files are always randomized. Examples of this approach include Rubberhose filesystem and PhoneBookFS.
Another approach utilized by some conventional disk encryption software suites is creating a second encrypted volume within a container volume. The container volume is first formatted by filling it with encrypted random data, and then initializing a filesystem on it. The user then fills some of the filesystem with legitimate, but plausible-looking decoy files that the user would seem to have an incentive to hide. Next, a new encrypted volume (the hidden volume) is allocated within the free space of the container filesystem which will be used for data the user actually wants to hide. Since an adversary cannot differentiate between encrypted data and the random data used to initialize the outer volume, this inner volume is now undetectable. Concerns have, however, been raised for the level of plausible deniability in hiding information this way – the contents of the "outer" container filesystem (in particular the access or modification timestamps on the data stored) could raise suspicions as a result of being frozen in its initial state to prevent the user from corrupting the hidden volume. This problem can be eliminated by instructing the system not to protect the hidden volume, although this could result in lost data. FreeOTFE and BestCrypt can have many hidden volumes in a container; TrueCrypt is limited to one hidden volume.
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