Com-Central.net

Skype, the Internet calling service recently acquired by eBay Inc., provides free voice calls and instant messaging between users. Unlike other Internet voice services, Skype calls are encrypted - encoded using complex mathematical operations. That apparently makes them impossible to snoop on, though the company leaves the issue somewhat open to question.
Skype is certainly not the first application for encrypted communications on the Internet. Secure e-mail and instant messaging programs have been available for years at little or no cost.


But to a large extent, Internet users haven't felt a need for privacy that outweighed the extra effort needed to use encryption. In particular, e-mail programs such as Pretty Good Privacy have been considered too cumbersome by many.


And because such applications have had limited popularity, their mere use can draw attention. With Skype, however, criminals, terrorists and other people who really want to keep their communications private are indistinguishable from those who just want to call their mothers.


"Skype became popular not because it was secure, but because it was easy to use," said Bruce Schneier, chief technology officer at Counterpane Internet Security Inc.


Luxembourg-based Skype was founded by the Swedish and Estonian entrepreneurs who created the Kazaa file-sharing network, which has been the subject of several court actions by the music industry.


Skype's software for personal computers is distributed for free. Members pay nothing to talk to each other over PCs but pay fees to connect to people who are using telephones. Skype software is also being built into cell-phone-like portable devices that will work within range of wireless Internet "hot spots."


While still somewhat marginal in the United States, Skype had 75 million registered users worldwide at the end of 2005. Typically, 3 million to 4 million users are online at the same time.


Skype calls whip around the Internet encrypted with "keys," which essentially are very long numbers. Skype keys are 256 bits long - twice as long as the 128-bit keys used to send credit card numbers over the Internet. The security is much more than doubled - in theory, Skype's 256-bit keys would take trillions of times longer to crack than 128-bit keys, which are themselves regarded as practically impossible to break by current means.

More...

news.zdnet.com/Skype%2...&subj=zdnn

"Secure", my shiny a**.
lol