Security as it is today is an illusion. What? How could I say that, I'm not serious, am I?
Most people today do not understand what security is or is not about. As evidenced by so many works of modern fiction centering around a plot where the terrorists/foreign government/aliens "bug" a server, a cable, or a satellite. Today's technology is supposed to prevent attacks involving any layer in the middle being bugged. Besides not understanding what modern security is capable of, many who are working with it do not understand what it is not capable of.
A quick scan of source code in many projects will turn up code which fails even text book level security principals. I even see some major projects have code commented that it needs a more secure hash or nonce generator or something similar, which again could be found in modern textbooks.
It is shocking the sheer number of online services or applications one can install (forums, webmail, blog, wiki, etc...) that have insecure login. Nearly all of them take user login credentials in plain text, allowing anyone between the user's computer and the website's application to steal the passwords.
It is sad that nearly all sites use a custom login scheme that can be buggy and/or receive login credentials unencrypted, considering that HTTP - the protocol level of communication supports secure logins. HTTP login is rarely used though because it lacks a simple way to log out (why?), and can not be made to look pretty without using AJAX, which is why the vast majority of site creators avoid it.
The HTTP specifications actually describes two methods of login for "HTTP 401", one called "Basic Authentication", and another called "Digest Authentication". The former transmits login credentials in plain text, and the latter using an encryption of sorts. Most sites that avoid the worry of properly creating a custom login scheme and resort to HTTP 401 generally use Basic Authentication. Historically the reason is that most developers of HTTP servers and clients have been too stupid to figure out how to do it properly. Which is surprising considering it is such a simple scheme. IIS and IE didn't have it done properly till relatively recently. Apache historically has had issues with it. Qt's network classes handled it improperly until recently. I'm also told Google Chrome currently has some issues with it.
However, even if one used Digest as the login mechanism on their website, it can easily be subject to a
Man in the middle attack, because the HTTP spec allows for there to be the possibility of sending passwords in an unencrypted fashion.
The following diagram illustrates it:
Since requests for authentication are requested from the server and not the client, the machine in the middle can change the request to be the insecure variant.
So of course the next level up is HTTPS, which does HTTP over SSL/TLS, which is supposed to provide end to end security, preventing man in the middle attacks. This level of security makes all those fiction stories fail in their plot. It also is supposed to keep us safe, and is used by websites for processing credit card information and other sensitive material.
However, most users just type "something.muffin" into their browser, instead of prefixing it with http:// or https://, which will default to http://. Which again means the server has to initiate the secure connection. Since again this is also over a system which has both secure and insecure methods of communication, the same type of man in the middle attack as above can be performed.
The following diagram illustrates it:
Webservers are generally the one that initiates the redirection to an HTTPS page, which can be modified by the server in the middle. Any URL within a page which begins with https:// can be rewritten. For example, https://something.muffin can be changed to http://something.muffin:443 by an attacker in the middle, and then proceed with the attack as described above.
Of course users should be looking for padlocks and green labels and similar in their browser, but how many do so? Since most sites people visit aren't running in secure environments, do you expect them to really notice when some page which is supposed to be secure isn't? Do you expect users to be savvy about security when most developers aren't?
The amount of data which should be transferred securely but isn't is mind boggling. I see websites create a security token over HTTPS, but then pass that token around over HTTP, allowing anyone in the middle to steal it. I see people e-mail each other passwords to accounts on machines they manage all the time. I see database administrators login to phpMyAdmin running on servers with their root passwords sent in plain text. People working on projects together frequently send each other login credentials over forums or IRC in plain text.
Anyone managing a hub somewhere on the vast internet should be able to log tons and tons of passwords. Once a password is gotten to someone's e-mail or forum account, then that can be scanned for even more passwords. Also, I see many users save root/admin passwords in plain text files on web servers, if one managed to get into their account by nabbing their password to it, they quite often will also be able to gain root by a simple scan of the user's files. Even if not, once access is gained to a machine, privilege escalation is usually the norm as opposed to the exception, because server administrators quite often do not keep up with security updates, or are afraid to alter a server that they finally got working.
Careful pondering would show our entire infrastructure for communication is really a house of cards. It wouldn't be that hard for a small team with a bit of capital to setup free proxy servers around the world, offer free wi-fi at a bunch of hotspots, or start a small ISP. So the question we have to ask ourselves, is why are we still standing with everything in the shaky state it's in? I think the answer is simple, the malicious hackers really aren't out there. Sure there's hackers out there, and some of them do wreak a bit of havoc. But it seems no one is really interested in making trouble on a large scale.
Mostly the hackers you hear about are people in a competition, or research, or those "security hackers", which have gone legit and want to help you secure your business. It's funny the amount of times I heard a story about how some bigwig at a company goes to some sort of computer expo, and runs across a table or booth of security "gurus". The bigwig asks how the security gurus can help his business, with the response asking if the bigwig owns a website. Once the bigwig mentions the name of his site, one guru pulls out his laptop and shows the bigwig the site with it defaced in some way. The bigwig panics and immediately hires them to do a whole load of nothing. Little does he realize he was just man-in-the-middle'd.