Puzzle Palace, by James Bamford, page 433 - 435
With the ending of Project Lightning in 1962, so too ended NSA's support of
unclassified public research.  Lightning had helped prime the scientific
pump, and competition within private industry, it was felt, would ensure
that the flow of technological advances in the computer and associated
fields would continue to pour out.  The Puzzle Palace, through CRD,
SCAMP-ALP, and a select number of key consultants and contractors, could now
focus its full attention, as well as its dollars, on a science where there
was no competition, where NSA alone controlled a monopoly: cryptology.

But along came Lucifer.

(snips - discussing how easy it was to trick remote automatic tellers in the
early days of e-banking)

To counter such possibilities, and realizing that data communications held
enormous market potential, IBM board chairman Thomas Watson, Jr., during the
late 1960s set up a cryptology research group at IBM's research laboratory
in Yorktown Heights, New York.  Led by Horst Feistel, the research group
concluded its work in 1971 with the development of a cipher code-named
Lucifer, which it promptly sold to Lloyd's of London for use in a
cash-dispensing system that IBM had developed.

Spurred by the success of Lucifer, IBM turned to Walter Tuchman, a
thirty-eight-year-old engineer with a doctorate in information theory, then
working at the company's Kingston development lab.  A sixteen-year veteran
of IBM, Tuchman was asked to head up a data security products group that
would transform Lucifer into a highly marketable commodity.

(snips - discussing Carl Meyer's contribution to strengthening the cipher
called Lucifer)

At about the same time that IBM was turning its attention to cryptography,
another group was beginning to study the subject with great interest.  In
1968 the National Bureau of Standards, charged since 1965 with developing
standards for the federal government's purchase and use of computers,
initiated a series of studies to determine the government's need for
computer security.  As a result of the studies, the NBS decided to search
for an encryption method, or algorithm, that could serve as a governmentwide
standard for the storage and transmission of unclassified data.
Solicitation for such an encryption algorithm took place in May 1973 and
August 1974.

The timing could not have been better for IBM, which submitted for
consideration its Lucifer cipher.  Labeled by David Kahn "the tiniest known
'cipher machine' ever produced," Lucifer actually consisted of a
thumbnail-sized silicon "chip" containing an extremely complex integrated
circuit.  The "key" to the cipher was a long string of "bits" - 0's and 1's
- the combination of which would vary from user to user just as the grooves
in front-door key will vary from neighbor to neighbor.

(snips - discussion of cipher codes and how they work including the
S-boxes.)

Just as more grooves on the key usually mean a more difficult lock to pick,
more bits in the cipher key will decrease the chances of successful
cryptanalysis.  For this reason IBM developed Lucifer with a key 128 bits
long. ****But before it submitted the cipher to the NBS, it mysteriously
broke off more than half the key.******** (KK's comments: is there in any
sense as to why IBM would do that?  So, they could control some of the keys
to their cipher?)

>From the very beginning, the NSA had taken an enormous interest in Project
Lucifer.  It had even indirectly lent a had in the development of the S-box
structures.  "IBM was involved with the NSA on an ongoing bases," admitted
Alan Konheim, a senior employee at IBM's Yorktown Heights lab.  "They (NSA
employees) came up every couple of months to find out what IBM was doing."

For the first time in its long history, NSA was facing competition from
within its own country.  The outsiders were no longer mere hobbyists but
highly skilled professionals, supported by unlimited funds and interested
more in perfection than in speed.
 - - - - - - End Quote from Chapter 9, Competition, The Puzzle Palace by
James Bamford- - - - - - -
I can't imagine why IBM called the code "Lucifer."
KK
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