Anyone following the AeroFS thread knows I just wrote a bunch about good and 
bad crypto, with particular emphasis that the quality of crypto is not strongly 
correlated to the code being open or closed source.

Speaking of which, this is something I put some work into recently, that I'm 
proud of and think people should be thinking about more:

https://github.com/rahvee/CBcrypt

What I have written is not fit for general consumption.  It's a proof of 
concept, and demonstration that the principle is sound.  Chances are, it's 
probably actually secure (I think so, and I'm pretty good at this) but it 
hasn't been widely reviewed, and a lot of the decisions are currently 
hard-coded into it (for example, hard-coded to use SHA-256 and ECDH, which 
should be optional.)  It seems the next step needs to be drafting a standard, 
and gaining adoption from projects such as Chrome, Firefox, etc.

Long and short of it:  As we've seen, both because of heartbleed and all the 
other security bugs in crypto libraries, and all the stuff I just wrote about 
in the AeroFS thread, you can't necessarily assume your communications are 
secure, even over a secure SSL/TLS channel.

Never send your password to anyone.  Not even a secure trusted server on a 
secure communication channel.  This logically reduces to only 2 possible 
solutions:  You must either use a clientside random secret manager, which 
requires that you transport it around with you somehow, or you use 
authentication techniques such as asymmetric algorithms, to verify your 
identity without exposing information about your secret.

Instead of sending your secret to the server, use your public knowledge of the 
server, combined with your username and password, AND WORKFACTOR, to 
deterministically generate a public/private keypair which is unique to that 
username, on that server, with that password.  Only send the public component.  
*Usually* your communication channel will actually be secure, but even if it 
does get compromised by something such as heartbleed, then the attacker only 
gains knowledge of your public key, and they can *neither* impersonate you at 
the compromised server, nor anywhere else.
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