I am trying to devise a security scheme for encrypting the application level data between a silverlight client, and a php webservice that I created. Since I am dealing with a public website the information I am pulling from the service is public, but the information I'm submitting to the webservice is not public. There is also a back end to the website for administration, so naturally all application data being pushed and pulled from the webservice to the silverlight administration back end must also be encrypted.

Silverlight does not support asymmetric encryption, which would work for the public website. Symmetric encryption would only work on the back end because users do not log in to the public website, so no password based keys could be derived. Still symmetric encryption would be great, but I cannot securely save the private key in the silverlight client. Because it would either have to be hardcoded or read from some kind of config file. None of that is considered secure. So... plan B.

My final alternative would be then to implement the Diffie-Hellman algorithm, which supports symmetric encryption by means of key agreement. However Diffie-Hellman is vulnerable to man-in-the-middle attacks. In other words, there is no guarantee that either side is sure of each others identity, making it possible for communication to be intercepted and altered without the receiving party knowing about it. It is thus recommended to use a private shared key to encrypt the key agreement handshaking, so that the identity of either party is confirmed.

This brings me back to my initial problem that resulted in me needing to use Diffie-Hellman, how can I use a private key in a silverlight client without hardcoding it either in the code or an xml file.

I'm all out of love on this one... is there any answer to this?