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As an example, let's say that Alice and Bob generate PGP Keys with GPG and hold a PGP key signing party#

Sat, 13 Sep 2003 15:24:05 +0000

As an example, let's say that Alice and Bob generate PGP Keys with GPG and hold a PGP key signing party. At the party Alice and Bob go verify each others' key information and later sign each others' keys. GPG by default automatically signs the public key of every pair it generates with the associated private key. So, Alice and Bob both now have at least two signatures validating that their keys belong to them. Alice's key was signed by Alice herself and Bob and Bob's key was signed by Bob himself and Alice. In the future Alice and Bob meet Cathy. Cathy generates a key pair and tells Alice and Bob that she will send them her key. Alice doesn't like Cathy and doesn't want Bob to exchange encrypted communications with her. Both Alice and Cathy generate PGP keys which they claim belong to Cathy. They both send them to Bob. Both keys have one signature, the signature of the associated private key. Bob does not know which key is really Cathy's. Cathy hears that Bob got two keys, and suspects Alice. Cathy, now angry, wishes to gain information that she can use against Alice. In order to acquire this information Cathy must compromise the encrypted communications between Alice and Bob. In order to do this, Cathy decides to forge an email to Bob from Alice telling him that Alice has generated new keys. In the forged email, Cathy includes Alice's "new" public key (which is in fact a fake key generated by Cathy). However, Bob knows for sure this is a trick because even though Bob now has two keys for Alice, one of the keys has been signed by multiple people (himself and Alice) verifying that it does indeed belong to Alice, while the other key - Cathy's fake key - only has its own signature.
GnuPG Keysigning Party HOWTO
I quoted this chiefly to put you in the same frame of mind as I was when I read the following paragraph, which starts
The above example is very simplified and things can get a lot more complicated than that.

Ask me again why we don't seem to be seeing pervasive use of crypto yet.