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comment Why shouldn't we roll our own?
The smartest person I know of who created a bad cryptographic primitive (in this case, a block cipher) is Dan Sleator, who is a highly-regarded theoretical computer scientist from Carnegie Mellon. He made a Feistel cipher out of a bad round function for his ICC chess server (acsac.org/2005/papers/57.pdf)
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revised Looking for example of well-known app using unsalted hashes
deleted 322 characters in body