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There is a need to encrypt data and upload somewhere on a periodic basis. We have a master key that is used to generate data keys. On each instance of upload, a new data key is generated and the data is encrypted using the key and the key is encrypted using the master key.

Is it fine to store the encrypted data and the corresponding key (also encrypted) alongside? This will obviate the need to store the mapping between the upload and the corresponding key used for encryption, again in a data store. But if this is not a good practice, it is better avoided. Any thoughts?

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    You are almost reinventing "Public Keys". Wouldn't it serve the same purpose to encrypt with your public key before upload and your Private key is the equivalent of your Master Key? – user10216038 Jan 22 at 20:30
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There's nothing wrong with this model, so far as your question goes. Lots of systems store an encrypted key alongside the ciphertext (examples include most disk encryption tools and many file or email encryption tools, such as PGP).

Whether it's a good idea to do things this way depends on what you're trying to achieve.

  • If you need to make it possible to rotate the master key without decrypting and re-encrypting everything, this approach makes sense.
  • If you're just trying to ensure that each message is encrypted independently, so that two messages of the same content will have different ciphertexts, that's what Initialization Vectors (IVs) / Nonces are for, and you don't need separate keys at all (the IV/nonce is usually stored, in plain text, next to the ciphertext; it's not a secret at all you just need to not ever reuse it with a given key).
  • If you're trying to store data on behalf of another party (for example, a message you encrypted for the recipient), your scheme still works but you should be encrypting the per-message keys with the recipient's public key, rather than with a shared symmetric key (this is how GPG and S/MIME typically work).

Bear in mind that you'll still need integrity protection on that data. Encryption, by itself, does not prevent tampering with the data, regardless of how well the key is protected. Use a message authentication code of some sort (HMAC, a keyed hash construction, is standard) or use authenticated encryption (Galois/Counter Mode, or GCM, is standard) and store the integrity/authentication data alongside the ciphertext.

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