I am a newbie in this field. I am confused with why SSL certificates cannot be free of charge. In my understanding the certificate is just a text file consisting of cryptic numbers installed on a server. What do the SSL certificates cost?
SSL certificates provide two things, encryption and authentication. For encryption, any SSL certificate will do. You can use a self-signed certificate which you can make free of charge and it will provide encrypted communication between your server and a client.
The problem is that since it lacks any authentication, an attacker could simply make their own certificate and claim to be the server you want to connect to. Your browser wouldn't know the difference and would connect to the attacker with an encrypted connection and the attacker could then attach to the real server and monitor all your communication.
To avoid this problem, SSL certificates also need to provide authentication and that means that someone has to verify domain ownership and identity information. The policies have to be administered and systems have to be run to handle dealing with lost keys. Relationships also have to be built with browser makers to get the root keys for the certificate authorities in to the applications. This all has costs and so those costs are passed on to those who buy SSL certificates from a Certificate Authority.
In exchange for that cost, the CA verifies the identity of the organization and domain that they are issuing the certificate to. Now back in our original case, the attacker may be able to get between the client and the server, but they can't get the client to connect to their SSL certificate since it isn't trusted and if the client connects with the real SSL certificate, then the encryption kicks in blocking the attacker from being able to monitor what is happening.
if you generate your SSL Certificate by yourself, HTTPS/SSL will work, but a browser will issue a warning encouraging the user to not trust the site, as there is no way to tell if the site you are accessing is really who they say they are. So you need an authentication from a Root CA to avoid this problem. To get this authentication you need to pay.
But now the things are changing. You could read about the Let's Encrypt initiative; its aim is to provide a free CA. It will generate legitimate certs that are trusted by a significant percentage of browsers.
You can certainly generate your own SSL certificate. Charges are not for the generation of them; rather the fee is for someone else to say they trust your certificate.
Presentation of a cert doesn't mean anything, it's the chain of trust associated with it that has meaning. You don't know me, and if I gave you a cert that said I'm Bob Smith of www.google.com, you would either trust me (fool!) or not. If I gave you a similar cert that carried the trust of, say, Verisign, if you trust them then you would extend that trust to me. Verisign isn't going to do that for free since they have administrative requirements before they'll trust me enough to relay that trust to you.
Check out Let's Encrypt https://letsencrypt.org (currently in beta). Let's Encrypt is a non-profit that gives out SSL certs for free, and whose goal is widespread adoption of TLS security and to ease the pain of certificate configuration by allowing automatic config and renewal. I have not used this service yet, but it sounds promising, and is sponsored by several big tech companies (Google, Cisco, Mozilla, Facebook).
They only issue DV (Domain validated) certs, but that's all that is needed for most small sites.
For use by anyone, even corporations: https://community.letsencrypt.org/t/are-they-limitations-on-who-can-use-lets-encrypt/687
“The only limitation is that your use-cases fit in what is being offered: domain-validation certificates, to users who can prove ownership over a domain and a private key, with any number of those domains included in the certificate. So: No wildcard certs, no OV [Organization validated] or EV [Extended validation] certs. That's about it.” “Commercial users are welcome to use Let's Encrypt for commercial and for-profit purposes. This is an intended use; we don't have any desire to restrict the use of our services to non-profit or non-commercial purposes.” “It's worth noting that this is because our primary goal is to protect website users, not necessarily to benefit website operators. If we restricted issuance to non-profit or non-commercial websites, we'd fail to help protect a large number of users who have no control over whether or not websites use TLS, and are typically not well informed about TLS status”
Trusted by browsers: Certs are cross signed by IdenTrust for acceptance until LE gets their own root CA that is trusted by browsers. https://letsencrypt.org/certificates/
“Our intermediate is signed by ISRG Root X1. However, since we are a very new certificate authority, ISRG Root X1 is not yet trusted in most browsers. In order to be broadly trusted right away, our intermediate is also cross-signed by another certificate authority, IdenTrust, whose root is already trusted in all major browsers. Specifically, IdenTrust has cross-signed our intermediate using their DST Root CA X3.”
Let’s Encrypt referenced in official Google Chrome site https://www.chromium.org/Home/chromium-security/marking-http-as-non-secure
There are not many free things in this world.
If you want to use SSL publicly and you want the browser to display a trusted status for a root CA cert then you will need to use a trusted CA to sign your cert. This is where VeriSign, Go Daddy etc come in. IT is quite expensive to maintain a Trusted Root Cert Authority. You need infrastructure, auditing, staff, etc to provide certs then you need to pay browsers vendors to store them in the browser, around $250K for IE for example although that number was a while ago.
If your SSL certs are internally facing then, you can create your own CA, create your own certs using OpenSSL and then push them out to your corporate users. This is much cheaper but not exactly free as you still need infrastructure, staff etc to maintain it.