-fixing #2434, plus some code cleanup
[oweals/gnunet.git] / src / core / gnunet-service-core_kx.c
index ac5b08d791d595371384ddd79481f86976f729ef..31f5bb494f36111c3f34636b0ebde2fc234bdaf2 100644 (file)
@@ -1,3 +1,80 @@
+/*
+     This file is part of GNUnet.
+     (C) 2009, 2010, 2011, 2012 Christian Grothoff (and other contributing authors)
+
+     GNUnet is free software; you can redistribute it and/or modify
+     it under the terms of the GNU General Public License as published
+     by the Free Software Foundation; either version 3, or (at your
+     option) any later version.
+
+     GNUnet is distributed in the hope that it will be useful, but
+     WITHOUT ANY WARRANTY; without even the implied warranty of
+     MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the GNU
+     General Public License for more details.
+
+     You should have received a copy of the GNU General Public License
+     along with GNUnet; see the file COPYING.  If not, write to the
+     Free Software Foundation, Inc., 59 Temple Place - Suite 330,
+     Boston, MA 02111-1307, USA.
+*/
+
+/**
+ * @file core/gnunet-service-core_kx.c
+ * @brief code for managing the key exchange (SET_KEY, PING, PONG) with other peers
+ * @author Christian Grothoff
+ */
+#include "platform.h"
+#include "gnunet-service-core_kx.h"
+#include "gnunet-service-core.h"
+#include "gnunet-service-core_clients.h"
+#include "gnunet-service-core_neighbours.h"
+#include "gnunet-service-core_sessions.h"
+#include "gnunet_statistics_service.h"
+#include "gnunet_peerinfo_service.h"
+#include "gnunet_hello_lib.h"
+#include "gnunet_constants.h"
+#include "gnunet_signatures.h"
+#include "gnunet_protocols.h"
+#include "core.h"
+
+
+/**
+ * Set to GNUNET_YES to perform some slightly expensive internal invariant checks.
+ */
+#define EXTRA_CHECKS GNUNET_YES
+
+/**
+ * How long do we wait for SET_KEY confirmation initially?
+ */
+#define INITIAL_SET_KEY_RETRY_FREQUENCY GNUNET_TIME_relative_multiply (MAX_SET_KEY_DELAY, 1)
+
+/**
+ * What is the minimum frequency for a PING message?
+ */
+#define MIN_PING_FREQUENCY GNUNET_TIME_relative_multiply (GNUNET_TIME_UNIT_SECONDS, 5)
+
+/**
+ * How often do we rekey?
+ */
+#define REKEY_FREQUENCY GNUNET_TIME_relative_multiply (GNUNET_TIME_UNIT_MINUTES, 90)
+
+
+/**
+ * What is the maximum age of a message for us to consider processing
+ * it?  Note that this looks at the timestamp used by the other peer,
+ * so clock skew between machines does come into play here.  So this
+ * should be picked high enough so that a little bit of clock skew
+ * does not prevent peers from connecting to us.
+ */
+#define MAX_MESSAGE_AGE GNUNET_TIME_UNIT_DAYS
+
+/**
+ * What is the maximum delay for a SET_KEY message?
+ */
+#define MAX_SET_KEY_DELAY GNUNET_TIME_relative_multiply (GNUNET_TIME_UNIT_SECONDS, 10)
+
+
+GNUNET_NETWORK_STRUCT_BEGIN
 
 /**
  * We're sending an (encrypted) PING to the other peer to check if he
@@ -29,10 +106,8 @@ struct PingMessage
 };
 
 
-
 /**
- * Response to a PING.  Includes data from the original PING
- * plus initial bandwidth quota information.
+ * Response to a PING.  Includes data from the original PING.
  */
 struct PongMessage
 {
@@ -53,10 +128,9 @@ struct PongMessage
   uint32_t challenge GNUNET_PACKED;
 
   /**
-   * Desired bandwidth (how much we should send to this
-   * peer / how much is the sender willing to receive).
+   * Reserved, always 'GNUNET_BANDWIDTH_VALUE_MAX'.
    */
-  struct GNUNET_BANDWIDTH_Value32NBO inbound_bw_limit;
+  struct GNUNET_BANDWIDTH_Value32NBO reserved;
 
   /**
    * Intended target of the PING, used primarily to check
@@ -111,317 +185,665 @@ struct SetKeyMessage
 };
 
 
+/**
+ * Encapsulation for encrypted messages exchanged between
+ * peers.  Followed by the actual encrypted data.
+ */
+struct EncryptedMessage
+{
+  /**
+   * Message type is either CORE_ENCRYPTED_MESSAGE.
+   */
+  struct GNUNET_MessageHeader header;
+
+  /**
+   * Random value used for IV generation.
+   */
+  uint32_t iv_seed GNUNET_PACKED;
+
+  /**
+   * MAC of the encrypted message (starting at 'sequence_number'),
+   * used to verify message integrity. Everything after this value
+   * (excluding this value itself) will be encrypted and authenticated.
+   * ENCRYPTED_HEADER_SIZE must be set to the offset of the *next* field.
+   */
+  struct GNUNET_HashCode hmac;
+
+  /**
+   * Sequence number, in network byte order.  This field
+   * must be the first encrypted/decrypted field
+   */
+  uint32_t sequence_number GNUNET_PACKED;
+
+  /**
+   * Reserved, always 'GNUNET_BANDWIDTH_VALUE_MAX'.
+   */
+  struct GNUNET_BANDWIDTH_Value32NBO reserved;
+
+  /**
+   * Timestamp.  Used to prevent reply of ancient messages
+   * (recent messages are caught with the sequence number).
+   */
+  struct GNUNET_TIME_AbsoluteNBO timestamp;
+
+};
+GNUNET_NETWORK_STRUCT_END
+
+
+/**
+ * Number of bytes (at the beginning) of "struct EncryptedMessage"
+ * that are NOT encrypted.
+ */
+#define ENCRYPTED_HEADER_SIZE (offsetof(struct EncryptedMessage, sequence_number))
+
+
+/**
+ * State machine for our P2P encryption handshake.  Everyone starts in
+ * "DOWN", if we receive the other peer's key (other peer initiated)
+ * we start in state RECEIVED (since we will immediately send our
+ * own); otherwise we start in SENT.  If we get back a PONG from
+ * within either state, we move up to CONFIRMED (the PONG will always
+ * be sent back encrypted with the key we sent to the other peer).
+ */
+enum KxStateMachine
+{
+  /**
+   * No handshake yet.
+   */
+  KX_STATE_DOWN,
+
+  /**
+   * We've sent our session key.
+   */
+  KX_STATE_KEY_SENT,
+
+  /**
+   * We've received the other peers session key.
+   */
+  KX_STATE_KEY_RECEIVED,
+
+  /**
+   * The other peer has confirmed our session key with a message
+   * encrypted with his session key (which we got).  Key exchange
+   * is done.
+   */
+  KX_STATE_UP,
+
+  /**
+   * We're rekeying, so we have received the other peer's session
+   * key, but he didn't get ours yet.
+   */
+  KX_STATE_REKEY,
+
+  /**
+   * We're rekeying but have not yet received confirmation for our new
+   * key from the other peer.
+   */
+  KX_STATE_REKEY_SENT
+};
+
+
+/**
+ * Information about the status of a key exchange with another peer.
+ */
+struct GSC_KeyExchangeInfo
+{
+  /**
+   * Identity of the peer.
+   */
+  struct GNUNET_PeerIdentity peer;
+
+  /**
+   * SetKeyMessage to transmit (initialized the first
+   * time our status goes past 'KX_STATE_KEY_SENT').
+   */
+  struct SetKeyMessage skm;
+
+  /**
+   * PING message we transmit to the other peer.
+   */
+  struct PingMessage ping;
+
+  /**
+   * SetKeyMessage we received and did not process yet.
+   */
+  struct SetKeyMessage *skm_received;
+
+  /**
+   * PING message we received from the other peer and
+   * did not process yet (or NULL).
+   */
+  struct PingMessage *ping_received;
+
+  /**
+   * PONG message we received from the other peer and
+   * did not process yet (or NULL).
+   */
+  struct PongMessage *pong_received;
+
+  /**
+   * Encrypted message we received from the other peer and
+   * did not process yet (or NULL).
+   */
+  struct EncryptedMessage *emsg_received;
+
+  /**
+   * Non-NULL if we are currently looking up HELLOs for this peer.
+   * for this peer.
+   */
+  struct GNUNET_PEERINFO_IteratorContext *pitr;
+
+  /**
+   * Public key of the neighbour, NULL if we don't have it yet.
+   */
+  struct GNUNET_CRYPTO_RsaPublicKeyBinaryEncoded *public_key;
+
+  /**
+   * We received a PONG message before we got the "public_key"
+   * (or the SET_KEY).  We keep it here until we have a key
+   * to decrypt it.  NULL if no PONG is pending.
+   */
+  struct PongMessage *pending_pong;
+
+  /**
+   * Key we use to encrypt our messages for the other peer
+   * (initialized by us when we do the handshake).
+   */
+  struct GNUNET_CRYPTO_AesSessionKey encrypt_key;
+
+  /**
+   * Key we use to decrypt messages from the other peer
+   * (given to us by the other peer during the handshake).
+   */
+  struct GNUNET_CRYPTO_AesSessionKey decrypt_key;
+
+  /**
+   * At what time did we generate our encryption key?
+   */
+  struct GNUNET_TIME_Absolute encrypt_key_created;
+
+  /**
+   * At what time did the other peer generate the decryption key?
+   */
+  struct GNUNET_TIME_Absolute decrypt_key_created;
+
+  /**
+   * When should the session time out (if there are no PONGs)?
+   */
+  struct GNUNET_TIME_Absolute timeout;
+
+  /**
+   * At what frequency are we currently re-trying SET_KEY messages?
+   */
+  struct GNUNET_TIME_Relative set_key_retry_frequency;
+
+  /**
+   * ID of task used for re-trying SET_KEY and PING message.
+   */
+  GNUNET_SCHEDULER_TaskIdentifier retry_set_key_task;
+
+  /**
+   * ID of task used for sending keep-alive pings.
+   */
+  GNUNET_SCHEDULER_TaskIdentifier keep_alive_task;
+
+  /**
+   * Bit map indicating which of the 32 sequence numbers before the last
+   * were received (good for accepting out-of-order packets and
+   * estimating reliability of the connection)
+   */
+  unsigned int last_packets_bitmap;
+
+  /**
+   * last sequence number received on this connection (highest)
+   */
+  uint32_t last_sequence_number_received;
+
+  /**
+   * last sequence number transmitted
+   */
+  uint32_t last_sequence_number_sent;
+
+  /**
+   * What was our PING challenge number (for this peer)?
+   */
+  uint32_t ping_challenge;
+
+  /**
+   * What is our connection status?
+   */
+  enum KxStateMachine status;
+
+};
+
+
 /**
  * Handle to peerinfo service.
  */
 static struct GNUNET_PEERINFO_Handle *peerinfo;
 
+/**
+ * Our private key.
+ */
+static struct GNUNET_CRYPTO_RsaPrivateKey *my_private_key;
 
+/**
+ * Our public key.
+ */
+static struct GNUNET_CRYPTO_RsaPublicKeyBinaryEncoded my_public_key;
 
 /**
- * We received a PING message.  Validate and transmit
- * PONG.
- *
- * @param n sender of the PING
- * @param m the encrypted PING message itself
- * @param ats performance data
- * @param ats_count number of entries in ats (excluding 0-termination)
+ * Our message stream tokenizer (for encrypted payload).
  */
+static struct GNUNET_SERVER_MessageStreamTokenizer *mst;
+
+
+#if EXTRA_CHECKS
+/**
+ * Check internal invariants of the given KX record.
+ *
+ * @param kx record to check
+ * @param file filename for error reporting
+ * @param line line number for error reporting
+ */ 
 static void
-handle_ping (struct Neighbour *n, const struct PingMessage *m,
-             const struct GNUNET_TRANSPORT_ATS_Information *ats,
-             uint32_t ats_count)
+check_kx_record (struct GSC_KeyExchangeInfo *kx,
+                const char *file,
+                int line)
 {
-  struct PingMessage t;
-  struct PongMessage tx;
-  struct PongMessage *tp;
-  struct MessageEntry *me;
-  struct GNUNET_CRYPTO_AesInitializationVector iv;
+  struct GNUNET_HashCode hc;
 
-#if DEBUG_CORE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Core service receives `%s' request from `%4s'.\n", "PING",
-              GNUNET_i2s (&n->peer));
-#endif
-  derive_iv (&iv, &n->decrypt_key, m->iv_seed, &my_identity);
-  if (GNUNET_OK !=
-      do_decrypt (n, &iv, &m->target, &t.target,
-                  sizeof (struct PingMessage) - ((void *) &m->target -
-                                                 (void *) m)))
+  if (NULL == kx->public_key)
     return;
-#if DEBUG_HANDSHAKE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Decrypted `%s' to `%4s' with challenge %u decrypted using key %u, IV %u (salt %u)\n",
-              "PING", GNUNET_i2s (&t.target), (unsigned int) t.challenge,
-              (unsigned int) n->decrypt_key.crc32, GNUNET_CRYPTO_crc32_n (&iv,
-                                                                          sizeof
-                                                                          (iv)),
-              m->iv_seed);
-#endif
-  GNUNET_STATISTICS_update (stats, gettext_noop ("# PING messages decrypted"),
-                            1, GNUNET_NO);
-  if (0 !=
-      memcmp (&t.target, &my_identity, sizeof (struct GNUNET_PeerIdentity)))
-  {
-    char sender[9];
-    char peer[9];
+  GNUNET_CRYPTO_hash (kx->public_key, sizeof (*kx->public_key), &hc);
+  GNUNET_assert_at (0 == memcmp (&hc, &kx->peer, sizeof (struct GNUNET_HashCode)), file, line);
+}
 
-    GNUNET_snprintf (sender, sizeof (sender), "%8s", GNUNET_i2s (&n->peer));
-    GNUNET_snprintf (peer, sizeof (peer), "%8s", GNUNET_i2s (&t.target));
-    GNUNET_log (GNUNET_ERROR_TYPE_ERROR,
-                _
-                ("Received PING from `%s' for different identity: I am `%s', PONG identity: `%s'\n"),
-                sender, GNUNET_i2s (&my_identity), peer);
-    GNUNET_break_op (0);
-    return;
-  }
-  update_neighbour_performance (n, ats, ats_count);
-  me = GNUNET_malloc (sizeof (struct MessageEntry) +
-                      sizeof (struct PongMessage));
-  GNUNET_CONTAINER_DLL_insert_after (n->encrypted_head, n->encrypted_tail,
-                                     n->encrypted_tail, me);
-  me->deadline = GNUNET_TIME_relative_to_absolute (MAX_PONG_DELAY);
-  me->priority = PONG_PRIORITY;
-  me->size = sizeof (struct PongMessage);
-  tx.inbound_bw_limit = n->bw_in;
-  tx.challenge = t.challenge;
-  tx.target = t.target;
-  tp = (struct PongMessage *) &me[1];
-  tp->header.type = htons (GNUNET_MESSAGE_TYPE_CORE_PONG);
-  tp->header.size = htons (sizeof (struct PongMessage));
-  tp->iv_seed =
-      GNUNET_CRYPTO_random_u32 (GNUNET_CRYPTO_QUALITY_NONCE, UINT32_MAX);
-  derive_pong_iv (&iv, &n->encrypt_key, tp->iv_seed, t.challenge, &n->peer);
-  do_encrypt (n, &iv, &tx.challenge, &tp->challenge,
-              sizeof (struct PongMessage) - ((void *) &tp->challenge -
-                                             (void *) tp));
-  GNUNET_STATISTICS_update (stats, gettext_noop ("# PONG messages created"), 1,
-                            GNUNET_NO);
-#if DEBUG_HANDSHAKE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Encrypting `%s' with challenge %u using key %u, IV %u (salt %u)\n",
-              "PONG", (unsigned int) t.challenge,
-              (unsigned int) n->encrypt_key.crc32, GNUNET_CRYPTO_crc32_n (&iv,
-                                                                          sizeof
-                                                                          (iv)),
-              tp->iv_seed);
+
+/**
+ * Check internal invariants of the given KX record.
+ *
+ * @param kx record to check
+ */
+#define CHECK_KX(kx) check_kx_record(kx, __FILE__, __LINE__)
+#else
+#define CHECK_KX(kx) 
 #endif
-  /* trigger queue processing */
-  process_encrypted_neighbour_queue (n);
+
+/**
+ * Derive an authentication key from "set key" information
+ *
+ * @param akey authentication key to derive
+ * @param skey session key to use
+ * @param seed seed to use
+ * @param creation_time creation time to use
+ */
+static void
+derive_auth_key (struct GNUNET_CRYPTO_AuthKey *akey,
+                 const struct GNUNET_CRYPTO_AesSessionKey *skey, uint32_t seed,
+                 struct GNUNET_TIME_Absolute creation_time)
+{
+  static const char ctx[] = "authentication key";
+  struct GNUNET_TIME_AbsoluteNBO ctbe;
+
+  ctbe = GNUNET_TIME_absolute_hton (creation_time);
+  GNUNET_CRYPTO_hmac_derive_key (akey, skey, &seed, sizeof (seed), &skey->key,
+                                 sizeof (skey->key), &ctbe, sizeof (ctbe), ctx,
+                                 sizeof (ctx), NULL);
 }
 
 
 /**
- * We received a PONG message.  Validate and update our status.
+ * Derive an IV from packet information
  *
- * @param n sender of the PONG
- * @param m the encrypted PONG message itself
- * @param ats performance data
- * @param ats_count number of entries in ats (excluding 0-termination)
+ * @param iv initialization vector to initialize
+ * @param skey session key to use
+ * @param seed seed to use
+ * @param identity identity of the other peer to use
  */
 static void
-handle_pong (struct Neighbour *n, const struct PongMessage *m,
-             const struct GNUNET_TRANSPORT_ATS_Information *ats,
-             uint32_t ats_count)
+derive_iv (struct GNUNET_CRYPTO_AesInitializationVector *iv,
+           const struct GNUNET_CRYPTO_AesSessionKey *skey, uint32_t seed,
+           const struct GNUNET_PeerIdentity *identity)
 {
-  struct PongMessage t;
-  struct ConnectNotifyMessage *cnm;
-  struct GNUNET_CRYPTO_AesInitializationVector iv;
-  char buf[GNUNET_SERVER_MAX_MESSAGE_SIZE - 1];
-  struct GNUNET_TRANSPORT_ATS_Information *mats;
-  size_t size;
-
-#if DEBUG_HANDSHAKE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Core service receives `%s' response from `%4s'.\n", "PONG",
-              GNUNET_i2s (&n->peer));
-#endif
-  /* mark as garbage, just to be sure */
-  memset (&t, 255, sizeof (t));
-  derive_pong_iv (&iv, &n->decrypt_key, m->iv_seed, n->ping_challenge,
-                  &my_identity);
-  if (GNUNET_OK !=
-      do_decrypt (n, &iv, &m->challenge, &t.challenge,
-                  sizeof (struct PongMessage) - ((void *) &m->challenge -
-                                                 (void *) m)))
-  {
-    GNUNET_break_op (0);
-    return;
-  }
-  GNUNET_STATISTICS_update (stats, gettext_noop ("# PONG messages decrypted"),
-                            1, GNUNET_NO);
-#if DEBUG_HANDSHAKE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Decrypted `%s' from `%4s' with challenge %u using key %u, IV %u (salt %u)\n",
-              "PONG", GNUNET_i2s (&t.target), (unsigned int) t.challenge,
-              (unsigned int) n->decrypt_key.crc32, GNUNET_CRYPTO_crc32_n (&iv,
-                                                                          sizeof
-                                                                          (iv)),
-              m->iv_seed);
-#endif
-  if ((0 != memcmp (&t.target, &n->peer, sizeof (struct GNUNET_PeerIdentity)))
-      || (n->ping_challenge != t.challenge))
-  {
-    /* PONG malformed */
-#if DEBUG_CORE
-    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                "Received malformed `%s' wanted sender `%4s' with challenge %u\n",
-                "PONG", GNUNET_i2s (&n->peer),
-                (unsigned int) n->ping_challenge);
-    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                "Received malformed `%s' received from `%4s' with challenge %u\n",
-                "PONG", GNUNET_i2s (&t.target), (unsigned int) t.challenge);
-#endif
-    GNUNET_break_op (n->ping_challenge != t.challenge);
-    return;
-  }
-  switch (n->status)
-  {
-  case PEER_STATE_DOWN:
-    GNUNET_break (0);           /* should be impossible */
-    return;
-  case PEER_STATE_KEY_SENT:
-    GNUNET_break (0);           /* should be impossible, how did we decrypt? */
-    return;
-  case PEER_STATE_KEY_RECEIVED:
-    GNUNET_STATISTICS_update (stats,
-                              gettext_noop
-                              ("# Session keys confirmed via PONG"), 1,
-                              GNUNET_NO);
-    n->status = PEER_STATE_KEY_CONFIRMED;
-    {
-      struct GNUNET_MessageHeader *hdr;
+  static const char ctx[] = "initialization vector";
 
-      hdr = compute_type_map_message ();
-      send_type_map_to_neighbour (hdr, &n->peer.hashPubKey, n);
-      GNUNET_free (hdr);
-    }
-    if (n->bw_out_external_limit.value__ != t.inbound_bw_limit.value__)
-    {
-      n->bw_out_external_limit = t.inbound_bw_limit;
-      n->bw_out =
-          GNUNET_BANDWIDTH_value_min (n->bw_out_external_limit,
-                                      n->bw_out_internal_limit);
-      GNUNET_BANDWIDTH_tracker_update_quota (&n->available_send_window,
-                                             n->bw_out);
-      GNUNET_TRANSPORT_set_quota (transport, &n->peer, n->bw_in, n->bw_out);
-    }
-#if DEBUG_CORE
-    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                "Confirmed key via `%s' message for peer `%4s'\n", "PONG",
-                GNUNET_i2s (&n->peer));
-#endif
-    if (n->retry_set_key_task != GNUNET_SCHEDULER_NO_TASK)
-    {
-      GNUNET_SCHEDULER_cancel (n->retry_set_key_task);
-      n->retry_set_key_task = GNUNET_SCHEDULER_NO_TASK;
-    }
-    update_neighbour_performance (n, ats, ats_count);
-    size =
-        sizeof (struct ConnectNotifyMessage) +
-        (n->ats_count) * sizeof (struct GNUNET_TRANSPORT_ATS_Information);
-    if (size >= GNUNET_SERVER_MAX_MESSAGE_SIZE)
-    {
-      GNUNET_break (0);
-      /* recovery strategy: throw away performance data */
-      GNUNET_array_grow (n->ats, n->ats_count, 0);
-      size =
-          sizeof (struct PeerStatusNotifyMessage) +
-          n->ats_count * sizeof (struct GNUNET_TRANSPORT_ATS_Information);
-    }
-    cnm = (struct ConnectNotifyMessage *) buf;
-    cnm->header.size = htons (size);
-    cnm->header.type = htons (GNUNET_MESSAGE_TYPE_CORE_NOTIFY_CONNECT);
-    cnm->ats_count = htonl (n->ats_count);
-    cnm->peer = n->peer;
-    mats = &cnm->ats;
-    memcpy (mats, n->ats,
-            n->ats_count * sizeof (struct GNUNET_TRANSPORT_ATS_Information));
-    mats[n->ats_count].type = htonl (GNUNET_TRANSPORT_ATS_ARRAY_TERMINATOR);
-    mats[n->ats_count].value = htonl (0);
-    send_to_all_clients (&cnm->header, GNUNET_NO,
-                         GNUNET_CORE_OPTION_SEND_CONNECT);
-    process_encrypted_neighbour_queue (n);
-    /* fall-through! */
-  case PEER_STATE_KEY_CONFIRMED:
-    n->last_activity = GNUNET_TIME_absolute_get ();
-    if (n->keep_alive_task != GNUNET_SCHEDULER_NO_TASK)
-      GNUNET_SCHEDULER_cancel (n->keep_alive_task);
-    n->keep_alive_task =
-        GNUNET_SCHEDULER_add_delayed (GNUNET_TIME_relative_divide
-                                      (GNUNET_CONSTANTS_IDLE_CONNECTION_TIMEOUT,
-                                       2), &send_keep_alive, n);
-    handle_peer_status_change (n);
-    break;
-  default:
-    GNUNET_break (0);
-    break;
-  }
+  GNUNET_CRYPTO_aes_derive_iv (iv, skey, &seed, sizeof (seed),
+                               &identity->hashPubKey.bits,
+                               sizeof (identity->hashPubKey.bits), ctx,
+                               sizeof (ctx), NULL);
 }
 
 
 /**
- * We received a SET_KEY message.  Validate and update
- * our key material and status.
+ * Derive an IV from pong packet information
  *
- * @param n the neighbour from which we received message m
- * @param m the set key message we received
- * @param ats performance data
- * @param ats_count number of entries in ats (excluding 0-termination)
+ * @param iv initialization vector to initialize
+ * @param skey session key to use
+ * @param seed seed to use
+ * @param challenge nonce to use
+ * @param identity identity of the other peer to use
  */
 static void
-handle_set_key (struct Neighbour *n, const struct SetKeyMessage *m,
-                const struct GNUNET_TRANSPORT_ATS_Information *ats,
-                uint32_t ats_count)
+derive_pong_iv (struct GNUNET_CRYPTO_AesInitializationVector *iv,
+                const struct GNUNET_CRYPTO_AesSessionKey *skey, uint32_t seed,
+                uint32_t challenge, const struct GNUNET_PeerIdentity *identity)
 {
-  struct SetKeyMessage *m_cpy;
-  struct GNUNET_TIME_Absolute t;
-  struct GNUNET_CRYPTO_AesSessionKey k;
-  struct PingMessage *ping;
-  struct PongMessage *pong;
-  enum PeerStateMachine sender_status;
+  static const char ctx[] = "pong initialization vector";
 
-#if DEBUG_CORE
+  GNUNET_CRYPTO_aes_derive_iv (iv, skey, &seed, sizeof (seed),
+                               &identity->hashPubKey.bits,
+                               sizeof (identity->hashPubKey.bits), &challenge,
+                               sizeof (challenge), ctx, sizeof (ctx), NULL);
+}
+
+
+/**
+ * Encrypt size bytes from in and write the result to out.  Use the
+ * key for outbound traffic of the given neighbour.
+ *
+ * @param kx key information context
+ * @param iv initialization vector to use
+ * @param in ciphertext
+ * @param out plaintext
+ * @param size size of in/out
+ * @return GNUNET_OK on success
+ */
+static int
+do_encrypt (struct GSC_KeyExchangeInfo *kx,
+            const struct GNUNET_CRYPTO_AesInitializationVector *iv,
+            const void *in, void *out, size_t size)
+{
+  if (size != (uint16_t) size)
+  {
+    GNUNET_break (0);
+    return GNUNET_NO;
+  }
+  GNUNET_assert (size ==
+                 GNUNET_CRYPTO_aes_encrypt (in, (uint16_t) size,
+                                            &kx->encrypt_key, iv, out));
+  GNUNET_STATISTICS_update (GSC_stats, gettext_noop ("# bytes encrypted"), size,
+                            GNUNET_NO);
+  /* the following is too sensitive to write to log files by accident,
+     so we require manual intervention to get this one... */
+#if 0
   GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Core service receives `%s' request from `%4s'.\n", "SET_KEY",
-              GNUNET_i2s (&n->peer));
+              "Encrypted %u bytes for `%4s' using key %u, IV %u\n",
+              (unsigned int) size, GNUNET_i2s (&kx->peer),
+              (unsigned int) kx->encrypt_key.crc32, GNUNET_CRYPTO_crc32_n (iv,
+                                                                           sizeof
+                                                                           (iv)));
 #endif
-  if (n->public_key == NULL)
+  return GNUNET_OK;
+}
+
+
+/**
+ * Decrypt size bytes from in and write the result to out.  Use the
+ * key for inbound traffic of the given neighbour.  This function does
+ * NOT do any integrity-checks on the result.
+ *
+ * @param kx key information context
+ * @param iv initialization vector to use
+ * @param in ciphertext
+ * @param out plaintext
+ * @param size size of in/out
+ * @return GNUNET_OK on success
+ */
+static int
+do_decrypt (struct GSC_KeyExchangeInfo *kx,
+            const struct GNUNET_CRYPTO_AesInitializationVector *iv,
+            const void *in, void *out, size_t size)
+{
+  if (size != (uint16_t) size)
   {
-    if (n->pitr != NULL)
-    {
-#if DEBUG_CORE
-      GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                  "Ignoring `%s' message due to lack of public key for peer (still trying to obtain one).\n",
-                  "SET_KEY");
+    GNUNET_break (0);
+    return GNUNET_NO;
+  }
+  if ( (kx->status != KX_STATE_KEY_RECEIVED) && (kx->status != KX_STATE_UP) &&
+       (kx->status != KX_STATE_REKEY_SENT) &&
+       (kx->status != KX_STATE_REKEY) )
+  {
+    GNUNET_break_op (0);
+    return GNUNET_SYSERR;
+  }
+  if (size !=
+      GNUNET_CRYPTO_aes_decrypt (in, (uint16_t) size, &kx->decrypt_key, iv,
+                                 out))
+  {
+    GNUNET_break (0);
+    return GNUNET_SYSERR;
+  }
+  GNUNET_STATISTICS_update (GSC_stats, gettext_noop ("# bytes decrypted"), size,
+                            GNUNET_NO);
+  /* the following is too sensitive to write to log files by accident,
+     so we require manual intervention to get this one... */
+#if 0
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
+              "Decrypted %u bytes from `%4s' using key %u, IV %u\n",
+              (unsigned int) size, GNUNET_i2s (&kx->peer),
+              (unsigned int) kx->decrypt_key.crc32, GNUNET_CRYPTO_crc32_n (iv,
+                                                                           sizeof
+                                                                           (*iv)));
 #endif
-      return;
-    }
-#if DEBUG_CORE
+  return GNUNET_OK;
+}
+
+
+/**
+ * Send our key (and encrypted PING) to the other peer.
+ *
+ * @param kx key exchange context
+ */
+static void
+send_key (struct GSC_KeyExchangeInfo *kx);
+
+
+/**
+ * Task that will retry "send_key" if our previous attempt failed.
+ *
+ * @param cls our 'struct GSC_KeyExchangeInfo'
+ * @param tc scheduler context
+ */
+static void
+set_key_retry_task (void *cls, const struct GNUNET_SCHEDULER_TaskContext *tc)
+{
+  struct GSC_KeyExchangeInfo *kx = cls;
+
+  kx->retry_set_key_task = GNUNET_SCHEDULER_NO_TASK;
+  kx->set_key_retry_frequency =
+      GNUNET_TIME_relative_multiply (kx->set_key_retry_frequency, 2);
+  send_key (kx);
+}
+
+
+/**
+ * PEERINFO is giving us a HELLO for a peer.  Add the public key to
+ * the neighbour's struct and continue with the key exchange.  Or, if
+ * we did not get a HELLO, just do nothing.
+ *
+ * @param cls the 'struct GSC_KeyExchangeInfo' to retry sending the key for
+ * @param peer the peer for which this is the HELLO
+ * @param hello HELLO message of that peer
+ * @param err_msg NULL if successful, otherwise contains error message
+ */
+static void
+process_hello (void *cls, const struct GNUNET_PeerIdentity *peer,
+               const struct GNUNET_HELLO_Message *hello, const char *err_msg)
+{
+  struct GSC_KeyExchangeInfo *kx = cls;
+  struct SetKeyMessage *skm;
+
+  CHECK_KX (kx);
+  if (NULL != err_msg)
+  {
     GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                "Lacking public key for peer, trying to obtain one (handle_set_key).\n");
-#endif
-    m_cpy = GNUNET_malloc (sizeof (struct SetKeyMessage));
-    memcpy (m_cpy, m, sizeof (struct SetKeyMessage));
-    /* lookup n's public key, then try again */
-    GNUNET_assert (n->skm == NULL);
-    n->skm = m_cpy;
-    n->pitr =
-        GNUNET_PEERINFO_iterate (peerinfo, &n->peer, GNUNET_TIME_UNIT_MINUTES,
-                                 &process_hello_retry_handle_set_key, n);
-    GNUNET_STATISTICS_update (stats,
+                _("Error in communication with PEERINFO service\n"));
+    kx->pitr = NULL;
+    if (GNUNET_SCHEDULER_NO_TASK != kx->retry_set_key_task)
+      GNUNET_SCHEDULER_cancel (kx->retry_set_key_task);
+    kx->retry_set_key_task =
+        GNUNET_SCHEDULER_add_delayed (kx->set_key_retry_frequency,
+                                      &set_key_retry_task, kx);
+    return;
+  }
+  if (NULL == peer)
+  {
+    kx->pitr = NULL;
+    if (NULL != kx->public_key)
+      return;                   /* done here */
+    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
+                "Failed to obtain public key for peer `%4s', delaying processing of SET_KEY\n",
+                GNUNET_i2s (&kx->peer));
+    GNUNET_STATISTICS_update (GSC_stats,
                               gettext_noop
-                              ("# SET_KEY messages deferred (need public key)"),
+                              ("# Delayed connecting due to lack of public key"),
                               1, GNUNET_NO);
+    if (GNUNET_SCHEDULER_NO_TASK != kx->retry_set_key_task)
+      GNUNET_SCHEDULER_cancel (kx->retry_set_key_task);
+    kx->retry_set_key_task =
+        GNUNET_SCHEDULER_add_delayed (kx->set_key_retry_frequency,
+                                      &set_key_retry_task, kx);
+    return;
+  }
+  GNUNET_break (0 == memcmp (peer, &kx->peer, sizeof (struct GNUNET_PeerIdentity)));
+  if (NULL != kx->public_key)
+  {
+    /* already have public key, why are we here? */
+    GNUNET_break (0);
+    return;
+  }
+  GNUNET_assert (GNUNET_SCHEDULER_NO_TASK == kx->retry_set_key_task);
+  kx->public_key =
+      GNUNET_malloc (sizeof (struct GNUNET_CRYPTO_RsaPublicKeyBinaryEncoded));
+  if (GNUNET_OK != GNUNET_HELLO_get_key (hello, kx->public_key))
+  {
+    GNUNET_break (0);
+    GNUNET_free (kx->public_key);
+    kx->public_key = NULL;
+    CHECK_KX (kx);
+    return;
+  }
+  CHECK_KX (kx);
+  send_key (kx);
+  if (NULL != kx->skm_received)
+  {
+    skm = kx->skm_received;
+    kx->skm_received = NULL;
+    GSC_KX_handle_set_key (kx, &skm->header);
+    GNUNET_free (skm);
+  }
+}
+
+
+/**
+ * Start the key exchange with the given peer.
+ *
+ * @param pid identity of the peer to do a key exchange with
+ * @return key exchange information context
+ */
+struct GSC_KeyExchangeInfo *
+GSC_KX_start (const struct GNUNET_PeerIdentity *pid)
+{
+  struct GSC_KeyExchangeInfo *kx;
+
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Initiating key exchange with `%s'\n",
+              GNUNET_i2s (pid));
+  GNUNET_STATISTICS_update (GSC_stats,
+                            gettext_noop ("# key exchanges initiated"), 1,
+                            GNUNET_NO);
+  kx = GNUNET_malloc (sizeof (struct GSC_KeyExchangeInfo));
+  kx->peer = *pid;
+  kx->set_key_retry_frequency = INITIAL_SET_KEY_RETRY_FREQUENCY;
+  kx->pitr =
+      GNUNET_PEERINFO_iterate (peerinfo, pid,
+                               GNUNET_TIME_UNIT_FOREVER_REL /* timeout? */ ,
+                               &process_hello, kx);
+  CHECK_KX (kx);
+  return kx;
+}
+
+
+/**
+ * Stop key exchange with the given peer.  Clean up key material.
+ *
+ * @param kx key exchange to stop
+ */
+void
+GSC_KX_stop (struct GSC_KeyExchangeInfo *kx)
+{
+  GNUNET_STATISTICS_update (GSC_stats, gettext_noop ("# key exchanges stopped"),
+                            1, GNUNET_NO);
+  if (NULL != kx->pitr)
+  {
+    GNUNET_PEERINFO_iterate_cancel (kx->pitr);
+    kx->pitr = NULL;
+  }
+  if (kx->retry_set_key_task != GNUNET_SCHEDULER_NO_TASK)
+  {
+    GNUNET_SCHEDULER_cancel (kx->retry_set_key_task);
+    kx->retry_set_key_task = GNUNET_SCHEDULER_NO_TASK;
+  }
+  if (kx->keep_alive_task != GNUNET_SCHEDULER_NO_TASK)
+  {
+    GNUNET_SCHEDULER_cancel (kx->keep_alive_task);
+    kx->keep_alive_task = GNUNET_SCHEDULER_NO_TASK;
+  }
+  GNUNET_free_non_null (kx->skm_received);
+  GNUNET_free_non_null (kx->ping_received);
+  GNUNET_free_non_null (kx->pong_received);
+  GNUNET_free_non_null (kx->emsg_received);
+  GNUNET_free_non_null (kx->public_key);
+  GNUNET_free (kx);
+}
+
+
+/**
+ * We received a SET_KEY message.  Validate and update
+ * our key material and status.
+ *
+ * @param kx key exchange status for the corresponding peer
+ * @param msg the set key message we received
+ */
+void
+GSC_KX_handle_set_key (struct GSC_KeyExchangeInfo *kx,
+                       const struct GNUNET_MessageHeader *msg)
+{
+  const struct SetKeyMessage *m;
+  struct GNUNET_TIME_Absolute t;
+  struct GNUNET_CRYPTO_AesSessionKey k;
+  struct PingMessage *ping;
+  struct PongMessage *pong;
+  enum KxStateMachine sender_status;
+  uint16_t size;
+  
+  CHECK_KX (kx);
+  size = ntohs (msg->size);
+  if (size != sizeof (struct SetKeyMessage))
+  {
+    GNUNET_break_op (0);
+    return;
+  }
+  m = (const struct SetKeyMessage *) msg;
+  GNUNET_STATISTICS_update (GSC_stats, gettext_noop ("# session keys received"),
+                            1, GNUNET_NO);
+
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
+              "Core service receives `%s' request from `%4s'.\n", "SET_KEY",
+              GNUNET_i2s (&kx->peer));
+  if (NULL == kx->public_key)
+  {
+    GNUNET_free_non_null (kx->skm_received);
+    kx->skm_received = (struct SetKeyMessage *) GNUNET_copy_message (msg);
     return;
   }
   if (0 !=
-      memcmp (&m->target, &my_identity, sizeof (struct GNUNET_PeerIdentity)))
+      memcmp (&m->target, &GSC_my_identity,
+              sizeof (struct GNUNET_PeerIdentity)))
   {
     GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                _
-                ("Received `%s' message that was for `%s', not for me.  Ignoring.\n"),
-                "SET_KEY", GNUNET_i2s (&m->target));
+                _("`%s' is for `%s', not for me.  Ignoring.\n"), "SET_KEY",
+                GNUNET_i2s (&m->target));
     return;
   }
   if ((ntohl (m->purpose.size) !=
@@ -431,16 +853,16 @@ handle_set_key (struct Neighbour *n, const struct SetKeyMessage *m,
        sizeof (struct GNUNET_PeerIdentity)) ||
       (GNUNET_OK !=
        GNUNET_CRYPTO_rsa_verify (GNUNET_SIGNATURE_PURPOSE_SET_KEY, &m->purpose,
-                                 &m->signature, n->public_key)))
+                                 &m->signature, kx->public_key)))
   {
     /* invalid signature */
+    CHECK_KX (kx);
     GNUNET_break_op (0);
     return;
   }
   t = GNUNET_TIME_absolute_ntoh (m->creation_time);
-  if (((n->status == PEER_STATE_KEY_RECEIVED) ||
-       (n->status == PEER_STATE_KEY_CONFIRMED)) &&
-      (t.abs_value < n->decrypt_key_created.abs_value))
+  if (((kx->status == KX_STATE_KEY_RECEIVED) || (kx->status == KX_STATE_UP)) &&
+      (t.abs_value < kx->decrypt_key_created.abs_value))
   {
     /* this could rarely happen due to massive re-ordering of
      * messages on the network level, but is most likely either
@@ -448,9 +870,6 @@ handle_set_key (struct Neighbour *n, const struct SetKeyMessage *m,
     GNUNET_break_op (0);
     return;
   }
-#if DEBUG_CORE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Decrypting key material.\n");
-#endif
   if ((GNUNET_CRYPTO_rsa_decrypt
        (my_private_key, &m->encrypted_key, &k,
         sizeof (struct GNUNET_CRYPTO_AesSessionKey)) !=
@@ -458,174 +877,464 @@ handle_set_key (struct Neighbour *n, const struct SetKeyMessage *m,
       (GNUNET_OK != GNUNET_CRYPTO_aes_check_session_key (&k)))
   {
     /* failed to decrypt !? */
+    GNUNET_log (GNUNET_ERROR_TYPE_ERROR,
+               "Invalid key %x decrypted by %s from message %u (origin: %s)\n",
+               (unsigned int) GNUNET_CRYPTO_crc32_n (&k, sizeof (struct GNUNET_CRYPTO_AesSessionKey)),
+               GNUNET_i2s (&GSC_my_identity),
+               (unsigned int) GNUNET_CRYPTO_crc32_n (&m->encrypted_key, sizeof (struct GNUNET_CRYPTO_RsaEncryptedData)),
+               GNUNET_h2s (&kx->peer.hashPubKey));
     GNUNET_break_op (0);
     return;
   }
-  GNUNET_STATISTICS_update (stats,
+  GNUNET_STATISTICS_update (GSC_stats,
                             gettext_noop ("# SET_KEY messages decrypted"), 1,
                             GNUNET_NO);
-  n->decrypt_key = k;
-  if (n->decrypt_key_created.abs_value != t.abs_value)
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Received SET_KEY from `%s'\n",
+              GNUNET_i2s (&kx->peer));
+  kx->decrypt_key = k;
+  if (kx->decrypt_key_created.abs_value != t.abs_value)
   {
     /* fresh key, reset sequence numbers */
-    n->last_sequence_number_received = 0;
-    n->last_packets_bitmap = 0;
-    n->decrypt_key_created = t;
+    kx->last_sequence_number_received = 0;
+    kx->last_packets_bitmap = 0;
+    kx->decrypt_key_created = t;
   }
-  update_neighbour_performance (n, ats, ats_count);
-  sender_status = (enum PeerStateMachine) ntohl (m->sender_status);
-  switch (n->status)
+  sender_status = (enum KxStateMachine) ntohl (m->sender_status);
+  switch (kx->status)
   {
-  case PEER_STATE_DOWN:
-    n->status = PEER_STATE_KEY_RECEIVED;
-#if DEBUG_CORE
-    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                "Responding to `%s' with my own key.\n", "SET_KEY");
-#endif
-    send_key (n);
+  case KX_STATE_DOWN:
+    kx->status = KX_STATE_KEY_RECEIVED;
+    /* we're not up, so we are already doing 'send_key' */
     break;
-  case PEER_STATE_KEY_SENT:
-  case PEER_STATE_KEY_RECEIVED:
-    n->status = PEER_STATE_KEY_RECEIVED;
-    if ((sender_status != PEER_STATE_KEY_RECEIVED) &&
-        (sender_status != PEER_STATE_KEY_CONFIRMED))
-    {
-#if DEBUG_CORE
-      GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                  "Responding to `%s' with my own key (other peer has status %u).\n",
-                  "SET_KEY", (unsigned int) sender_status);
-#endif
-      send_key (n);
-    }
+  case KX_STATE_KEY_SENT:
+    kx->status = KX_STATE_KEY_RECEIVED;
+    /* we're not up, so we are already doing 'send_key' */
     break;
-  case PEER_STATE_KEY_CONFIRMED:
-    if ((sender_status != PEER_STATE_KEY_RECEIVED) &&
-        (sender_status != PEER_STATE_KEY_CONFIRMED))
-    {
-#if DEBUG_CORE
-      GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                  "Responding to `%s' with my own key (other peer has status %u), I was already fully up.\n",
-                  "SET_KEY", (unsigned int) sender_status);
-#endif
-      send_key (n);
-    }
+  case KX_STATE_KEY_RECEIVED:
+    /* we're not up, so we are already doing 'send_key' */
+    break;
+  case KX_STATE_UP: 
+    if ((sender_status == KX_STATE_DOWN) ||
+        (sender_status == KX_STATE_KEY_SENT))
+      send_key (kx);            /* we are up, but other peer is not! */
+    break;
+  case KX_STATE_REKEY:
+    if ((sender_status == KX_STATE_DOWN) ||
+        (sender_status == KX_STATE_KEY_SENT))
+      send_key (kx);            /* we are up, but other peer is not! */
+    break;
+  case KX_STATE_REKEY_SENT:
+    if ((sender_status == KX_STATE_DOWN) ||
+        (sender_status == KX_STATE_KEY_SENT))
+      send_key (kx);            /* we are up, but other peer is not! */
     break;
   default:
     GNUNET_break (0);
     break;
   }
-  if (n->pending_ping != NULL)
+  if (NULL != kx->ping_received)
   {
-    ping = n->pending_ping;
-    n->pending_ping = NULL;
-    handle_ping (n, ping, NULL, 0);
+    ping = kx->ping_received;
+    kx->ping_received = NULL;
+    GSC_KX_handle_ping (kx, &ping->header);
     GNUNET_free (ping);
   }
-  if (n->pending_pong != NULL)
+  if (NULL != kx->pong_received)
   {
-    pong = n->pending_pong;
-    n->pending_pong = NULL;
-    handle_pong (n, pong, NULL, 0);
+    pong = kx->pong_received;
+    kx->pong_received = NULL;
+    GSC_KX_handle_pong (kx, &pong->header);
     GNUNET_free (pong);
   }
 }
 
 
+/**
+ * We received a PING message.  Validate and transmit
+ * a PONG message.
+ *
+ * @param kx key exchange status for the corresponding peer
+ * @param msg the encrypted PING message itself
+ */
+void
+GSC_KX_handle_ping (struct GSC_KeyExchangeInfo *kx,
+                    const struct GNUNET_MessageHeader *msg)
+{
+  const struct PingMessage *m;
+  struct PingMessage t;
+  struct PongMessage tx;
+  struct PongMessage tp;
+  struct GNUNET_CRYPTO_AesInitializationVector iv;
+  uint16_t msize;
+
+  msize = ntohs (msg->size);
+  if (msize != sizeof (struct PingMessage))
+  {
+    GNUNET_break_op (0);
+    return;
+  }
+  GNUNET_STATISTICS_update (GSC_stats,
+                            gettext_noop ("# PING messages received"), 1,
+                            GNUNET_NO);
+  if ((kx->status != KX_STATE_KEY_RECEIVED) && (kx->status != KX_STATE_UP) &&
+      (kx->status != KX_STATE_REKEY_SENT))
+  {
+    /* defer */
+    GNUNET_free_non_null (kx->ping_received);
+    kx->ping_received = (struct PingMessage *) GNUNET_copy_message (msg);
+    return;
+  }
+  m = (const struct PingMessage *) msg;
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
+              "Core service receives `%s' request from `%4s'.\n", "PING",
+              GNUNET_i2s (&kx->peer));
+  derive_iv (&iv, &kx->decrypt_key, m->iv_seed, &GSC_my_identity);
+  if (GNUNET_OK !=
+      do_decrypt (kx, &iv, &m->target, &t.target,
+                  sizeof (struct PingMessage) - ((void *) &m->target -
+                                                 (void *) m)))
+  {
+    GNUNET_break_op (0);
+    return;
+  }
+  if (0 !=
+      memcmp (&t.target, &GSC_my_identity, sizeof (struct GNUNET_PeerIdentity)))
+  {
+    char sender[9];
+    char peer[9];
+
+    GNUNET_snprintf (sender, sizeof (sender), "%8s", GNUNET_i2s (&kx->peer));
+    GNUNET_snprintf (peer, sizeof (peer), "%8s", GNUNET_i2s (&t.target));
+    GNUNET_log (GNUNET_ERROR_TYPE_ERROR,
+                _
+                ("Received PING from `%s' for different identity: I am `%s', PONG identity: `%s'\n"),
+                sender, GNUNET_i2s (&GSC_my_identity), peer);
+    GNUNET_break_op (0);
+    return;
+  }
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Received PING from `%s'\n",
+              GNUNET_i2s (&kx->peer));
+  /* construct PONG */
+  tx.reserved = GNUNET_BANDWIDTH_VALUE_MAX;
+  tx.challenge = t.challenge;
+  tx.target = t.target;
+  tp.header.type = htons (GNUNET_MESSAGE_TYPE_CORE_PONG);
+  tp.header.size = htons (sizeof (struct PongMessage));
+  tp.iv_seed =
+      GNUNET_CRYPTO_random_u32 (GNUNET_CRYPTO_QUALITY_NONCE, UINT32_MAX);
+  derive_pong_iv (&iv, &kx->encrypt_key, tp.iv_seed, t.challenge, &kx->peer);
+  do_encrypt (kx, &iv, &tx.challenge, &tp.challenge,
+              sizeof (struct PongMessage) - ((void *) &tp.challenge -
+                                             (void *) &tp));
+  GNUNET_STATISTICS_update (GSC_stats, gettext_noop ("# PONG messages created"),
+                            1, GNUNET_NO);
+  GSC_NEIGHBOURS_transmit (&kx->peer, &tp.header,
+                           GNUNET_TIME_UNIT_FOREVER_REL /* FIXME: timeout */ );
+}
+
+
+/**
+ * Create a fresh SET KEY message for transmission to the other peer.
+ * Also creates a new key.
+ *
+ * @param kx key exchange context to create SET KEY message for
+ */
+static void
+setup_fresh_setkey (struct GSC_KeyExchangeInfo *kx)
+{
+  struct SetKeyMessage *skm;
+
+  GNUNET_CRYPTO_aes_create_session_key (&kx->encrypt_key);
+  kx->encrypt_key_created = GNUNET_TIME_absolute_get ();
+  skm = &kx->skm;
+  skm->header.size = htons (sizeof (struct SetKeyMessage));
+  skm->header.type = htons (GNUNET_MESSAGE_TYPE_CORE_SET_KEY);
+  skm->purpose.size =
+      htonl (sizeof (struct GNUNET_CRYPTO_RsaSignaturePurpose) +
+             sizeof (struct GNUNET_TIME_AbsoluteNBO) +
+             sizeof (struct GNUNET_CRYPTO_RsaEncryptedData) +
+             sizeof (struct GNUNET_PeerIdentity));
+  skm->purpose.purpose = htonl (GNUNET_SIGNATURE_PURPOSE_SET_KEY);
+  skm->creation_time = GNUNET_TIME_absolute_hton (kx->encrypt_key_created);
+  skm->target = kx->peer;
+  CHECK_KX (kx);
+  GNUNET_assert (GNUNET_OK ==
+                 GNUNET_CRYPTO_rsa_encrypt (&kx->encrypt_key,
+                                            sizeof (struct
+                                                    GNUNET_CRYPTO_AesSessionKey),
+                                            kx->public_key,
+                                            &skm->encrypted_key));
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
+             "Encrypting key %x for %s resulting in message %u (origin: %s)\n",
+             (unsigned int) GNUNET_CRYPTO_crc32_n (&kx->encrypt_key, sizeof (struct GNUNET_CRYPTO_AesSessionKey)),
+             GNUNET_i2s (&kx->peer),
+             (unsigned int) GNUNET_CRYPTO_crc32_n (&skm->encrypted_key, sizeof (struct GNUNET_CRYPTO_RsaEncryptedData)),
+             GNUNET_h2s (&GSC_my_identity.hashPubKey));
+
+  GNUNET_assert (GNUNET_OK ==
+                 GNUNET_CRYPTO_rsa_sign (my_private_key, &skm->purpose,
+                                         &skm->signature));
+}
+
+
+/**
+ * Create a fresh PING message for transmission to the other peer.
+ *
+ * @param kx key exchange context to create PING for
+ */
+static void
+setup_fresh_ping (struct GSC_KeyExchangeInfo *kx)
+{
+  struct PingMessage pp;
+  struct PingMessage *pm;
+  struct GNUNET_CRYPTO_AesInitializationVector iv;
+
+  pm = &kx->ping;
+  pm->header.size = htons (sizeof (struct PingMessage));
+  pm->header.type = htons (GNUNET_MESSAGE_TYPE_CORE_PING);
+  pm->iv_seed =
+      GNUNET_CRYPTO_random_u32 (GNUNET_CRYPTO_QUALITY_NONCE, UINT32_MAX);
+  derive_iv (&iv, &kx->encrypt_key, pm->iv_seed, &kx->peer);
+  pp.challenge = kx->ping_challenge;
+  pp.target = kx->peer;
+  do_encrypt (kx, &iv, &pp.target, &pm->target,
+              sizeof (struct PingMessage) - ((void *) &pm->target -
+                                             (void *) pm));
+}
+
+
+/**
+ * Task triggered when a neighbour entry is about to time out
+ * (and we should prevent this by sending a PING).
+ *
+ * @param cls the 'struct GSC_KeyExchangeInfo'
+ * @param tc scheduler context (not used)
+ */
+static void
+send_keep_alive (void *cls, const struct GNUNET_SCHEDULER_TaskContext *tc)
+{
+  struct GSC_KeyExchangeInfo *kx = cls;
+  struct GNUNET_TIME_Relative retry;
+  struct GNUNET_TIME_Relative left;
+
+  kx->keep_alive_task = GNUNET_SCHEDULER_NO_TASK;
+  left = GNUNET_TIME_absolute_get_remaining (kx->timeout);
+  if (0 == left.rel_value)
+  {
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop ("# sessions terminated by timeout"),
+                              1, GNUNET_NO);
+    GSC_SESSIONS_end (&kx->peer);
+    kx->status = KX_STATE_DOWN;
+    send_key (kx);
+    return;
+  }
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Sending KEEPALIVE to `%s'\n",
+              GNUNET_i2s (&kx->peer));
+  GNUNET_STATISTICS_update (GSC_stats,
+                            gettext_noop ("# keepalive messages sent"), 1,
+                            GNUNET_NO);
+  setup_fresh_ping (kx);
+  GSC_NEIGHBOURS_transmit (&kx->peer, &kx->ping.header,
+                           kx->set_key_retry_frequency);
+  retry =
+      GNUNET_TIME_relative_max (GNUNET_TIME_relative_divide (left, 2),
+                                MIN_PING_FREQUENCY);
+  kx->keep_alive_task =
+      GNUNET_SCHEDULER_add_delayed (retry, &send_keep_alive, kx);
+}
+
+
+/**
+ * We've seen a valid message from the other peer.
+ * Update the time when the session would time out
+ * and delay sending our keep alive message further.
+ *
+ * @param kx key exchange where we saw activity
+ */
+static void
+update_timeout (struct GSC_KeyExchangeInfo *kx)
+{
+  kx->timeout =
+      GNUNET_TIME_relative_to_absolute
+      (GNUNET_CONSTANTS_IDLE_CONNECTION_TIMEOUT);
+  if (kx->keep_alive_task != GNUNET_SCHEDULER_NO_TASK)
+    GNUNET_SCHEDULER_cancel (kx->keep_alive_task);
+  kx->keep_alive_task =
+      GNUNET_SCHEDULER_add_delayed (GNUNET_TIME_relative_divide
+                                    (GNUNET_CONSTANTS_IDLE_CONNECTION_TIMEOUT,
+                                     2), &send_keep_alive, kx);
+}
+
+
+/**
+ * Trigger rekeying event.
+ * 
+ * @param cls the 'struct GSC_KeyExchangeInfo'
+ * @param tc schedule context (unused)
+ */
+static void
+trigger_rekey (void *cls,
+              const struct GNUNET_SCHEDULER_TaskContext *tc)
+{
+  struct GSC_KeyExchangeInfo *kx = cls;
+  
+  GNUNET_break (KX_STATE_UP == kx->status);
+  kx->status = KX_STATE_REKEY;
+  kx->set_key_retry_frequency = INITIAL_SET_KEY_RETRY_FREQUENCY;
+  kx->retry_set_key_task =
+    GNUNET_SCHEDULER_add_delayed (kx->set_key_retry_frequency,
+                                 &set_key_retry_task, kx);
+}
+
+
+/**
+ * Schedule rekey operation.
+ *
+ * @param kx key exchange to schedule rekey for
+ */
+static void
+schedule_rekey (struct GSC_KeyExchangeInfo *kx)
+{
+  struct GNUNET_TIME_Relative rdelay;
+
+  if (GNUNET_SCHEDULER_NO_TASK != kx->retry_set_key_task)  
+    GNUNET_SCHEDULER_cancel (kx->retry_set_key_task);
+  rdelay = REKEY_FREQUENCY;
+  /* randomize rekey frequency by one minute to avoid synchronization */
+  rdelay.rel_value += GNUNET_CRYPTO_random_u32 (GNUNET_CRYPTO_QUALITY_WEAK,
+                                               60 * 1000);
+  kx->retry_set_key_task = GNUNET_SCHEDULER_add_delayed (REKEY_FREQUENCY,
+                                                        &trigger_rekey,
+                                                        kx);   
+}
+
 
 /**
- * PEERINFO is giving us a HELLO for a peer.  Add the public key to
- * the neighbour's struct and retry send_key.  Or, if we did not get a
- * HELLO, just do nothing.
+ * We received a PONG message.  Validate and update our status.
  *
- * @param cls the 'struct Neighbour' to retry sending the key for
- * @param peer the peer for which this is the HELLO
- * @param hello HELLO message of that peer
- * @param err_msg NULL if successful, otherwise contains error message
+ * @param kx key exchange context for the the PONG
+ * @param msg the encrypted PONG message itself
  */
-static void
-process_hello_retry_send_key (void *cls, const struct GNUNET_PeerIdentity *peer,
-                              const struct GNUNET_HELLO_Message *hello,
-                              const char *err_msg)
+void
+GSC_KX_handle_pong (struct GSC_KeyExchangeInfo *kx,
+                    const struct GNUNET_MessageHeader *msg)
 {
-  struct Neighbour *n = cls;
-
-  if (err_msg != NULL)
-  {
-    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                _("Error in communication with PEERINFO service\n"));
-    /* return; */
-  }
+  const struct PongMessage *m;
+  struct PongMessage t;
+  struct EncryptedMessage *emsg;
+  struct GNUNET_CRYPTO_AesInitializationVector iv;
+  uint16_t msize;
 
-  if (peer == NULL)
+  msize = ntohs (msg->size);
+  if (sizeof (struct PongMessage) != msize)
   {
-#if DEBUG_CORE
-    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Entered `%s' and `%s' is NULL!\n",
-                "process_hello_retry_send_key", "peer");
-#endif
-    n->pitr = NULL;
-    if (n->public_key != NULL)
-    {
-      if (n->retry_set_key_task != GNUNET_SCHEDULER_NO_TASK)
-      {
-        GNUNET_SCHEDULER_cancel (n->retry_set_key_task);
-        n->retry_set_key_task = GNUNET_SCHEDULER_NO_TASK;
-      }
-      GNUNET_STATISTICS_update (stats,
-                                gettext_noop
-                                ("# SET_KEY messages deferred (need public key)"),
-                                -1, GNUNET_NO);
-      send_key (n);
-    }
-    else
-    {
-#if DEBUG_CORE
-      GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                  "Failed to obtain public key for peer `%4s', delaying processing of SET_KEY\n",
-                  GNUNET_i2s (&n->peer));
-#endif
-      GNUNET_STATISTICS_update (stats,
-                                gettext_noop
-                                ("# Delayed connecting due to lack of public key"),
-                                1, GNUNET_NO);
-      if (GNUNET_SCHEDULER_NO_TASK == n->retry_set_key_task)
-        n->retry_set_key_task =
-            GNUNET_SCHEDULER_add_delayed (n->set_key_retry_frequency,
-                                          &set_key_retry_task, n);
-    }
+    GNUNET_break_op (0);
     return;
   }
-
-#if DEBUG_CORE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Entered `%s' for peer `%4s'\n",
-              "process_hello_retry_send_key", GNUNET_i2s (peer));
-#endif
-  if (n->public_key != NULL)
+  GNUNET_STATISTICS_update (GSC_stats,
+                            gettext_noop ("# PONG messages received"), 1,
+                            GNUNET_NO);
+  switch (kx->status)
   {
-    /* already have public key, why are we here? */
+  case KX_STATE_DOWN:
+    return;
+  case KX_STATE_KEY_SENT:
+    GNUNET_free_non_null (kx->pong_received);
+    kx->pong_received = (struct PongMessage *) GNUNET_copy_message (msg);    
+    return;
+  case KX_STATE_KEY_RECEIVED:
+    break;
+  case KX_STATE_UP:
+    break;
+  case KX_STATE_REKEY:
+    break;
+  case KX_STATE_REKEY_SENT:
+    break;
+  default:
     GNUNET_break (0);
     return;
   }
-
-#if DEBUG_CORE
+  m = (const struct PongMessage *) msg;
   GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Received new `%s' message for `%4s', initiating key exchange.\n",
-              "HELLO", GNUNET_i2s (peer));
-#endif
-  n->public_key =
-      GNUNET_malloc (sizeof (struct GNUNET_CRYPTO_RsaPublicKeyBinaryEncoded));
-  if (GNUNET_OK != GNUNET_HELLO_get_key (hello, n->public_key))
+              "Core service receives `%s' response from `%4s'.\n", "PONG",
+              GNUNET_i2s (&kx->peer));
+  /* mark as garbage, just to be sure */
+  memset (&t, 255, sizeof (t));
+  derive_pong_iv (&iv, &kx->decrypt_key, m->iv_seed, kx->ping_challenge,
+                  &GSC_my_identity);
+  if (GNUNET_OK !=
+      do_decrypt (kx, &iv, &m->challenge, &t.challenge,
+                  sizeof (struct PongMessage) - ((void *) &m->challenge -
+                                                 (void *) m)))
   {
-    GNUNET_STATISTICS_update (stats,
-                              gettext_noop
-                              ("# Error extracting public key from HELLO"), 1,
-                              GNUNET_NO);
-    GNUNET_free (n->public_key);
-    n->public_key = NULL;
-#if DEBUG_CORE
+    GNUNET_break_op (0);
+    return;
+  }
+  GNUNET_STATISTICS_update (GSC_stats,
+                            gettext_noop ("# PONG messages decrypted"), 1,
+                            GNUNET_NO);
+  if ((0 != memcmp (&t.target, &kx->peer, sizeof (struct GNUNET_PeerIdentity)))
+      || (kx->ping_challenge != t.challenge))
+  {
+    /* PONG malformed */
     GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                "GNUNET_HELLO_get_key returned awfully\n");
-#endif
+                "Received malformed `%s' wanted sender `%4s' with challenge %u\n",
+                "PONG", GNUNET_i2s (&kx->peer),
+                (unsigned int) kx->ping_challenge);
+    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
+                "Received malformed `%s' received from `%4s' with challenge %u\n",
+                "PONG", GNUNET_i2s (&t.target), (unsigned int) t.challenge);
+    return;
+  }
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Received PONG from `%s'\n",
+              GNUNET_i2s (&kx->peer));
+  switch (kx->status)
+  {
+  case KX_STATE_DOWN:
+    GNUNET_break (0);           /* should be impossible */
+    return;
+  case KX_STATE_KEY_SENT:
+    GNUNET_break (0);           /* should be impossible */
     return;
+  case KX_STATE_KEY_RECEIVED:
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop
+                              ("# session keys confirmed via PONG"), 1,
+                              GNUNET_NO);
+    kx->status = KX_STATE_UP;
+    GSC_SESSIONS_create (&kx->peer, kx);
+    CHECK_KX (kx);
+    schedule_rekey (kx);
+    GNUNET_assert (GNUNET_SCHEDULER_NO_TASK == kx->keep_alive_task);
+    if (NULL != kx->emsg_received)
+    {
+      emsg = kx->emsg_received;
+      kx->emsg_received = NULL;
+      GSC_KX_handle_encrypted_message (kx, &emsg->header, NULL,
+                                       0 /* FIXME: ATSI */ );
+      GNUNET_free (emsg);
+    }
+    update_timeout (kx);
+    break;
+  case KX_STATE_UP:
+    update_timeout (kx);
+    break;
+  case KX_STATE_REKEY:
+    update_timeout (kx);
+    break;
+  case KX_STATE_REKEY_SENT:
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop
+                              ("# rekey operations confirmed via PONG"), 1,
+                              GNUNET_NO);
+    kx->status = KX_STATE_UP;
+    schedule_rekey (kx);
+    update_timeout (kx);
+    break;
+  default:
+    GNUNET_break (0);
+    break;
   }
 }
 
@@ -633,326 +1342,410 @@ process_hello_retry_send_key (void *cls, const struct GNUNET_PeerIdentity *peer,
 /**
  * Send our key (and encrypted PING) to the other peer.
  *
- * @param n the other peer
+ * @param kx key exchange context
  */
 static void
-send_key (struct Neighbour *n)
+send_key (struct GSC_KeyExchangeInfo *kx)
 {
-  struct MessageEntry *pos;
-  struct SetKeyMessage *sm;
-  struct MessageEntry *me;
-  struct PingMessage pp;
-  struct PingMessage *pm;
-  struct GNUNET_CRYPTO_AesInitializationVector iv;
-
-  if (n->retry_set_key_task != GNUNET_SCHEDULER_NO_TASK)
+  CHECK_KX (kx);
+  if (GNUNET_SCHEDULER_NO_TASK != kx->retry_set_key_task)
   {
-    GNUNET_SCHEDULER_cancel (n->retry_set_key_task);
-    n->retry_set_key_task = GNUNET_SCHEDULER_NO_TASK;
+     GNUNET_SCHEDULER_cancel (kx->retry_set_key_task);
+     kx->retry_set_key_task = GNUNET_SCHEDULER_NO_TASK;
   }
-  if (n->pitr != NULL)
+  if (KX_STATE_UP == kx->status)
+    return;                     /* nothing to do */
+  if (NULL == kx->public_key)
   {
-#if DEBUG_CORE
+    /* lookup public key, then try again */
     GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                "Key exchange in progress with `%4s'.\n",
-                GNUNET_i2s (&n->peer));
-#endif
-    return;                     /* already in progress */
-  }
-  if (GNUNET_YES != n->is_connected)
-  {
-    GNUNET_STATISTICS_update (stats,
-                              gettext_noop
-                              ("# Asking transport to connect (for SET_KEY)"),
-                              1, GNUNET_NO);
-    GNUNET_TRANSPORT_try_connect (transport, &n->peer);
-    return;
-  }
-#if DEBUG_CORE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Asked to perform key exchange with `%4s'.\n",
-              GNUNET_i2s (&n->peer));
-#endif
-  if (n->public_key == NULL)
-  {
-    /* lookup n's public key, then try again */
-#if DEBUG_CORE
-    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                "Lacking public key for `%4s', trying to obtain one (send_key).\n",
-                GNUNET_i2s (&n->peer));
-#endif
-    GNUNET_assert (n->pitr == NULL);
-    n->pitr =
-        GNUNET_PEERINFO_iterate (peerinfo, &n->peer,
-                                 GNUNET_TIME_relative_multiply
-                                 (GNUNET_TIME_UNIT_SECONDS, 20),
-                                 &process_hello_retry_send_key, n);
+                "Trying to obtain public key for `%s'\n",
+                GNUNET_i2s (&kx->peer));
+    kx->pitr =
+        GNUNET_PEERINFO_iterate (peerinfo, &kx->peer,
+                                 GNUNET_TIME_UNIT_FOREVER_REL /* timeout? */ ,
+                                 &process_hello, kx);
     return;
   }
-  pos = n->encrypted_head;
-  while (pos != NULL)
-  {
-    if (GNUNET_YES == pos->is_setkey)
-    {
-      if (pos->sender_status == n->status)
-      {
-#if DEBUG_CORE
-        GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                    "`%s' message for `%4s' queued already\n", "SET_KEY",
-                    GNUNET_i2s (&n->peer));
-#endif
-        goto trigger_processing;
-      }
-      GNUNET_CONTAINER_DLL_remove (n->encrypted_head, n->encrypted_tail, pos);
-      GNUNET_free (pos);
-#if DEBUG_CORE
-      GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                  "Removing queued `%s' message for `%4s', will create a new one\n",
-                  "SET_KEY", GNUNET_i2s (&n->peer));
-#endif
-      break;
-    }
-    pos = pos->next;
-  }
 
   /* update status */
-  switch (n->status)
+  switch (kx->status)
   {
-  case PEER_STATE_DOWN:
-    n->status = PEER_STATE_KEY_SENT;
+  case KX_STATE_DOWN:
+    kx->status = KX_STATE_KEY_SENT;
+    /* setup SET KEY message */
+    setup_fresh_setkey (kx);
+    setup_fresh_ping (kx);
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop
+                              ("# SET_KEY and PING messages created"), 1,
+                              GNUNET_NO);
     break;
-  case PEER_STATE_KEY_SENT:
+  case KX_STATE_KEY_SENT:
     break;
-  case PEER_STATE_KEY_RECEIVED:
+  case KX_STATE_KEY_RECEIVED:
+    break;
+  case KX_STATE_UP:
+    GNUNET_break (0);
+    return;
+  case KX_STATE_REKEY:
+    kx->status = KX_STATE_REKEY_SENT;
+    /* setup fresh SET KEY message */
+    setup_fresh_setkey (kx);
+    setup_fresh_ping (kx);
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop
+                              ("# SET_KEY and PING messages created"), 1,
+                              GNUNET_NO);
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop
+                              ("# REKEY operations performed"), 1,
+                              GNUNET_NO);
     break;
-  case PEER_STATE_KEY_CONFIRMED:
+  case KX_STATE_REKEY_SENT:
     break;
   default:
     GNUNET_break (0);
-    break;
+    return;
   }
 
+  /* always update sender status in SET KEY message */
+  /* Not sending rekey sent state to be compatible with GNUnet 0.9.2 */
+  kx->skm.sender_status = htonl ((int32_t) ((kx->status == KX_STATE_REKEY_SENT) ? 
+                                           KX_STATE_KEY_RECEIVED : kx->status));  
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Sending SET_KEY and PING to `%s'\n",
+              GNUNET_i2s (&kx->peer));
+  GSC_NEIGHBOURS_transmit (&kx->peer, &kx->skm.header,
+                           kx->set_key_retry_frequency);
+  GSC_NEIGHBOURS_transmit (&kx->peer, &kx->ping.header,
+                           kx->set_key_retry_frequency);
+  kx->retry_set_key_task =
+      GNUNET_SCHEDULER_add_delayed (kx->set_key_retry_frequency,
+                                    &set_key_retry_task, kx);
+}
 
-  /* first, set key message */
-  me = GNUNET_malloc (sizeof (struct MessageEntry) +
-                      sizeof (struct SetKeyMessage) +
-                      sizeof (struct PingMessage));
-  me->deadline = GNUNET_TIME_relative_to_absolute (MAX_SET_KEY_DELAY);
-  me->priority = SET_KEY_PRIORITY;
-  me->size = sizeof (struct SetKeyMessage) + sizeof (struct PingMessage);
-  me->is_setkey = GNUNET_YES;
-  me->got_slack = GNUNET_YES;   /* do not defer this one! */
-  me->sender_status = n->status;
-  GNUNET_CONTAINER_DLL_insert_after (n->encrypted_head, n->encrypted_tail,
-                                     n->encrypted_tail, me);
-  sm = (struct SetKeyMessage *) &me[1];
-  sm->header.size = htons (sizeof (struct SetKeyMessage));
-  sm->header.type = htons (GNUNET_MESSAGE_TYPE_CORE_SET_KEY);
-  sm->sender_status =
-      htonl ((int32_t)
-             ((n->status ==
-               PEER_STATE_DOWN) ? PEER_STATE_KEY_SENT : n->status));
-  sm->purpose.size =
-      htonl (sizeof (struct GNUNET_CRYPTO_RsaSignaturePurpose) +
-             sizeof (struct GNUNET_TIME_AbsoluteNBO) +
-             sizeof (struct GNUNET_CRYPTO_RsaEncryptedData) +
-             sizeof (struct GNUNET_PeerIdentity));
-  sm->purpose.purpose = htonl (GNUNET_SIGNATURE_PURPOSE_SET_KEY);
-  sm->creation_time = GNUNET_TIME_absolute_hton (n->encrypt_key_created);
-  sm->target = n->peer;
-  GNUNET_assert (GNUNET_OK ==
-                 GNUNET_CRYPTO_rsa_encrypt (&n->encrypt_key,
-                                            sizeof (struct
-                                                    GNUNET_CRYPTO_AesSessionKey),
-                                            n->public_key, &sm->encrypted_key));
+
+/**
+ * Encrypt and transmit a message with the given payload.
+ *
+ * @param kx key exchange context
+ * @param payload payload of the message
+ * @param payload_size number of bytes in 'payload'
+ */
+void
+GSC_KX_encrypt_and_transmit (struct GSC_KeyExchangeInfo *kx,
+                             const void *payload, size_t payload_size)
+{
+  size_t used = payload_size + sizeof (struct EncryptedMessage);
+  char pbuf[used];              /* plaintext */
+  char cbuf[used];              /* ciphertext */
+  struct EncryptedMessage *em;  /* encrypted message */
+  struct EncryptedMessage *ph;  /* plaintext header */
+  struct GNUNET_CRYPTO_AesInitializationVector iv;
+  struct GNUNET_CRYPTO_AuthKey auth_key;
+
+  ph = (struct EncryptedMessage *) pbuf;
+  ph->iv_seed =
+      htonl (GNUNET_CRYPTO_random_u32
+             (GNUNET_CRYPTO_QUALITY_NONCE, UINT32_MAX));
+  ph->sequence_number = htonl (++kx->last_sequence_number_sent);
+  ph->reserved = GNUNET_BANDWIDTH_VALUE_MAX;
+  ph->timestamp = GNUNET_TIME_absolute_hton (GNUNET_TIME_absolute_get ());
+  memcpy (&ph[1], payload, payload_size);
+
+  em = (struct EncryptedMessage *) cbuf;
+  em->header.size = htons (used);
+  em->header.type = htons (GNUNET_MESSAGE_TYPE_CORE_ENCRYPTED_MESSAGE);
+  em->iv_seed = ph->iv_seed;
+  derive_iv (&iv, &kx->encrypt_key, ph->iv_seed, &kx->peer);
   GNUNET_assert (GNUNET_OK ==
-                 GNUNET_CRYPTO_rsa_sign (my_private_key, &sm->purpose,
-                                         &sm->signature));
-  pm = (struct PingMessage *) &sm[1];
-  pm->header.size = htons (sizeof (struct PingMessage));
-  pm->header.type = htons (GNUNET_MESSAGE_TYPE_CORE_PING);
-  pm->iv_seed =
-      GNUNET_CRYPTO_random_u32 (GNUNET_CRYPTO_QUALITY_NONCE, UINT32_MAX);
-  derive_iv (&iv, &n->encrypt_key, pm->iv_seed, &n->peer);
-  pp.challenge = n->ping_challenge;
-  pp.target = n->peer;
-#if DEBUG_HANDSHAKE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Encrypting `%s' and `%s' messages with challenge %u for `%4s' using key %u, IV %u (salt %u).\n",
-              "SET_KEY", "PING", (unsigned int) n->ping_challenge,
-              GNUNET_i2s (&n->peer), (unsigned int) n->encrypt_key.crc32,
-              GNUNET_CRYPTO_crc32_n (&iv, sizeof (iv)), pm->iv_seed);
-#endif
-  do_encrypt (n, &iv, &pp.target, &pm->target,
-              sizeof (struct PingMessage) - ((void *) &pm->target -
-                                             (void *) pm));
-  GNUNET_STATISTICS_update (stats,
-                            gettext_noop
-                            ("# SET_KEY and PING messages created"), 1,
-                            GNUNET_NO);
-#if DEBUG_CORE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-              "Have %llu ms left for `%s' transmission.\n",
-              (unsigned long long)
-              GNUNET_TIME_absolute_get_remaining (me->deadline).rel_value,
-              "SET_KEY");
-#endif
-trigger_processing:
-  /* trigger queue processing */
-  process_encrypted_neighbour_queue (n);
-  if ((n->status != PEER_STATE_KEY_CONFIRMED) &&
-      (GNUNET_SCHEDULER_NO_TASK == n->retry_set_key_task))
-    n->retry_set_key_task =
-        GNUNET_SCHEDULER_add_delayed (n->set_key_retry_frequency,
-                                      &set_key_retry_task, n);
+                 do_encrypt (kx, &iv, &ph->sequence_number,
+                             &em->sequence_number,
+                             used - ENCRYPTED_HEADER_SIZE));
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Encrypted %u bytes for %s\n",
+              used - ENCRYPTED_HEADER_SIZE, GNUNET_i2s (&kx->peer));
+  derive_auth_key (&auth_key, &kx->encrypt_key, ph->iv_seed,
+                   kx->encrypt_key_created);
+  GNUNET_CRYPTO_hmac (&auth_key, &em->sequence_number,
+                      used - ENCRYPTED_HEADER_SIZE, &em->hmac);
+  GSC_NEIGHBOURS_transmit (&kx->peer, &em->header,
+                           GNUNET_TIME_UNIT_FOREVER_REL);
 }
 
 
 /**
- * We received a SET_KEY message.  Validate and update
- * our key material and status.
- *
- * @param n the neighbour from which we received message m
- * @param m the set key message we received
- * @param ats performance data
- * @param ats_count number of entries in ats (excluding 0-termination)
+ * Closure for 'deliver_message'
  */
-static void
-handle_set_key (struct Neighbour *n, const struct SetKeyMessage *m,
-                const struct GNUNET_TRANSPORT_ATS_Information *ats,
-                uint32_t ats_count);
+struct DeliverMessageContext
+{
+
+  /**
+   * Performance information for the connection.
+   */
+  const struct GNUNET_ATS_Information *atsi;
+
+  /**
+   * Sender of the message.
+   */
+  const struct GNUNET_PeerIdentity *peer;
 
+  /**
+   * Number of entries in 'atsi' array.
+   */
+  uint32_t atsi_count;
+};
 
 
 /**
- * PEERINFO is giving us a HELLO for a peer.  Add the public key to
- * the neighbour's struct and retry handling the set_key message.  Or,
- * if we did not get a HELLO, just free the set key message.
+ * We received an encrypted message.  Decrypt, validate and
+ * pass on to the appropriate clients.
  *
- * @param cls pointer to the set key message
- * @param peer the peer for which this is the HELLO
- * @param hello HELLO message of that peer
- * @param err_msg NULL if successful, otherwise contains error message
+ * @param kx key exchange context for encrypting the message
+ * @param msg encrypted message
+ * @param atsi performance data
+ * @param atsi_count number of entries in ats (excluding 0-termination)
  */
-static void
-process_hello_retry_handle_set_key (void *cls,
-                                    const struct GNUNET_PeerIdentity *peer,
-                                    const struct GNUNET_HELLO_Message *hello,
-                                    const char *err_msg)
+void
+GSC_KX_handle_encrypted_message (struct GSC_KeyExchangeInfo *kx,
+                                 const struct GNUNET_MessageHeader *msg,
+                                 const struct GNUNET_ATS_Information *atsi,
+                                 uint32_t atsi_count)
 {
-  struct Neighbour *n = cls;
-  struct SetKeyMessage *sm = n->skm;
+  const struct EncryptedMessage *m;
+  struct EncryptedMessage *pt;  /* plaintext */
+  struct GNUNET_HashCode ph;
+  uint32_t snum;
+  struct GNUNET_TIME_Absolute t;
+  struct GNUNET_CRYPTO_AesInitializationVector iv;
+  struct GNUNET_CRYPTO_AuthKey auth_key;
+  struct DeliverMessageContext dmc;
+  uint16_t size = ntohs (msg->size);
+  char buf[size] GNUNET_ALIGN;
 
-  if (err_msg != NULL)
+  if (size <
+      sizeof (struct EncryptedMessage) + sizeof (struct GNUNET_MessageHeader))
   {
-    GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                _("Error in communication with PEERINFO service\n"));
-    /* return; */
+    GNUNET_break_op (0);
+    return;
   }
-
-  if (peer == NULL)
+  m = (const struct EncryptedMessage *) msg;
+  if ((kx->status != KX_STATE_KEY_RECEIVED) && (kx->status != KX_STATE_UP) &&
+      (kx->status != KX_STATE_REKEY_SENT) )
   {
-    n->skm = NULL;
-    n->pitr = NULL;
-    if (n->public_key != NULL)
-    {
-#if DEBUG_CORE
-      GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                  "Received `%s' for `%4s', continuing processing of `%s' message.\n",
-                  "HELLO", GNUNET_i2s (&n->peer), "SET_KEY");
-#endif
-      handle_set_key (n, sm, NULL, 0);
-    }
-    else
-    {
-      GNUNET_log (GNUNET_ERROR_TYPE_DEBUG,
-                  _
-                  ("Ignoring `%s' message due to lack of public key for peer `%4s' (failed to obtain one).\n"),
-                  "SET_KEY", GNUNET_i2s (&n->peer));
-    }
-    GNUNET_free (sm);
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop
+                              ("# failed to decrypt message (no session key)"),
+                              1, GNUNET_NO);
     return;
   }
-  if (n->public_key != NULL)
-    return;                     /* multiple HELLOs match!? */
-  n->public_key =
-      GNUNET_malloc (sizeof (struct GNUNET_CRYPTO_RsaPublicKeyBinaryEncoded));
-  if (GNUNET_OK != GNUNET_HELLO_get_key (hello, n->public_key))
+  if (KX_STATE_KEY_RECEIVED == kx->status)
+  {
+    /* defer */
+    GNUNET_free_non_null (kx->emsg_received);
+    kx->emsg_received = (struct EncryptedMessage *) GNUNET_copy_message (msg);
+    return;
+  }
+  /* validate hash */
+  derive_auth_key (&auth_key, &kx->decrypt_key, m->iv_seed,
+                   kx->decrypt_key_created);
+  GNUNET_CRYPTO_hmac (&auth_key, &m->sequence_number,
+                      size - ENCRYPTED_HEADER_SIZE, &ph);
+  if (0 != memcmp (&ph, &m->hmac, sizeof (struct GNUNET_HashCode)))
   {
+    /* checksum failed */
     GNUNET_break_op (0);
-    GNUNET_free (n->public_key);
-    n->public_key = NULL;
+    return;
   }
-}
-
-
+  derive_iv (&iv, &kx->decrypt_key, m->iv_seed, &GSC_my_identity);
+  /* decrypt */
+  if (GNUNET_OK !=
+      do_decrypt (kx, &iv, &m->sequence_number, &buf[ENCRYPTED_HEADER_SIZE],
+                  size - ENCRYPTED_HEADER_SIZE))
+    return;
+  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Decrypted %u bytes from %s\n",
+              size - ENCRYPTED_HEADER_SIZE, GNUNET_i2s (&kx->peer));
+  pt = (struct EncryptedMessage *) buf;
 
-/**
- * Task that will retry "send_key" if our previous attempt failed
- * to yield a PONG.
- */
-static void
-set_key_retry_task (void *cls, const struct GNUNET_SCHEDULER_TaskContext *tc)
-{
-  struct Neighbour *n = cls;
+  /* validate sequence number */
+  snum = ntohl (pt->sequence_number);
+  if (kx->last_sequence_number_received == snum)
+  {
+    GNUNET_log (GNUNET_ERROR_TYPE_INFO,
+                "Received duplicate message, ignoring.\n");
+    /* duplicate, ignore */
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop ("# bytes dropped (duplicates)"),
+                              size, GNUNET_NO);
+    return;
+  }
+  if ((kx->last_sequence_number_received > snum) &&
+      (kx->last_sequence_number_received - snum > 32))
+  {
+    GNUNET_log (GNUNET_ERROR_TYPE_INFO,
+                "Received ancient out of sequence message, ignoring.\n");
+    /* ancient out of sequence, ignore */
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop
+                              ("# bytes dropped (out of sequence)"), size,
+                              GNUNET_NO);
+    return;
+  }
+  if (kx->last_sequence_number_received > snum)
+  {
+    unsigned int rotbit = 1 << (kx->last_sequence_number_received - snum - 1);
 
-#if DEBUG_CORE
-  GNUNET_log (GNUNET_ERROR_TYPE_DEBUG, "Retrying key transmission to `%4s'\n",
-              GNUNET_i2s (&n->peer));
-#endif
-  n->retry_set_key_task = GNUNET_SCHEDULER_NO_TASK;
-  n->set_key_retry_frequency =
-      GNUNET_TIME_relative_multiply (n->set_key_retry_frequency, 2);
-  send_key (n);
-}
+    if ((kx->last_packets_bitmap & rotbit) != 0)
+    {
+      GNUNET_log (GNUNET_ERROR_TYPE_INFO,
+                  "Received duplicate message, ignoring.\n");
+      GNUNET_STATISTICS_update (GSC_stats,
+                                gettext_noop ("# bytes dropped (duplicates)"),
+                                size, GNUNET_NO);
+      /* duplicate, ignore */
+      return;
+    }
+    kx->last_packets_bitmap |= rotbit;
+  }
+  if (kx->last_sequence_number_received < snum)
+  {
+    unsigned int shift = (snum - kx->last_sequence_number_received);
 
+    if (shift >= 8 * sizeof (kx->last_packets_bitmap))
+      kx->last_packets_bitmap = 0;
+    else
+      kx->last_packets_bitmap <<= shift;
+    kx->last_sequence_number_received = snum;
+  }
 
-struct GSC_KeyExchangeInfo *
-GSC_KX_start (const struct GNUNET_PeerIdentity *pid)
-{
-  struct GSC_KeyExchangeInfo *kx;
+  /* check timestamp */
+  t = GNUNET_TIME_absolute_ntoh (pt->timestamp);
+  if (GNUNET_TIME_absolute_get_duration (t).rel_value >
+      MAX_MESSAGE_AGE.rel_value)
+  {
+    GNUNET_log (GNUNET_ERROR_TYPE_INFO,
+                _("Message received far too old (%llu ms). Content ignored.\n"),
+                GNUNET_TIME_absolute_get_duration (t).rel_value);
+    GNUNET_STATISTICS_update (GSC_stats,
+                              gettext_noop
+                              ("# bytes dropped (ancient message)"), size,
+                              GNUNET_NO);
+    return;
+  }
 
-  kx = NULL;
-  return kx;
+  /* process decrypted message(s) */
+  update_timeout (kx);
+  GNUNET_STATISTICS_update (GSC_stats,
+                            gettext_noop ("# bytes of payload decrypted"),
+                            size - sizeof (struct EncryptedMessage), GNUNET_NO);
+  dmc.atsi = atsi;
+  dmc.atsi_count = atsi_count;
+  dmc.peer = &kx->peer;
+  if (GNUNET_OK !=
+      GNUNET_SERVER_mst_receive (mst, &dmc,
+                                 &buf[sizeof (struct EncryptedMessage)],
+                                 size - sizeof (struct EncryptedMessage),
+                                 GNUNET_YES, GNUNET_NO))
+    GNUNET_break_op (0);
 }
 
 
-void
-GSC_KX_stop (struct GSC_KeyExchangeInfo *kx)
+/**
+ * Deliver P2P message to interested clients.
+ * Invokes send twice, once for clients that want the full message, and once
+ * for clients that only want the header
+ *
+ * @param cls always NULL
+ * @param client who sent us the message (struct GSC_KeyExchangeInfo)
+ * @param m the message
+ */
+static int
+deliver_message (void *cls, void *client, const struct GNUNET_MessageHeader *m)
 {
-  if (kx->pitr != NULL)
+  struct DeliverMessageContext *dmc = client;
+
+  switch (ntohs (m->type))
   {
-    GNUNET_PEERINFO_iterate_cancel (kx->pitr);
-    kx->pitr = NULL;
+  case GNUNET_MESSAGE_TYPE_CORE_BINARY_TYPE_MAP:
+  case GNUNET_MESSAGE_TYPE_CORE_COMPRESSED_TYPE_MAP:
+    GSC_SESSIONS_set_typemap (dmc->peer, m);
+    return GNUNET_OK;
+  default:
+    GSC_CLIENTS_deliver_message (dmc->peer, dmc->atsi, dmc->atsi_count, m,
+                                 ntohs (m->size),
+                                 GNUNET_CORE_OPTION_SEND_FULL_INBOUND);
+    GSC_CLIENTS_deliver_message (dmc->peer, dmc->atsi, dmc->atsi_count, m,
+                                 sizeof (struct GNUNET_MessageHeader),
+                                 GNUNET_CORE_OPTION_SEND_HDR_INBOUND);
   }
-  if (kx->retry_set_key_task != GNUNET_SCHEDULER_NO_TASK)
-    GNUNET_SCHEDULER_cancel (kx->retry_set_key_task);
-  GNUNET_free_non_null (kx->public_key);
-  GNUNET_free (kx);
+  return GNUNET_OK;
 }
 
 
-int 
+/**
+ * Initialize KX subsystem.
+ *
+ * @return GNUNET_OK on success, GNUNET_SYSERR on failure
+ */
+int
 GSC_KX_init ()
 {
-  peerinfo = GNUNET_PEERINFO_connect (cfg);
+  char *keyfile;
+
+  if (GNUNET_OK !=
+      GNUNET_CONFIGURATION_get_value_filename (GSC_cfg, "GNUNETD", "HOSTKEY",
+                                               &keyfile))
+  {
+    GNUNET_log (GNUNET_ERROR_TYPE_ERROR,
+                _
+                ("Core service is lacking HOSTKEY configuration setting.  Exiting.\n"));
+    return GNUNET_SYSERR;
+  }
+  my_private_key = GNUNET_CRYPTO_rsa_key_create_from_file (keyfile);
+  GNUNET_free (keyfile);
+  if (NULL == my_private_key)
+  {
+    GNUNET_log (GNUNET_ERROR_TYPE_ERROR,
+                _("Core service could not access hostkey.  Exiting.\n"));
+    return GNUNET_SYSERR;
+  }
+  GNUNET_CRYPTO_rsa_key_get_public (my_private_key, &my_public_key);
+  GNUNET_CRYPTO_hash (&my_public_key, sizeof (my_public_key),
+                      &GSC_my_identity.hashPubKey);
+  peerinfo = GNUNET_PEERINFO_connect (GSC_cfg);
   if (NULL == peerinfo)
   {
     GNUNET_log (GNUNET_ERROR_TYPE_ERROR,
                 _("Could not access PEERINFO service.  Exiting.\n"));
+    GNUNET_CRYPTO_rsa_key_free (my_private_key);
+    my_private_key = NULL;
     return GNUNET_SYSERR;
   }
+  mst = GNUNET_SERVER_mst_create (&deliver_message, NULL);
   return GNUNET_OK;
 }
 
 
-void 
+/**
+ * Shutdown KX subsystem.
+ */
+void
 GSC_KX_done ()
 {
-  if (peerinfo != NULL)
-    {
-      GNUNET_PEERINFO_disconnect (peerinfo);
-      peerinfo = NULL;
-    }
-
+  if (NULL != my_private_key)
+  {
+    GNUNET_CRYPTO_rsa_key_free (my_private_key);
+    my_private_key = NULL;
+  }
+  if (NULL != peerinfo)
+  {
+    GNUNET_PEERINFO_disconnect (peerinfo);
+    peerinfo = NULL;
+  }
+  if (NULL != mst)
+  {
+    GNUNET_SERVER_mst_destroy (mst);
+    mst = NULL;
+  }
 }
+
+/* end of gnunet-service-core_kx.c */