Panama (cryptography)

Panama is a cryptographic hash function and stream cipher designed by Joan Daemen and Craig Clapp in 1998. It is based on a large internal state and operates in two phases: a buffering phase and a squeezing phase. Panama was intended to be efficient in hardware and software implementations.

The core of Panama is a large internal state, consisting of 17 32-bit words (544 bits). The algorithm operates by absorbing input blocks during the buffering phase. The input is XORed into a portion of the state, and then a round function, called "Step," is applied. The Step function is a highly non-linear transformation designed to provide strong diffusion and confusion.

After absorbing all of the input, the algorithm enters the squeezing phase. During this phase, the algorithm outputs a stream of pseudorandom bits, which can be used for hashing or encryption. The output is generated by XORing portions of the internal state together. The Step function is also applied during the squeezing phase to ensure continued mixing of the internal state.

Panama utilizes a technique called a "feed-forward" mechanism. During the buffering phase, parts of the internal state are XORed back into themselves after several rounds, contributing to its resistance against certain attacks.

While Panama offered interesting design principles, it has been found to have certain weaknesses and is not considered a modern standard for cryptographic hash functions or stream ciphers. More modern and secure algorithms, such as the SHA-3 family and ChaCha20, are generally preferred. Despite its vulnerabilities, Panama served as an influence on later cryptographic designs.