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If in a public WLAN WPA2-PSK is used, but the PSK is more or less publicly available, does this mean that an attacker with that PSK can easily decrypt wlan traffic from/to other clients of that WLAN?

Or does WPA2 negotiate sort of a per-client encryption key, so that while an intruder can access the WLAN, he's still not able to decrypt the other clients' traffic?

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Welcome to Cryptography Stack Exchange! As I understand, your question relates to a specific way of using the WPA2 protocol, not some specific implementation of it (at least you didn't name any), so I think it is appropriate here. I'm retagging your question with more appropriate tags, though. –  Paŭlo Ebermann Oct 29 '11 at 23:11
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Curiously, the answer is »Yes« to both questions.

Each client (STA) establishes a different pairwise transient key (PTK) with the access point (AP) for each session, but this PTK is derived from the pairwise master key (PMK). And if you are using a pre-shared key (PSK, usually derived from a password entered by the users), this PSK is used as the PMK.

The derivation of the PTK uses a pair of nonce values sent by both STA and AP in clear text as the first two steps of a 4-way handshake, as well as their MAC addresses (which are public anyway) and the PMK (all hashed together with a hash function).

So, listening on those first two handshake messages and knowing the PSK allows an attacker to listen to any messages between AP and STA, as well as impersonate one or both to do a man-in-the-middle attack.

The standard IEEE 802.11-2007 contains a note about this (page 190, in the PDF on page 239):

NOTE—When an ESS uses PSKs, STAs negotiate a pairwise cipher. However, any STA in the ESS can derive the pairwise keys of any other that uses the same PSK by capturing the first two messages of the 4-Way Handshake. This provides malicious insiders with the ability to eavesdrop as well as the ability to establish a man-in-the-middle attack.

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Thanks very much for your detailed answer. So enabling WPA2-PSK in this scenario would increase the security 'somewhat', in that an attacker can eavesdrop traffic only if he manages to capture the handshake between any STA and AP. –  Bachi Oct 30 '11 at 11:44
    
Yes, exactly. I'm not sure how often such handshakes happen, though. –  Paŭlo Ebermann Oct 30 '11 at 13:25
    
+1 for the good and explanation and the "curiosly" in the first sentence. –  woliveirajr Nov 10 '11 at 12:05
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Is there a way the attacker can cause such a handshake to happen? If he simply blocks the signal for a while, will this handshake be re-done? –  MartinSuecia Mar 29 '12 at 9:52
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