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I have heard about ciphers that have a block length of 256 megabytes... That is huge. How well are they understood by the encryption community? I'm referring to PMC Ciphers.

Has anyone used such a cipher in a real world application?

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It's easy to construct a large block blockcipher from a normal block cipher with a factor 2 performance hit. So I see little reason to use dedicated large block blockciphers. –  CodesInChaos May 30 '13 at 11:01
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The website you linked is certainly full of bullshit. A 256 bit block and 256 bit key is certainly enough for almost everything. –  CodesInChaos May 30 '13 at 11:02
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This website sure looks dodgy. They push large blocks as an advantage without ever giving a reason. They declare that being able to use low-end devices is a downside (it's a downside for password hashing, which isn't what ciphers are for). They demonstrate the insecurity of ECB mode and claim that the underlying cipher is the problem. Their papers aren't peer-reviewed and somehow they claim it as an advantage. All in all, that's a load of snake oil. –  Gilles May 30 '13 at 12:25
    
in that image comparison (encrypting a 6 bit grayscale with large patches of same color) is very skewed against AES by using ECB, the PDF only mentions CBC as an afterthought –  ratchet freak May 30 '13 at 12:56
    
Apparently encryption primitives derived from PRP's must use padding as they have a fixed block size (??). Stopped reading there. Snake oil and the author is clueless. –  Thomas Jun 8 '13 at 10:11
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