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You are correct. The $Update$ function is called after each invocation of the $Generate$ function, and this does mean that chunking affects the output. Changing both the key and the nonce of an $AES-CTR$ key stream generator to uniformly selected (pseudo) random values will, of course, make the resulting key stream uniformly independent from what it would ...


CTR consists of two parts: construction the key stream using a counter, and XOR-ing the output of the key stream with the plaintext/ciphertext. The key stream can be generated using a PRF, in which case it is of course not invertible. The key stream can also be created using a PRP (e.g. a block cipher like AES) in which case it is invertible. As indicated, ...

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