Now, suppose a person named Clara takes Steve‘s public key, she can use ES to encrypt data so only he can decrypt it (using DV). Then, she can send said encrypted data through insecure mediums like her gossipy aunt Irene. All Irene knows is that encrypted gibberish is passing between them, not what the contents are.
Now here’s the ploy, Clara‘s “friend” Eve wants to know what Clara‘s saying to Steve. She sets up a simple trick: She’ll stand in the middle. She’ll tell Clara (via Irene, who believes her to be Steve (false ID or something, I don’t know how for this analogy)) that Steve‘s public key has changed, or perhaps some other kind of trickery that makes Clara accept the new key. The catch here is that it hasn’t actually changed. Eve‘s made her own, and she tells Clara the new one, and then Clara starts using that new one. Clara sends messages encrypted using Eve‘s public key to Eve who takes these messages, runs DV, and then ES using Steve‘s real public key, and sends them on to him.
The whole while, Clara still thinks she’s talking to Steve directly, and Steve thinks he’s getting messages from Clara directly, and they have no way to verify otherwise.
Now lets imagine Clara and Steve are smart, and knew this might happen.
They ask their friend Andrew to help out. He makes his own set of keys, gives his public one to Clara, and the following goes down.
Clara asks Steve for his public key. Steve had, the other day, sent it to Andrew, who signed it with ES, verifying Steve‘s control/ownership. Steve sends it and the signature to Clara, who uses DV and Andrew‘s public key to verify that Steve actually has that key, because Andrew‘s private key signed it.
Andrew is a trusted third party, saying that yes, that public key belongs to Steve.
Now, if Eve wants to be a woMan in the Middle (MITM), she has to get Andrew to sign her key, but Andrew is loyal and won’t do that.
Unfortunately, Eve has some dirt on Andrew: He’s been sleeping around/stealing/doing something illegal or immoral! If word of that got out he’d be doomed. So what’s he do? He signs Eve‘s public key OR gives her his private key. The same as above happens, Eve is in the middle, Clara and Steve are none the wiser.
If, by any chance, you got this far after that mess, here’s the key:
Clara and Steve are the Client and the Server.
Irene is the Internet, insecure and compromised, every byte traveling its wires and networks overheard.
Eve is the Eavesdropper, the NSA.
Andrew is the Certificate Authority, trusted, but probably compromised.
It really is that simple. If the NSA has the Certificate Authorities private key, they can make fake certificates (public keys) and sign them (ES) all day long, send them all around, and no one would be any bit the wiser.
It’s a trust system, assuming that Andrew is not compromised. If he is (he almost certainly is) and they bothered to run some simple software that runs on hardware as simple as that in mobile phones (meaning it’s easy stuff, you don’t need supercomputers to do it and if you happen to have supercomputers on hand, this is just a trivial, spare dealio to run in the background) then you can bet your ass all of HTTPS is compromised and is totally useless.