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When I worked with people who wrote hardware crypto for a living, the book they recommended was Brush Schneier's Applied Cryptography [1]. It's __excellent__. It's the best technical book I've ever read. It's more readable than the Perl cookbook.

The first third (half?) of the book is devoted to explaining (not with code) the various complex interactions between parties who need to trust one another -- lots of stuff on key exchange, and then only later on the different types of ciphers (block vs stream ciphers). The examples are clear and well-written, and VERY memorable. Bruce explains very well what the pitfalls are in each scenario, and all the ways in which malicious attackers can try to break your trust.

The second half of the book is implementation of most of the algorithms in C.

Other books may cover the topic be better, but I haven't read them. (Sorry.) I like that Applied Cryptography gives a good noob-friendly introduction, and builds from there, yet also has depth and source code.

1: http://www.amazon.com/Applied-Cryptography-Protocols-Algorit...

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