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http://arstechnica.com/gaming/news/2011/01/sony-releases-new-ps3-firmware-hackers-shrug-and-crack-it.ars
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I'm not sure what the protocol is, AES I believe.
http://wololo.net/talk/viewtopic.php?f=5&t=1381
In this forum thread it's basically the top PSP hackers chatting it up and reversing the Kirk hardware encryption chip and the algorithm. If you want the specifics it should be in that.
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