In November 2007 I called these three CAPTCHA implementations “unbreakable”:

Google
(unbreakable)
captcha-decoder-7.png
Hotmail
(unbreakable)
captcha-decoder-8.png
Yahoo
(unbreakable)
captcha-decoder-9.png

2008 is shaping up to be a very bad year indeed for CAPTCHAs:

Which means I am now 0 for 3. Understand that I am no fan of CAPTCHA. I view them as a necessary and important evil, one of precious few things separating average internet users from a torrential deluge of email, comment, and forum spam.

So reading that the three best CAPTCHA implementations have been
defeated sort of breaks my heart. Even what I consider to be the
strongest, Google’s implementation, fell hard:

On average, only 1 in every 5 CAPTCHA breaking requests are
successfully including both algorithms used by the bot, approximating a
success rate of 20%.

A twenty percent success rate doesn’t sound like much, but these
spammers are harnessing networks of compromised PCs to send out
thousands upon thousands of simultaenous sign-up requests to GMail,
Hotmail, and Yahoo Mail from computers all over the world. Even a five percent
success rate against a particular email service CAPTCHA would be cause
for serious concern; with twenty percent success rate you might as well
put a fork in that thing– it’s done.

In the meantime, CAPTCHA still serves a useful purpose– speed
bumps that prevent evil bots and the nefarious people who run them from
completely overrunning the internet, as Gunter Ollman notes:

CAPTCHAs were a good idea, but frankly, in today’s profit-motivated
attack environment they have largely become irrelevant as a protection
technology. Yes, the CAPTCHAs can be made stronger, but they are
already too advanced for a large percentage of Internet users.
Personally, I don’t think it’s really worth strengthening the
algorithms used to create more complex CAPTCHAs – instead, just
deploy them as a small “speed-bump” to stop the script-kiddies and
their unsophisticated automated attack tools. CAPTCHAs aren’t the right
tool for stopping today’s commercially minded attackers.

There’s simply too much money to be made in email spam for the
commercial CAPTCHA algorithms, regardless of how good they may be, to
survive forever. How old is Google’s CAPTCHA now? Two to three years
old? In the short term, perhaps proliferation and evolution of many different CAPTCHA techniques is the most effective prevention. You should emulate
the techniques from the most effective and human-readable industrial
grade commercial CAPTCHA, but avoid copying them outright. Otherwise,
when they’re inevitably broken, you’re broken too. CAPTCHA defeating
tools are tailored to very specific inputs; if there’s little to no
monetary incentive, odds are nobody will bother to customize one for
yours. My ridiculously simple “orange” comment form protection is ample
evidence of that.

Beyond diversification, the deeper question remains: how do we tell automated bots from people– without alienating our users in the process? How can we build a next generation CAPTCHA that’s less vulnerable to attack?

Here’s some food for thought:

At some point, unfortunately, CAPTCHA devolves from a simple human
reading test into an intelligence test or an acuity test. Depending on
how invasive you want to be, you’ll eventually be forced to move to two-factor authentication, like sending a text message to someone’s cell phone with a temporary key.

I don’t have the all answers, but one thing is for sure: I hate
spammers. As fellow spam-hating internet users we all have a vested
interest in seeing CAPTCHA techniques evolve to defeat spammers.

http://www.codinghorror.com/blog/archives/001067.html