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The Blum-Micali algorithm is used as a pseudo random generator in cryptography. The algorithm gets its security from the difficulty of computing discrete logarithms.[1]
It can be used to set bits since the output of the generator is either 0 or 1.
In order for this generator to be secure, the prime number p needs to be large enough so that computing discrete logarithms is infeasible.[1]
References
^ abBruce Schneier, Applied Cryptography: Protocols, Algorithms, and Source Code in C, pages 416-417, Wiley; 2nd edition (October 18, 1996), ISBN 0471117099