Abstract: This is a cipher system for enciphering a stream of binary data by means of a product cipher. A clear message represented in a binary data format is transformed into a cipher message by operating on each bit of clear information with a complex modulo-two addition function. This function is dependent on previous internal cipher digits transmitted and varies for each message bit processed. The function is developed by continually shifting a key matrix under the control of a varying control matrix. The control matrix is formed from the sub-product of the complex function developed in generating each cipher bit.