Will PS3 hacking without a USB dongle finally become a reality?

Some interesting news is beginning to filter out of the 27C3 (Chaos Communication Congress) Hacker Conference 2010 for owners of the PlayStation 3. It turns out that those who are stuck with expensive and now-useless PS3 USB hacks purchased to run homebrew software and backups on their consoles may be getting a bit of a New Year’s surprise.

Hacking blog Dukio is reporting that a solution to jailbreak and downgrade the PS3 without the use of a USB dongle may now be a reality.

Fail0verflow, a group who is referring to themselves as “a bunch of curious hackers”, put on a demonstration at the 27C3 conference today showing how the discoverer of Sony’s ECDSA code, the PS3 “official signature key”, can be used to allow anyone to sign executable files and run them on any retail PS3 console, undetected.

A more in-depth demonstration of the groups findings is scheduled to take place at the conference tomorrow, but here’s a few nuggets of information we’ve gathered so far:

• The hack will use AsbestOS.PUP, Hector Martin’s custom Linux bootloader.
• The cracked keys are signature keys, NOT encryption keys, which are not easily changed by Sony because it will cause games to stop working.
• The group does not plan to work long-term on the solution, but rather will leak the tools to allow others to develop.
• Though the presentation is occurring tomorrow, the final solution and the fail0verflow website likely will not yet be available tomorrow, per the groups tweets.

PS3News.com has some in-depth highlights of the presentation from the 27C3 conference which goes much further into the technical details of this emerging hack.

Obviously, details are a still bit hazy at this point, but if today’s preview is any indication, Sony’s lawyers are probably not going to have a happy new year.