diff --git a/docs/global.rst.inc b/docs/global.rst.inc
index 694f4d9..15f38ea 100644
--- a/docs/global.rst.inc
+++ b/docs/global.rst.inc
@@ -12,6 +12,10 @@
 .. _github: https://github.com/jborg/attic
 .. _OpenSSL: https://www.openssl.org/
 .. _Python: http://www.python.org/
+.. _PBKDF2: https://en.wikipedia.org/wiki/PBKDF2
+.. _SHA256: https://en.wikipedia.org/wiki/SHA-256
+.. _HMAC: https://en.wikipedia.org/wiki/HMAC
+.. _msgpack: http://msgpack.org/
 .. _`msgpack-python`: https://pypi.python.org/pypi/msgpack-python/
 .. _llfuse: https://pypi.python.org/pypi/llfuse/
 .. _homebrew: http://mxcl.github.io/homebrew/
diff --git a/docs/internals.rst b/docs/internals.rst
new file mode 100644
index 0000000..c255487
--- /dev/null
+++ b/docs/internals.rst
@@ -0,0 +1,69 @@
+.. include:: global.rst.inc
+.. _internals:
+
+Internals
+=========
+
+
+Key files
+---------
+
+When initialized with the ``init -e keyfile`` command, |project_name|
+needs an associated file in ``$HOME/.attic/keys`` to read and write
+the repository. As with most crypto code in |project_name|, the format
+of those files is defined in `attic/key.py`_.  The format is based on
+msgpack_, base64 encoding and PBKDF2_ SHA256 encryption, which is
+then encoded again in a msgpack_.
+
+The internal data structure is as follows:
+
+version
+  currently always an integer, 1
+
+repository_id
+  the ``id`` field in the ``config`` ``INI`` file of the repository.
+
+enc_key
+  the AES encryption key
+  
+enc_hmac_key
+  the HMAC key (32 bytes)
+
+id_key
+  another HMAC key? unclear.
+
+chunk_seed
+  unknown
+
+Those fields are encoded using msgpack_. The utf-8-encoded phassphrase
+is encrypted with a PBKDF2_ and SHA256_ using 100000 iterations and a
+random 32 bytes salt to give us a derived key. The derived key is 32
+bytes long.  A HMAC_ SHA256_ checksum of the above fields is generated
+with the derived key, then the derived key is also used to encrypt the
+above pack of fields. Then the result is stored in a another msgpack_
+formatted as follows:
+
+version
+  currently always an integer, 1
+
+salt
+  random 32 bytes salt used to encrypt the passphrase
+
+iterations
+  number of iterations used to encrypt the passphrase
+
+algorithm
+  the hashing algorithm used to encrypt the passphrase and do the HMAC
+  checksum
+
+hash
+  the HMAC checksum of the encrypted passphrase key
+
+data
+  the passphrase key, encrypted with AES over a PBKDF2_ SHA256 hash
+  described above
+
+The resulting msgpack_ is then encoded using base64 and written to the
+key file, wrapped using the textwrap_ module with a header. The header
+is a single line with the string ``ATTIC_KEY``, a space and a
+hexadecimal representation of the repository id.