Wow, thank goodness this bug is invalid.  The original poster, with all
due respect, was simply ignorant of how things are supposed to work.
Remember the Debian SSL bug?  That was due to some code maintainer who
thought he knew more than the crypto coders.  As a result he broke
thousands of keys across the Internet and severely embarrassed the
Debian developers.

People have already given you solutions:

1) Generate the key on a device that has a mouse and keyboard and then
transfer the key to the other device.

2) Go buy yourself a hardware RNG like the entropy key.  It is cheap and
fits into any USB slot.

3) Go download HAVEGED from the repository.  It likely gives "good
enough" randomness and will keep your random pool full at all times.
However, since it hasn't been well studied, use this only as a last
resort! (It was developed by PhD's, so it's probably good enough, but it
still needs peer review).

If you can't do either of those then you shouldn't be generating keys on
the device.  There was a recent study that collected millions of keys
across the internet and found that many thousands of them were easily
broken.  Why?  Because they were generated with crappy entropy (and
mostly generated on devices like routers, vpn's,  etc.)  Is this what
you want?  An easily broken key?

If your system doesn't have any inputs or you have no way of generating
entropy, that's *your* problem to figure out.  Don't go suggesting that
Ubuntu should make us all insecure because of you.  Again, if you don't
have a keyboard or mouse hooked up to the machine, go find a machine
with them and generate the keys there.  If the machine is remote, then
simply generate the keys locally (with a strong password) and then send
them over the wire to the remote machine.  This should not present any
security issues since the private key is itself encrypted.

Bottom line:  the GnuPG RNG is working as it is *supposed* to work.  If
it didn't work the way it did I would not use it.  This is *not* a bug
with Ubuntu and it's not a bug with GnuPG.  Also rng-tools is *not*
meant to be used unless you have a hardware TRNG, so it is working as
intended as well. Whoever suggested pointing it at /dev/urandom is a
complete amateur at cryptography and should be ignored.  There's a lot
of people out there who just don't know what they're talking about when
it comes to crypto and they should be ignored just as much as this bug
report should be ignored.

@JoePete

There are no processes on an OS that are sufficient for entropy
gathering *besides* keyboard, mouse and disk movements (and even they
have problems, but are probably good enough).  So what the developers
are doing now *is* sound development practice.  They don't need amateurs
trying to tell them how to do crypto.

I think part of the problem with people trying to get entropy from disk
seeks is they don't understand how /dev/random works.  It estimates the
entropy before it hashes it and outputs it.  Since disk seeks have much
less entropy than say a random mouse or keyboard input, this is why it
takes forever to generate any output.  /dev/random is designed with
entropy measurement in mind and it simply wont output anything if the
entropy estimates are not up to par.  Disk seeks are obviously pretty
bad for generating entropy or else the output would be faster.  It is
what it is.  Security should *always* trump speed in situations like
this.

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https://bugs.launchpad.net/bugs/706011

Title:
  gpg --key-gen doesn't have enough entropy and rng-tools install/start
  fails

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