What Is Encryption and How Does It Work?

What Is Encryption?

Encryption is a method of securing digital data that involves the use of one or more mathematical procedures, as well as a password or “key” to decrypt the data. The encryption procedure converts data using an algorithm that renders the original data unreadable.

For example, the process can convert plaintext into ciphertext, which is an alternative form of plaintext. When an authorized user needs to read the data, they can use a binary key to decrypt it. The ciphertext will be converted back to plaintext, allowing the authorized user to view the original data.

Encryption is an important technique for individuals and corporations to safeguard sensitive information from attack. Websites that transmit credit card and bank account numbers, for example, should always encrypt this data.

The mathematical study and application of encryption are known as cryptography.

KEY TAKEAWAYS

  • Encryption is a means of securing data by encoding it mathematically such that it can only be read, or decrypted, by those with the correct key or cipher.
  • Digital encryption processes translate data using an algorithm that makes the original information unreadable except for authorized users.
  • Encryption is crucial in a digitally-connected world to keep private information, messages, and financial transactions private and secure.

How Encryption Works:

Encryption strength depends on the length of the encryption security key. Web developers in the latter half of the twentieth century used either 40-bit or 56-bit encryption, which is a key with 240 possible permutations.

However, by the end of the century, hackers could break those keys through brute-force attacks. This led to a 128-bit system as the standard encryption length for web browsers.

The Advanced Encryption Standard (AES) is a protocol for data encryption created in 2001 by the U.S. National Institute of Standards and Technology. AES uses a 128-bit block size, and key lengths of 128, 192, and 256 bits.

AES uses a symmetric-key algorithm. This means that the same key is used for both encrypting and decrypting the data. Asymmetric-key algorithms use different keys for the encryption and decryption processes.

Today, 128-bit encryption is standard, but most banks, militaries, and governments use 256-bit encryption. Encryption underlies the security and functionality of decentralized cryptocurrencies, such as Bitcoin.

Example of Encryption

In May 2018, the Wall Street Journal reported that, despite the importance and accessibility of encryption, many corporations still fail to encrypt sensitive data.

By some estimates, companies encrypted only one-third of all sensitive corporate data in 2016—leaving the remaining two-thirds sensitive to theft or fraud.

Encryption makes it more difficult for a company to analyze its own data using either standard means or artificial intelligence.

And being able to analyze data quickly can sometimes mean the difference between which of two competing companies gains a market advantage; this partly explains why companies resist encrypting data.

Consumers should be aware that data encryption does not always guarantee data security. In 2013, for example, hackers broke into Target Corporation and stole the information of up to 40 million credit cards.

The credit card information was encrypted, according to Target, but the hackers’ expertise broke past the encryption. This hack was one of the most significant in US history, prompting a joint investigation by the Secret Service and the Justice Department.

General Methods of Encryption

Encryption can be done in a variety of ways. Symmetric Encryption Cryptography is the first of these. It encrypts the raw message at the source, sends the encrypted message to the recipient, and then decrypts the message at the destination using the same secret key.

A simple example is to represent alphabets with numbers, such as “A” being “01,” “B” being “02,” and so on. A message such as “HELLO” will be encoded as “0805121215,” and this value will be sent to the recipient across the network (s).

When the message is received, the recipient will decrypt it using the same reverse methodology – “08” equals “H,” “05” equals “E,” and so on – to obtain the original message value of “HELLO.” It will be of no use to unauthorized people if they receive the encrypted message “0805121215.”

The above is one of the simplest examples of symmetric encryption, but many complex variations exist for enhanced security. This method offers advantages of simple implementation with minimum operational overhead but suffers from issues of security of shared key and problems of scalability.

The second way is Asymmetric Encryption Cryptography, which encrypts and decrypts data using two separate keys—one public and one private. The public key, like the fund receiver’s address, can be shared widely, whereas the private key is known only by the owner.

A person can encrypt a message using the receiver’s public key, but only the receiver’s private key can decrypt it in this fashion. This technology aids in the authentication and encryption of bitcoin transactions, which are both critical tasks.

The former is accomplished because the public key checks the paired private key for the message’s actual sender, while the latter is achieved because only the paired private key holder can successfully decrypt the encrypted message.

Hashing is a third cryptographic method that is used to quickly check the integrity of data in network transactions or to compare the fidelity of material copied or downloaded to the original. Hash functions take variable-length inputs and return outputs of a fixed length.

Fidelity can be checked by passing the data in question thru the same hash function and comparing it to the hashed data. Hashing works because reassembling the original data from the hashed result is extremely difficult.

Hashing is also used because it is computationally challenging, making block mining for cryptocurrencies conceivable. Furthermore, digital signatures provide value to these different encryption procedures by allowing authentic participants to prove their identities.

Multiple variations of the above methods with desired levels of customization can be implemented across various applications of cryptography.

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