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E-conomy Friday, 5 March, 1999, 18:00 GMT
What is encryption?
Graphic: how public-key encryption works
The advent of the computer revolution has radically changed the way we communicate and exchange information. In turn, security mechanisms of paper-based communication - sealed envelopes and locked filing cabinets - are being replaced with new, more sophisticated protection techniques.

One of those is encryption, a mathematical process that uses formulas to scramble information and make it unreadable to anyone who might intercept it.

E-conomy - Code of Conduct
There are several types of encryption, all of which require the use of secret information, usually referred to as a key.

In traditional encryption, called secret-key encryption, the sender uses the secret key to scramble (encrypt) the message and the receiver uses the same key to unscramble (decrypt) it.

But this method has a problem. The sender and receiver must agree on the secret key without anyone else finding out. Often, they must trust a courier or a phone system to communicate the secret code. Anyone who overhears or intercepts the key in transit can read, modify or forge encrypted messages.

Therefore, what is more commonly used today is a method called public-key encryption. Introduced in 1976, this method gives each user a pair of keys: a public key and a private key. Each person's public key is made available in a public directory; the private key is kept secret.

It works like this: If Bob wishes to send a secret message to Mike, he looks up Mike's public key in a directory, uses it to encrypt the message and sends it off. Mike then uses his private key to decrypt the message and read it.

With public-key encryption, no one listening in can decrypt the message. Anyone can send an encrypted message to Mike but only Mike can read it.

Some governments - most notably the United States - want all private keys to be stored with a trusted third party, such as a bank, credit card company or law enforcement agency. This system is called a key escrow.

Those governments argue that it is a matter of national security that they have access to electronic information to prevent cybercrime and terrorism. Civil liberties groups and businesses argue that the requirement is an invasion of privacy and will stunt electronic commerce.

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