Encryption is the process of changing text so that it is no longer easy to read. A very simple example is the following sentence:
Guvf vf n fvzcyr fhofgvghgvba pvcure.
Commercial encryption uses methods which are a lot more secure than the one I used to produce that example. Almost all modern encryption methods rely on a key - a particular number or string of characters which are used to encrypt, decrypt, or both.
In the next sections, common encryption methods are presented. To illustrate how they work, ficticious characters named Bob and Alice will be introduced. Private key encryption and public key encryption are discussed, as are their limitations.
Private key encryption is the standard form. Both parties share an encryption key, and the encryption key is also the one used to decrypt the message. The difficulty is sharing the key before you start encrypting the message - how do you safely transmit it?
Many private key encryption methods use public key encryption to transmit the private key for each data transfer session.
If Bob and Alice want to use private key encryption to share a secret message, they would each use a copy of the same key. Bob writes his message to Alice and uses their shared private key to encrypt the message. The message is then sent to Alice. Alice uses her copy of the private key to decrypt the message. Private key encryption is like making copies of a key. Anyone with a copy can open the lock. In the case of Bob and Alice, their keys would be guarded closely because they can both encrypt and decrypt messages.
Public key encryption uses two keys - one to encrypt, and one to decrypt. The sender asks the receiver for the encryption key, encrypts the message, and sends the encrypted message to the receiver. Only the receiver can then decrypt the message - even the sender cannot read the encrypted message.
When Bob wants to share a secret with Alice using public key encryption, he first asks Alice for her public key. Next, Bob uses Alice's public key to encrypt the message. In public key encryption, only Alice's private key can unlock the message encrypted with her public key. Bob sends his message to Alice. Alice uses her private key to decrypt Bob's message.
The things that make public key encryption work is that Alice very closely guards her private key and freely distributes her public key. She knows that it will unlock any message encrypted with her public key.
Cryptanalysis, or the process of attempting to read the encrypted message without the key, is very much easier with modern computers than it has ever been before. Modern computers are fast enough to allow for 'brute force' methods of cryptanalysis - or using every possible key in turn until the 'plain text' version of the message is found.
The longer the key, the longer it takes to use the 'brute force' method of cryptanalysis - but it also makes the process of encrypting and decrypting the message slower. Key length is very important to the security of the encryption method - but the 'safe' key length changes every time CPU manufacturers bring out a new processor.
Encryption does not make your data secure. Not using encryption, however, means that any data in transit is as easy to read as the contents of a postcard, sent in regular mail. Encryption at least ensures that anyone who does read your messages has worked hard at it.