Encryption is basically the process of converting clear information into code in order to prevent unauthorized parties to access it. Governments, businesses, and individuals use encryption techniques to safeguard their personal data and prevent fraud. Recent studies suggest that roughly 50% of the internet data and communication is already encrypted through the HTTPS protocol.
Encryption involves the conversion of plain data into unreadable data. In a basic process of text encryption, a plaintext (data that can be clearly understood) undergoes an encryption process that turns it into ciphertext (which is unreadable). By doing this, one can guarantee that the information sent can only be read by a person in possession of a specific decryption key. When this key is used to decrypt the data, the information converted back into its original state.
Contrary to popular belief, most cryptocurrencies and their blockchain networks do not rely on encryption techniques. Instead, they rely on hash functions and digital signatures. For instance, the Bitcoin Protocol makes use of cryptographic proofs in order to secure the network and ensure the validity of each transaction. Digital signatures guarantee that each user is only able to spend the funds of his own wallet and that these funds cannot be spent more than once.
However, cryptocurrency websites might use encryption to keep the details of their customers safe. Cryptocurrency wallets also use encryption to protect wallet files and passwords.
Encryption is useful for protecting sensitive information like names, addresses, phone numbers, private messages, and social security numbers. If hackers infiltrate a computer network and access a system, they will be unable to decipher this data without a decryption key.
Encryption also provides businesses and individuals with privacy. They can exchange coded information over the internet and prevent surveillance from government agencies. Many of the world's biggest companies are currently using this technology to keep customer information safe. In the event of a data breach, hackers will be unable to access a customer’s sensitive data, such as credit card number or personal address.
Organizations might also use encryption to improve their compliance procedures. Healthcare companies in the United States, for example, need to encrypt patient data in order to adhere to HIPAA data quality standards. The federal government can fine companies who fail to protect patient data properly.
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