Encryption

Encryption means scrambling data so that only someone who holds the right key can read it. The key is a long secret number. Without the key, the scrambled data looks like random characters. With the key, a computer can turn it back into the original data in a fraction of a second. Turning it back is called decryption.

Here is how it works. The sender's software uses a key to scramble the data. The scrambled data then travels over a network or is stored on a disk. Anyone who copies it on the way sees only random characters. The receiver's software uses the matching key to turn it back into the original data.

Data is encrypted in two situations. The first is data being sent, such as a payment request travelling from a shop to a bank. The second is data being stored, such as customer records on a company's servers.

Encryption is only as safe as its keys. If an attacker steals the key, the scrambling no longer protects anything. So large companies use encryption key management to control who holds each key and to replace keys regularly. Inside a contactless card, a tiny chip called a secure element keeps the card's keys and never lets them out.

Take, for example, a website address that starts with https and shows a padlock. Everything you send to that site is encrypted on the way.

Consider a laptop with an encrypted hard disk that is stolen from a car. The thief gets only scrambled data, not the files on it.

For instance, a messaging app with end-to-end encryption scrambles each message on the sender's phone. Only the receiver's phone holds the key to read it.

How is encryption different from tokenisation? Encryption scrambles the real number, and the key can unscramble it. Tokenisation replaces the real number with a different number, and the real number stays in one safe place. Attackers use encryption too: ransomware encrypts a company's files and keeps the key. Researchers are now designing post-quantum cryptography, because future quantum computers may be able to break some of today's encryption.