Encryption

Web-commerce has been one of the most highlighted and fastest-growing sectors in the past few years, which is even significant after the emergence of small communication devices, like smartphones or tablets which allow access to the internet way more conveniently. And of course, the stakes are even higher now than ever in terms of online security, in order to make sure the online transactions are secured. 

Encryption plays an incredibly vital part in online transactions’ security. Encryption refers to the act of encoding data. It serves as a digital authentication which allows both the customers and the merchant to verify each other’s identities. It is often used in credit card transactions which involves the credit card and security number, allowing merchants to verify if the customer is the real owner. On the other hand and more importantly, encryption prevents third parties from accessing and reading the information in the course of data transmission. Encryption also verifies the integrity of the data, ensuring that it is not modified in any way. 

The most basic example of encryption is a symmetric cryptosystem. Using the example from an article from Harvard Cyber Law, the messages can be encrypted according to a scheme where each number, from 1 to 26, refers to a letter of the alphabet (so that 1 = A, 2 = B, 3 = C, etc)”. These are obviously very easy to crack. In real world we need a much more powerful encryption system, which is like Public Key Encryption or asymmetric encryption. It relies on 2 keys, one of which is public and another one is private. If you have one key, you cannot infer the other key. 

Example of how it works: I have a public key which I make available to everyone. Anyone can take my public key and encode a message and send it over the network in coded form. Only me who has the private key at my end can decode the message, turning zeros and ones into readable text.

Sources:

John Palfrey, Security and Basics of Encryption in E-Commerce, Retrieved from http://cyber.law.harvard.edu/ecommerce/encrypt.html

Oracle ThinkQuest, Use of Data Encryption in Today’s Context: E-Commerce, Retrieved from http://library.thinkquest.org/27158/today.html