Encryption is used for storing, hide and sending passwords to make sure that no one can understand them. Encryption is used as well when data is sent between intranets on Very Secure Private Networks (VSPNs). Encryption is also used to conduct commerce on the Internet to protect credit card information during transmission.

Keys are the basic of encryption. Keys are complex mathematical formulas (algorithms), that are used to encrypt and decrypt messages. If someone encrypts a message, only someone with the proper key will be able to decrypt the message. There are two basic key systems, secret-key and public-key cryptography.

An algorithm is used to perform a hash function. This process produces a message digest unique to the message. The message digest is encrypted with the sender's private key which results in a digital fingerprint.

Data Encryption Standard (DES) is a secret-key (symmetric) system; there is no public key component. Both the sender and the receiver know the secret code word. This method is not feasible for conducting business over the Internet.

RSA is a public-key (asymmetric) system. RSA uses key pairs to encrypt and decrypt messages. Each person has a public key, available to anyone on a public key ring, and a private key, kept only on their computer. Data encrypted with someone's private key can only be decrypted with their public key; and data encrypted with their public key can only be decrypted with their private key. Therefore, RSA requires an exchange of public keys; this can be done without a need for secrecy since the public key is useless without the companion private key.

PGP, Pretty Good Privacy, a program invented by Philip Zimmermann, is a popular method used to encrypt data. It uses MD5 (message-digest 5) and RSA cryptosystems to generate the key pairs. PGP is a popular program that can run on UNIX, DOS, and Macintosh platforms. It offers some variations of functionality, like compression, that other cryptosystems do not. Multiple key pairs can be generated and placed on public and private key rings.