What is Encryption? - Explanation & Meaning

Definition

Encryption is the process of converting readable data into an unreadable format using an algorithm and a key. Only those who possess the correct decryption key can restore the original data, protecting sensitive information from unauthorized access.

Technical explanation

There are two main types of encryption: symmetric and asymmetric. Symmetric encryption (such as AES-256) uses the same key for both encryption and decryption and is exceptionally fast, ideal for encrypting large volumes of data. Asymmetric encryption (such as RSA or ECC) uses a key pair: a public key to encrypt and a private key to decrypt. This forms the basis for digital certificates and TLS/SSL connections. Data-at-rest encryption protects stored data on disks and in databases, while data-in-transit encryption (TLS 1.3) secures data traveling across networks. End-to-end encryption (E2EE) guarantees that only the communicating parties can read messages, not even the service provider. Hashing algorithms like SHA-256 provide one-way encryption for securely storing passwords. Key management is crucial: keys must be securely generated, stored, and rotated via hardware security modules (HSM) or cloud-based key management services.

How MG Software applies this

At MG Software, we implement encryption as standard in all applications. Database fields containing sensitive information are encrypted with AES-256. All communication runs over TLS 1.3. Passwords are hashed with bcrypt or Argon2. For API authentication, we use JWT tokens signed with asymmetric keys. We advise clients on the right encryption strategy for their specific compliance requirements, whether GDPR, PCI-DSS, or healthcare regulations.

Practical examples

• A messaging application implementing end-to-end encryption so messages are only readable by the sender and receiver, not even by the server provider.
• A healthcare institution encrypting patient records with AES-256 at-rest and TLS 1.3 in-transit to comply with medical data security requirements.
• An e-commerce platform encrypting credit card data in compliance with PCI-DSS and managing keys via a hardware security module for maximum protection.

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