Encryption: The Backbone of the Digital Economy
Encryption has been all over the news lately. The Apple vs FBI case, while not strictly about encryption, brought it back into the limelight in the US. Discussions of encryption began to resurface around the world earlier in the year, and in January, David Cameron, Prime Minister of Great Britain, called for a ban on end-to-end encrypted messaging in Britain. His purpose, according to The Guardian, is to prevent terrorists from hiding their communications from law enforcement. And just the other day at SXSW, President Obama spoke about encryption in the US. The Verge:
President Barack Obama called on the tech community to build a safe encryption key to assist in law enforcement investigations, saying that if it failed, it could one day face a more draconian solution passed by a Congress that is less sympathetic to its worldview.
Changes of encryption law in the UK and the US would have far-reaching consequences and deserve serious discussion, but before we can do that, we need a better understanding of encryption, its history, and the impact it has on the world.
What is Encryption?
Simply put, encryption locks your data, and it can only be unlocked with a key.
More technically defined, it is a mathematical process that makes data (messages, images, files, etc) unintelligible to humans or computers without a key.
There are countless types of encryption that you and I don’t need to understand, but it’s important to know who has the key.
If I encrypt a file on my computer, I set a password, and I’m the only one who has they key. Nobody can unlock that file without my key.
If I message my wife with WhatsApp, the message is encrypted as it passes from my phone through WhatsApp’s servers and is decrypted when it reaches her phone. My phone has the key, and her phone has they key. But Sprint, WhatsApp, and anyone else whose servers my message pass through don’t have the key. There is no way for them to provide the contents of my message to the police.
If I message my wife with iMessage, the message is encrypted as it passes from my phone through Apple’s servers and is decrypted when it reaches her phone. My phone has the key, and her phone has the key. But unlike WhatsApp, Apple also has the key. The message is encrypted on Apple’s servers, but they have the ability to decrypt my message with the key and give it to police.
A Bit of History
The history of encryption goes back millennia to codes and ciphers used in ancient civilizations. Encryption was commonly used by armies in wartime to protect their communication from the enemy. Throughout the centuries countless ciphers were invented. Morse Code, probably the most widely known, was invented in the early 1800s.
In more recent history, encryption and, more specifically, code breaking played a key role in World War 2. BBC: “Probably the most important codebreaking event of the war was the successful decryption by the Allies of the German "Enigma" Cipher.” Around that time, the exporting of encryption technology was heavily regulated in the United States and elsewhere, since it was considered vital to national security.
These export laws limited the strength of encryption and kept US software companies in the 1990s from selling software with highly effective encryption capabilities overseas. (They were allowed to sell it within the United States because the 1st Amendment.) Sometimes software companies made a US and an international version of their software, but most of the time, they simply shipped software with poor security.
In the year 2000, the export laws were drastically relaxed, allowing the export of encryption technologies in most cases.
Benefits of Encryption
In November of last year, researchers at the Niskanen Center released a paper discussing the benefits of encryption for the world economy. They showed significant growth in 5 areas directly affected by encryption.
One area that showed particularly huge growth is e-Commerce. Total annual online sales grew from “$100 million in 1994 to over $250 billion as of 2009.” There are other factors involved in this growth, but without encryption and “the security it provides,” conducting business online would not have become commonplace.