Modern cryptography

Patrick McConnell

This chapter describes some of the key concepts of modern cryptography as they relate to digital money and operational risk. As noted in Chapter 14, cryptography is a discipline that has a very long history and is relatively simple in concept, but can be excruciatingly difficult in detail. Before reading this chapter, it is worth reading or at least refreshing the concepts of the previous chapter about classical cryptography and the emergence of the tools and techniques that dominated the discipline until World War II. The ideas that were employed for millennia are still in use today, but have been immeasurably enhanced by the use of high-powered computers that also brought the introduction of advanced mathematical concepts to assist in securing messages.

The chapter is organised into two major parts.

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  • Symmetric key cryptography (SKC), which can be seen as classical cryptography on steroids, using modern computers to perform cryptographic functions (encrypting, decrypting, hashing and authentication) at very high speeds and phenomenal accuracy.

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  • Asymmetric key cryptography (AKC), which introduces the use of public and private keys with advanced mathematics to make ciphers almost