Ecommerce is all about secrets, financial secrets, purchase order
secrets, personal information secrets and how to get those secrets from
one party to another.
It's not an easy task.
It's the proverbial catch 22 scenario. If I send you an encrypted
message, you must have some way of decoding it. But if I send you the
"key", that is, the way of decoding the message without encrypting the
key first, someone could intercept that key and decode the message.
So in effect, I need to encrypt the key first which would make it
useless since you would now have two secrets you could not decipher.
Both the key and the message it decrypts are encrypted and out of reach.
So what does this have to do with ecommerce? Suppose you're on a
website and trying to order some goods. You have a secret. The secret
is your credit card number and you don't want anyone to get it when
you're making your purchase.
The retail store has it's processing mechanism with information going
back to you and the bank it does not want to divulge either.
Yet, here you are on a very public medium trying to get one secret from
you to the online store and another secret back from the store to you.
It seems impossible. How can you transmit a secret in public without
giving it away? It would be as if two people were talking on the phone
with someone eavesdropping on the conversation.
The
answer to passing a secret between two parties in a public arena came
in the 1970's from Stanford University in a collaboration between
Whitfield Diffie, Martin Hellman and Ralph Merkle.
In effect, their paper titled, "New Directions in Cryptography",
outlined how a secret could be passed from one party to another in full public viewing without sharing any keys in advance.
It was an astonishing achievement of great intellectual rigor and
totally counter-intuitive. It is this achievement which has allowed
online ecommerce to become a reality.