Basic Principles of Encryption can be read about at a site provided by a student at Carleton University in Canda. Also I gave a lecture in class, in which you should have taken good notes. Go read, then answer:
Query 21.1: Define each of these terms in your own words:
Plaintext
Encryption
Decryption
Authentication
Encryption Key
Public Key Encryption is based on the idea that a technique can be (and has been ) invented in which TWO keys are necessary. One key, the "public" key, is freely available to anyone and is used to encrypt the message. The other key, the "private" key, is known only to the recipient of the message. Without both keys, you cannot decrypt the message.
The basic concepts of public key encryption can be read at more Canadian web-site:
Authentication is the process of proving to someone that you're the person whom you claim to be.
Query 21.2: Recount the story of how the police department verifies its identity when notifying people of an emergency.
Query 21.3: This question will be VERY SIMILAR to one that appears on the final exam. So, work out a good answer and have it written up. With simple modifications it can be included as your answer to one of the questions on the final exam. And that's only a FEW WEEKS AWAY, eh?
Goal: Design and describe a system for "digital cash" using public key encryption. The main objective is to be able to "buy" digital coins from a bank; then give them to a merchant in such a way that the merchant can in turn "deposit" them in the bank with assurance that they are good for real money. However the bank has no means of determining where you spent the money.
It is OK (indeed, necessary) for transactions to occur between buyer and bank, and between seller and bank. The point of the exercise is that the bank will see MANY transactions, and should have no way to pair them up. It is also true that coins can pass through many hands before they're "cashed in" at the bank, though it may be the case that the bank has to in some way validate them as it goes along. (Would YOU take abunch of bits from someone who says they're money?)
For some ideas on the solution to the problem, see digicash.
I'm not entirely satisfied with their explanation of the "envelope" concept,
so I'll keep looking for a better one. And I bet you will too. Here's a
slightly different take on the subject.