Cryptology is defined as the study of cryptography or cryptanalysis. Cryptography is simply the process of communicating secretly through the use of ciphers, and cryptanalysis is the process of cracking or deciphering such secret communications. Historically, cryptology has been of particular interest during wars, when countries used secret codes to communicate with their troops while also trying to break the enemy's codes to infiltrate their communications.
The wartime applications still exist, but the use of cryptography in civilian life is becoming increasingly popular as more critical transactions occur over the Internet. Network sniffing is so common that the paranoid assumption that someone is always sniffing network traffic might not be so paranoid. Passwords, credit card numbers, and other proprietary information can all be sniffed and stolen over unencrypted protocols. Encrypted communication protocols provide a solution to this lack of privacy and allow the Internet economy to function. Without Secure Sockets Layer (SSL) encryption, credit card transactions at popular websites would be either very inconvenient or insecure.
All of this private data is protected by cryptographic algorithms that are probably secure. Currently, cryptosystems that can be proven to be secure are far too unwieldy for practical use. So in lieu of a mathematical proof of security, cryptosystems that are practically secure are used. This means that it's possible that shortcuts for defeating these ciphers exist, but no one's been able to actualize them yet. Of course, there are also cryptosystems that aren't secure at all. This could be due to the implementation, key size, or simply cryptanalytic weaknesses in the cipher itself. In 1997, under US law, the maximum allowable key size for encryption in exported software was 40 bits. This limit on key size makes the corresponding cipher insecure, as was shown by RSA Data Security and Ian Goldberg, a graduate student from the University of California, Berkeley. RSA posted a challenge to decipher a message encrypted with a 40-bit key, and three and a half hours later, Ian had done just that. This was strong evidence that 40-bit keys aren't large enough for a secure cryptosystem.
Cryptology is relevant to hacking in a number of ways. At the purest level, the challenge of solving a puzzle is enticing to the curious. At a more nefarious level, the secret data protected by that puzzle is perhaps even more alluring. Breaking or circumventing the cryptographic protections of secret data can provide a certain sense of satisfaction, not to mention a sense of the protected data's contents. In addition, strong cryptography is useful in avoiding detection. Expensive network intrusion detection systems designed to sniff network traffic for attack signatures are useless if the attacker is using an encrypted communication channel. Often, the encrypted Web access provided for customer security is used by attackers as a difficult-to-monitor attack vector.
Many of the concepts of cryptographic security stem from the mind of Claude Shannon. His ideas have influenced the field of cryptography greatly, especially the concepts of diffusion and confusion. Although the following concepts of unconditional security, one-time pads, quantum key distribution, and computational security weren't actually conceived by Shannon, his ideas on perfect secrecy and information theory had great influence on the definitions of security.
1. Unconditional Security
A cryptographic system is considered to be unconditionally secure if it cannot be broken, even with infinite computational resources. This implies that cryptanalysis is impossible and that even if every possible key were tried in an exhaustive brute-force attack, it would be impossible to determine which key was the correct one.
2. One-Time Pads
One example of an unconditionally secure cryptosystem is the one-time pad. A one-time pad is a very simple cryptosystem that uses blocks of random data called pads. The pad must be at least as long as the plaintext message that is to be encoded, and the random data on the pad must be truly random, in the most literal sense of the word. Two identical pads are made: one for the recipient and one for the sender. To encode a message, the sender simply XORs each bit of the plaintext message with the corresponding bit of the pad. After the message is encoded, the pad is destroyed to ensure that it is only used once. Then the encrypted message can be sent to the recipient without fear of cryptanalysis, since the encrypted message cannot be broken without the pad. When the recipient receives the encrypted message, he also XORs each bit of the encrypted message with the corresponding bit of his pad to produce the original plaintext message.
While the one-time pad is theoretically impossible to break, in reality it's not really all that practical to use. The security of the one-time pad hinges on the security of the pads. When the pads are distributed to the recipient and the sender, it is assumed that the pad transmission channel is secure. To be truly secure, this could involve a face-to-face meeting and exchange, but for convenience, the pad transmission may be facilitated via yet another cipher. The price of this convenience is that the entire system is now only as strong as the weakest link, which would be the cipher used to transmit the pads. Since the pad consists of random data of the same length as the plaintext message, and since the security of the whole system is only as good as the security of pad transmission, it usually makes more sense to just send the plaintext message encoded using the same cipher that would have been used to transmit the pad.
3. Quantum Key Distribution
The advent of quantum computation brings many interesting things to the field of cryptology. One of these is a practical implementation of the onetime pad, made possible by quantum key distribution. The mystery of quantum entanglement can provide a reliable and secret method of sending a random string of bits that can be used as a key. This is done using nonorthogonal quantum states in photons.
Without going into too much detail, the polarization of a photon is the oscillation direction of its electric field, which in this case can be along the horizontal, vertical, or one of the two diagonals. Nonorthogonal simply means the states are separated by an angle that isn't 90 degrees. Curiously enough, it's impossible to determine with certainty which of these four polarizations a single photon has. The rectilinear basis of the horizontal and vertical polarizations is incompatible with the diagonal basis of the two diagonal polarizations, so, due to the Heisenberg uncertainty principle, these two sets of polarizations cannot both be measured. Filters can be used to measure the polarizations— one for the rectilinear basis and one for the diagonal basis. When a photon passes through the correct filter, its polarization won't change, but if it passes through the incorrect filter, its polarization will be randomly modified. This means that any eavesdropping attempt to measure the polarization of a photon has a good chance of scrambling the data, making it apparent that the channel isn't secure.
These strange aspects of quantum mechanics were put to good use by Charles Bennett and Gilles Brassard in the first and probably best-known quantum key distribution scheme, called BB84. First, the sender and receiver agree on bit representation for the four polarizations, such that each basis has both 1 and 0. In this scheme, 1 could be represented by both vertical photon polarization and one of the diagonal polarizations (positive 45 degrees), while 0 could be represented by horizontal polarization and the other diagonal polarization (negative 45 degrees). This way, 1s and 0s can exist when the rectilinear polarization is measured and when the diagonal polarization is measured.
Then, the sender sends a stream of random photons, each coming from a randomly chosen basis (either rectilinear or diagonal), and these photons are recorded. When the receiver receives a photon, he also randomly chooses to measure it in either the rectilinear basis or the diagonal basis and records the result. Now, the two parties publicly compare which basis they used for each photon, and they keep only the data corresponding to the photons they both measured using the same basis. This doesn't reveal the bit values of the photons, since there are both 1s and 0s in each basis. This makes up the key for the one-time pad.
Since an eavesdropper would ultimately end up changing the polarization of some of these photons and thus scramble the data, eavesdropping can be detected by computing the error rate of some random subset of the key. If there are too many errors, someone was probably eavesdropping, and the key should be thrown away. If not, the transmission of the key data was secure and private.
4. Computational Security
A cryptosystem is considered to be computationally secure if the best-known algorithm for breaking it requires an unreasonable amount of computational resources and time. This means that it is theoretically possible for an eavesdropper to break the encryption, but it is practically infeasible to actually do so, since the amount of time and resources necessary would far exceed the value of the encrypted information. Usually, the time needed to break a computationally secure cryptosystem is measured in tens of thousands of years, even with the assumption of a vast array of computational resources. Most modern cryptosystems fall into this category.
It's important to note that the best-known algorithms for breaking cryptosystems are always evolving and being improved. Ideally, a cryptosystem would be defined as computationally secure if the best algorithm for breaking it requires an unreasonable amount of computational resources and time, but there is currently no way to prove that a given encryption-breaking algorithm is and always will be the best one. So, the current best-known algorithm is used instead to measure a cryptosystem's security.