Accordingly, the potential of encryption is being recognized as an essential element in fostering electronic commerce, worldwide.
In this direction, European Union has referred to this subject in their recent publication, in which the digital signatures and encryption have been identified as the important applications of cryptography (Holland, Cyberspace-law)
The process of encryption involves the conversion of the relevant data into a particular code, while a specific algorithm and key would be required to interpret the given code or cipher. While this process ensures the security of data, in case of any theft of the computer or device storing the data, its security is also ensured even when the data is tapped by an unauthorized third party, during its transmission over a network.
Therefore, data can be encrypted, while it is placed in a stored compartment, like a computer folder. Similarly, the encryption ensures that data is safe when it is being transmitted from one device to another, through a network. While the earlier would be a “Storage encryption”, the later is named as a “transmission encryption”….(Encryption at the University of California, 2006)
Although data security is of prime importance to the American federal policymakers, reports suggest that the governmental agencies have not achieved much in this regard. As per a report from Nebraska Bankers Association, dated August 5, 2008, the U.S. House committee on homeland security chairman.