What the Heck is Encryption?

Business, Journal,  Principals

If you hear the word “encryption” and immediately think of hackers shrouded in black hoodies, furiously typing away in an under-lit basement, targeting government institutions… we’ve got a reality check for you. 

The victims of the biggest data breaches of the 21st Century include the likes of Adobe, eBay, LinkedIn and My Fitness Pal – companies with products and services many of us use every day. However, smaller businesses aren’t immune, and stand to lose thousands to scammers every year. Since the outbreak of COVID-19 alone, hackers have stolen more than $1,371,000 from Australians. 


  • Real estate agents handle large amounts of sensitive client information that needs to be protected.
  • Cyber attacks have been growing exponentially in the past few years.
  • Encryption is one of the most effective methods of securing data. Hackers can’t understand encrypted files without an encryption key to decode or unscramble data.

Before we get into the technical stuff, here’s a bit of history for you… 

The origins of encryption

The word ‘encryption’ comes from the Greek ‘kryptos’, meaning hidden or secret. Humans have been using encryption for thousands of years. As early as 1900 B.C., an Egyptian scribe used nonstandard hieroglyphs to hide the meaning of an inscription from all but its intended audience. 

Throughout history, different communities have come up with their own ways of concealing the contents of a message by reordering or replacing letters with other characters, symbols, numbers or pictures. More recently, it’s been used by militaries and governments. 

If you’ve ever read a Dan Brown book or watched the adaptations, you’ll know what we’re talking about. 

Modern-day encryption

We all use encryption in everyday life, often without even knowing it. Whenever you use an ATM or buy something online, for example, encryption is used to protect the information being relayed. Businesses rely on encryption to protect their customers and sensitive information, which in turn protects them from reputational damage when there is a data breach.

So, how does it actually work?

There are three major components to any encryption system: the data, the encryption engine and the key management. Sometimes all three components are running or stored in the same place. Other times, the three components are stored in separate places (which reduces the risk of compromising the entire encryption system). 

In computer-speak, ciphers (the formulas used to encode and decode messages) include a variable as part of the algorithm. The variable (called a ‘key’) is what makes a cipher’s output unique. If an encrypted message is intercepted, the intruder would need to work out which cipher the sender used as well as what keys were used as variables.

What that means for you

Encryption is important for security, reputation management and also to meet compliance regulations.

Real estate agents handle highly sensitive client information on a daily basis. You’ve got client’s first and last names, addresses, birthdays, drivers licenses, telephone numbers, perhaps the name of their financial institutions, email addresses, as well as contracts and sometimes even credit scores. 

While the tools you use will generally take care of encryption for you, there’s a few simple things you can do to protect your clients and your agency: 

  • Verify any requests to change bank details by telephoning the supplier directly. 
  • Put a multi-person approval process in place for transactions over a certain dollar amount. 
  • Keep the security on your network and devices up-to-date, and have a good firewall to protect your data. Upgrade when prompted. 

With great power comes great responsibility, as Uncle Ben said. Not only does a data breach threaten your clients financial security, but it can also ruin your real estate agency’s reputation. If you want more information about encryption and the impact it can have on your business, check out these links: