How PGP encryption works
PGP encryption uses public-key cryptography and includes a system which binds the public keys to a user name.
Encryption/decryption
PGP message encryption normally uses both asymmetric key encryption and symmetric key encryption algorithms.
Commonly, when encrypting a message, the sender uses the public key half of the recipient's key pair to encrypt a symmetric cipher session key. That session key is used, in turn, to encrypt the plaintext of the message. There are several other operational modes (eg, symmetric key operation only), but these are less commonly used.
The recipient of a PGP-encrypted message decrypts the session key using his private key (the session key was encrypted by the sender using his public key). Next, he decrypts the ciphertext of the message using the session key.
Use of two ciphers in this way was chosen, despite higher complication, in part because of the very considerable difference in operating speed between asymmetric key and symmetric key ciphers (the difference is often a factor of 1000 or more). This approach also makes it easily possible to send the same encrypted message to two or more recipients.
The entire encryption and decryption operations are completely automated in current PGP desktop versions. Many PGP users' public keys are available to all from the many PGP key servers around the world, most of which coordinate their records so as to act as mirror sites for each other.
Digital signatures
A similar strategy is used to detect whether a message has been altered since it was completed (the message integrity property), and whether it was actually sent by the person/entity claimed to be the sender (a digital signature). In PGP, it is used by default in conjunction with encryption, but can be applied to plaintext as well. The sender uses PGP to create a digital signature for the message with either the RSA or DSA signature algorithms. To do so, PGP computes a hash (also called a message digest) from the plaintext, and then creates the digital signature from that hash using the sender's private key.
The message recipient uses the sender's public key and the digital signature to recover the original message digest. He compares this message digest with the message digest he computed himself from the (recovered) plaintext. If the signature matches the received plaintext's message digest, it must be presumed (to a very high degree of confidence) that the message received has not been tampered with, either deliberately or accidentally. As well, since it was properly signed, it is very likely (to a very high degree of confidence) that the claimed sender actually did send it.
Web of trust
Both when encrypting messages and when verifying signatures, it is critical that the public key one uses to send messages to someone or some entity actually does 'belong' to the intended recipient. Simply downloading a public key from somewhere is not overwhelming assurance of that association; deliberate (or accidental) spoofing is possible. PGP has, from its first versions, always included provisions for distributing a user's public keys in an 'identity certificate' which is so constructed cryptographically that any tampering (or accidental garble) is readily detectable. But merely making a certificate effectively impossible to modify undetectably is also insufficient. It can prevent corruption only after the certificate has been created, not before. Users must also ensure by some means that the public key in a certificate actually does belong to the person/entity claiming it. From its first release, PGP products have included an internal certificate 'vetting scheme' to assist with this; it has been called a web of trust. A given public key (or more specifically, information binding a user name to a key) may be digitally signed by a third party user to attest to the association between someone (actually a user name) and the key. There are several levels of confidence which can be included in such signatures. Although many programs read and write this information, few (if any) include this level of certification when calculating whether to trust a key.
The web of trust protocol was first described by Zimmermann in the manual for PGP version 2.0:
As time goes on, you will accumulate keys from other people that you may want to designate as trusted introducers. Everyone else will each choose their own trusted introducers. And everyone will gradually accumulate and distribute with their key a collection of certifying signatures from other people, with the expectation that anyone receiving it will trust at least one or two of the signatures. This will cause the emergence of a decentralized fault-tolerant web of confidence for all public keys.
The web of trust mechanism has advantages over a centrally managed PKI scheme, but has not been universally used. Users have been willing to accept certificates and check their validity manually, or to simply accept them. The underlying problem has found no satisfactory solution.
Certificates
In the (more recent) OpenPGP specification, trust signatures can be used to support creation of certificate authorities. A trust signature indicates both that the key belongs to its claimed owner and that the owner of the key is trustworthy to sign other keys at one level below their own. A level 0 signature is comparable to a web of trust signature, since only the validity of the key is certified. A level 1 signature is similar to the trust one has in a certificate authority because a key signed to level 1 is able to issue an unlimited number of level 0 signatures. A level 2 signature is highly analogous to the trust assumption users must rely on whenever they use the default certificate authority list (like those included in web browsers); it allows the owner of the key to make other keys certificate authorities.
PGP versions have always included a way to cancel ('revoke') identity certificates. A lost or compromised private key will require this if communication security is to be retained by that user. This is, more or less, equivalent to the certificate revocation lists of centralized PKI schemes. Recent PGP versions have also supported certificate expiration dates.
The problem of correctly identifying a public key as belonging to a particular user is not unique to PGP. All public key / private key cryptosystems have the same problem, if in slightly different guise, and no fully satisfactory solution is known. PGP's original scheme, at least, leaves the decision whether or not to use its endorsement/vetting system to the user, while most other PKI schemes do not, requiring instead that every certificate attested to by a central certificate authority be accepted as correct.
Security quality
To the best of publicly available information, there is no known method which will allow a person or group to break PGP encryption by cryptographic, or computational means. Early versions of PGP have been found to have theoretical vulnerabilities and so current versions are recommended. Indeed, in 1996, cryptographer Bruce Schneier characterized an early version as being "the closest you're likely to get to military-grade encryption."[1] In contrast to security systems/protocols like SSL which only protect data in transit over a network, PGP encryption can also be used to protect data in long-term data storage such as disk files.
The cryptographic security of PGP encryption depends on the assumption that the algorithms used are unbreakable by direct cryptanalysis with current equipment and techniques. For instance, in the original version, the RSA algorithm was used to encrypt session keys; RSA's security depends upon the one-way function nature of mathematical integer factoring. New, now unknown, integer factorization techniques might, therefore, make breaking RSA easier than now, or perhaps even trivially easy. However, it is generally presumed by informed observers that this is an intractable problem, and likely to remain so. Likewise, the secret key algorithm used in PGP version 2 was IDEA, which might, at some future time, be found to have a previously unsuspected cryptanalytic flaw. Specific instances of current PGP, or IDEA, insecurities -— if they exist -— are not publicly known. As current versions of PGP have added additional encryption algorithms, the degree of their cryptographic vulnerability varies with the algorithm used. In practice, each of the algorithms in current use is not publicly known to have cryptanalytic weaknesses.