Asymmetric, Symmetric, and Hybrid Encryption

One form of encryption employs the use of symmetric ciphers. These use the same key for encryption and decryption. The advantage of using symmetric ciphers is that the decryption process is usually faster, but a drawback is that the key distribution can be difficult. Symmetric ciphers are either block ciphers, which operates on blocks of a fixed size, or stream ciphers, which generate a stream of pseudo-random bits called a keystream. Two concepts related to block ciphers are confusion and diffusion. Confusion refers to the methods that are used to hide relationships between the plaintext, ciphertext, and the key. Diffusion spreads the influence of the plaintext bits and the key bits over as much of the ciphertext as possible.

Source: http://msdn.microsoft.com/en-us/library/ff650720.aspx

Another form of encryption is asymmetric encryption. This form uses asymmetric ciphers, which use a public and a private key, as opposed to just one key. A message is encrypted using the public key, and can only be  decrypted using the private key that corresponds with it. The advantages with asymmetric encryption are better key distribution and there's not a need for a out-of-band communication channel to transmit the secret key. The downside to asymmetric ciphers is that they are a lot slower than symmetric ciphers.

Source: http://msdn.microsoft.com/en-us/library/ff650720.aspx

The final from of encryption is hybrid encryption. A hybrid cryptosystem uses and asymmetric cipher to exchange a randomly generated key to encrypt the communications with a symmetric cipher. This offers the speed of a symmetric cipher, while providing a secure key exchange.

Nowadays, hackers are not able to crack most ciphers that are used. In order to get to the information, an attacker can use a man-in-the-middle (MitM) attack to get around encryption. MitM attacks occur when the attacker is able to intercept information from both parties, while the parties think they are communicating with each other. The attacker is able to sniff and modify traffic between the two parties without their knowledge.

Source: http://www.computerhope.com/jargon/m/mitma.htm