Encryption is the art/science of transforming understandable data into unintelligible data using a reversible algorithm. The reverse algorithm is called “de-encryption”. Cryptography is the study of (de-)encryption. There are many excellent histories of encryption, starting with David Kahn’s 1973 book The Codebreakers. Wikipedia has a nice article “History of cryptography” which has an interesting bibliography. Wikipedia also has a nice article on IBM’s 1975 proposal for DES, the Data Encryption Standard, which was approved in 1977 by NSA and NIST for “non-classified” document encryption. There was always great suspicion that the NSA put a backdoor into DES, but all they really did was to keep the key small at 56 bits rather than 64. With this small key, DES evolved to Triple DES (applying DES three times which was very slow), and was eventually replaced by the Advanced Encryption Standard AES in 2001.
While there was earlier work, notably Claude Shannon‘s seminal paper “A mathematical theory of cryptography” which was classified during WW II but published in 1949 as “Communication Theory of Secrecy Systems” and his other papers on communication theory, the fact that DES was a public algorithm, really put cryptography out in the open for people to study. A fundamental change to encryption came with the 1976 publication “New Directions in Cryptography” by Diffie and Hellman about public key encryption. No longer was there a single secret key that had to be shared (a problem in its own) between sender and receiver, but now each owned a pair of keys, one public and one private, either of which could decrypt a message encrypted by the other key. For example, if Alice wants to send a message to Bob, she encrypts it with Bob’s public key, and she is confident that only Bob can decrypt it with his private key. Bob can publish his public key on his web site, but he never shares his private key with anyone. Public key encryption ideas are the basis of much progress in encryption and cryptography.
The current slideset for my introductory talk on Cryptography is Quick Cryptography Introduction.