Choosing a cipher
The first step toward your goal of encrypting data in C# is to choose a cipher. There are 4 ciphers provided by the FCL: DES, RC2, Rijndael and TripleDES. I'll offer a brief explanation of these and offer some advice as to why you would use one over another.
DES – DES stands for Data Encryption Standard. This is an old algorithm that has been shown to be weak by today's standards. The only weakness I'll discuss here is that it uses a short key and block size of 64 bits. We discussed the problem with short keys above, but short blocks are also weak, for reasons that are beyond the scope of this article. If you would like to learn more about why short keys and blocks are bad, search the web for "brute force key attack", "birthday paradox", "birthday attack" and "meet-in-the-middle attack", or read Practical Cryptography, by Schneier & Ferguson. Schneier & Ferguson recommend a key and block length of 256 bits. Another problem with DES is that it was purposely designed to be efficient in hardware and inefficient in software. This makes DES a relatively slow algorithm in any software implementation.
Triple DES – Triple DES is simply a strengthened version of DES. To strengthen the cipher, Triple DES runs the DES algorithm over the plain text three times, hence the "triple" in the name. It also offers stronger key lengths of 128 and 192 bits. However, it still uses a relatively weak block size of 64 bits. Another disadvantage of Triple DES is that, since it must perform the DES algorithm three times, it is a relatively slow cipher.
RC2 – RC2 is generally accepted as a good cipher and it has been around since the mid 1990s. It is also more than twice as fast as DES when implemented in software. However, it still uses a 64 bit block size and a key length (in the FCL implementation) of 40 to 128 bits in 8-bit increments.
Rijndael (a.k.a. AES) – Rijndael is the U.S. government's Federal Information Processing Standard (FIPS) Advanced Encryption Standard (AES) cipher algorithm. The names Rijndael and AES are used interchangeably in cryptography literature. Rijndael offers key lengths and block sizes of 128, 192 and 256 bits. One drawback of Rijndael is it's relative newness. Although it is highly recommended and considered strong by most cryptographers, a new cipher is one that has not withstood the same scrutiny and test of time as an older, more seasoned cipher. Newness not withstanding, the available 256-bit key and block lengths and it's acceptance as a government standard lead me to favor this cipher and I would recommend this cipher to you if you aren't constrained by compatibility or political concerns.
Key Management and Authentication
Key management and authentication are not discussed in detail in this article, but our discussion would be incomplete without mentioning them.
Key Management – To borrow a phase from Keith Brown, in essence, cryptography simply compresses large secrets into small secrets. That is, a large, secret message is rendered unreadable and no longer secret without the use of a much smaller secret, the key. Although your message, if properly encrypted, is no longer secret, you must still maintain the secrecy of the key. If an attacker gains access to the key, your messages are obviously no longer secret. Therefore, it is absolutely essential that you implement a good key management strategy to maintain the security of your keys. Another precaution you must take is to change keys frequently. Keys with a long lifetime not only allow an attacker plenty of time to break the key, but they also increase the amount of damage an attacker can do should he succeed in recovering your key.
Authentication – Even if you properly encrypt messages in your system, you are still left with two problems on the receiving end. First, do you really know who sent the data? Is the data really from the party with whom you think you're communicating, or has an attacker sent the message? Secondly, is the data received really the same as the data that was sent by the other party, or has an attacker modified the contents of the message? These problems are addressed by Message Authentication Codes (MACs) and digital signatures, and you absolutely must implement an authentication strategy in your application so that you can detect bogus messages.
Before you read on, I would highly recommend further study of cryptographic principles if you are new to the subject. An excellent place to start would be with the book I mentioned above, Practical Cryptography, by Schneier and Ferguson.
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