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The speaker discusses the concept of encryption, emphasizing its role in securing emails, banking transactions, and online purchases from malicious hackers and criminals. Encryption transforms readable data (plain text) into unreadable data (ciphertext) using mathematical algorithms, making it accessible only to the intended recipient. The speaker illustrates this with a historical example involving Julius Caesar, who used a simple letter-shifting technique to encode messages. The scenario of Alice and Bob illustrates public key encryption, where they communicate securely despite an eavesdropper, Eve, attempting to intercept their messages.