RC4 Encryption Algorithm

RC4 is a stream cipher and variable length key algorithm. This algorithm encrypts one byte at a time (or larger units on a time).
A key input is pseudorandom bit generator that produces a stream 8-bit number that is unpredictable without knowledge of input key, The output of the generator is called key-stream, is combined one byte at a time with the plaintext stream cipher using X-OR operation.
Example:

RC4 Encryption 
10011000 ? 01010000 = 11001000    

RC4 Decryption 
11001000 ? 01010000 = 10011000

Key-Generation Algorithm –
A variable-length key from 1 to 256 byte is used to initialize a 256-byte state vector S, with elements S[0] to S[255]. For encryption and decryption, a byte k is generated from S by selecting one of the 255 entries in a systematic fashion, then the entries in S are permuted again.

1. Key-Scheduling Algorithm:
   Initialization: The entries of S are set equal to the values from 0 to 255 in ascending order, a temporary vector T, is created.
   If the length of the key k is 256 bytes, then k is assigned to T. Otherwise, for a key with length(k-len) bytes, the first k-len elements of T as copied from K and then K is repeated as many times as necessary to fill T. The idea is illustrated as follow:
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   for     i = 0 to 255 do S[i] = i; T[i] = K[i mod k - len];

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   we use T to produce the initial permutation of S. Starting with S[0] to S[255], and for each S[i] algorithm swap it with another byte in S according to a scheme dictated by T[i], but S will still contain values from 0 to 255 :

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   j = 0; for     i = 0 to 255 do     {         j = (j + S[i] + T[i])mod 256;         Swap(S[i], S[j]);     }

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2. Pseudo random generation algorithm (Stream Generation):
   Once the vector S is initialized, the input key will not be used. In this step, for each S[i] algorithm swap it with another byte in S according to a scheme dictated by the current configuration of S. After reaching S[255] the process continues, starting from S[0] again
   
   
   
   
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   i, j = 0; while (true)     i = (i + 1)mod 256; j = (j + S[i])mod 256; Swap(S[i], S[j]); t = (S[i] + S[j])mod 256; k = S[t];

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3. Encrypt using X-Or():

   

News:
In September 2015, Microsoft announced the end of using RC4 in Microsoft edge and internet explorer 11.

This video gives a clear example of RC4 algorithm

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