What are the two basic functions used in the encryption algorithm?

            All the encryption algorithms are based on two general principles:

      Substitution: In which each element in the plaintext(bit, letter, group of  bits or letters) is mapped into another element.

      Transposition: In which elements in the plaintext are rearranged.

The fundamental requirement is that no information be lost(that is ,that all operations are reversible). Most systems, referred to as product systems, involve multiple stages of substitutions and transpositions.