What is Vernam Cipher (One-Time Pad) Encryption

The one-time pad or Vernam cipher is implemented through a key that consists of a random set of nonrepeating characters. Each key letter is added modulo 26 to a letter of the plaintext. In the one-time pad, each key letter is used one time for only one message and is never used again. The length of the key character stream is equal to the length of the message. For megabyte and gigabyte messages, the onetime pad is not practical, but it is approximated by shorter random sets of characters with very long periods.

An example of a one-time pad encryption is as follows:
Plaintext HOWAREYOU 7 14 22 0 17 4 24 14 20
One-time pad key XRAQZTBCN 23 17 0 16 25 19 1 2 13
Apparent sum 30 31 22 16 42 23 25 16 33
Sum Mod 26 4 5 22 16 16 23 25 16 7
Ciphertext E F W Q Q X Z Q H

The Vernam machine (shown in Figure 4-9) was developed at AT&T, and the original system performed an XOR of the message bits in a Baudot code with the key bits.