What does encryption fundamentally do to data?

Encryption fundamentally scrambles data to make it unreadable to anyone who does not have the appropriate decryption key or password. This process transforms the original plaintext data into an unreadable format known as ciphertext, ensuring that even if unauthorized individuals gain access to the data, they cannot interpret it without the means to decrypt it. This is a critical security measure used to protect sensitive information from being accessed by unauthorized users.

The other options do not align with the primary function of encryption. Reducing the size of files pertains to compression techniques rather than encryption. Improving processing speed is unrelated; in fact, encryption can sometimes slow down processing because it adds steps in data handling. Changing the file format might enhance security in some contexts but is not the core purpose of encryption.