Derek and Zak confirm they are talking to each other using the Diffie-Hellman protocol. Zak then encrypts a secret message using RSA encryption, which Derek then decrypts.
https://en.wikipedia.org/wiki/Diffie%E2%80%93Hellman_key_exchange
https://en.wikipedia.org/wiki/RSA_(cryptosystem)
The Art of the Problem has a fantastic pair of videos on YouTube explaining how these encryption methods both work.
Diffie-Hellman: https://www.youtube.com/watch?v=YEBfamv-_do
RSA Encryption: https://www.youtube.com/watch?v=wXB-V_Keiu8The podcast lives at https://www.thehyperfine.com/
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Zak on Twitter @phyzaks: https://twitter.com/phyzaks