How Does The Pocket Enigma Cipher Machine Work?

It is a type of substitution cipher.

At a very basic level, each plaintext character is substituted for another character, the ciphertext character, according to the connection printed on the chosen wheel.

The encoding algorithm, in more detail:

1. A cipher wheel (I or II) is chosen. This information must be pre-shared with the message recipient.
2. The key character is chosen. This information must be pre-shared with the message recipient.
3. The start character is chosen.
4. The wheel is set to the key character and the start character is encoded.
5. The wheel is then moved to the start character and the first message character is encoded.
6. The wheel is now incremented by 1 position, and the next message character is encoded.
7. Repeat step 6 until the entire message is encoded.
8. The encoded message is arranged with the encoded start character separated from encoded message which is arranged in blocks of, typically, 5 characters.

For example: Using Wheel I, key character “D” and start character “J”

Encryption: ATTACK AT DAWN => M UQXZI MGAZE DK

Now for the limitations:

1. Only upper case characters can be encoded.
2. No punctuation or spaces can be encoded, apart from full-stops which are traditionally replaced with “X”s.

With a bit of imagination the encoding algorithm can easily be modified. For example, more wheels could be used, or the increment could be varied or even reversed.