It is renowned for its simplicity and efficiency, and has been widely used in the realms of encrypted communication and data protection. The RC4 algorithm employs a variable-length key (typically ranging from 8 to 256 bytes) to generate a pseudo-random key stream, which is then XORed with the original data for encryption. For decryption, XORing the key stream with the ciphertext once more facilitates the restoration of the original data.

The crux of the RC4 algorithm lies in the process of generating the key stream, which hinges on the key and a pseudo-random number generator. It incorporates steps such as state vectors, permutation operations, and key scheduling to generate the key stream, endowing RC4 with the characteristics of speed and efficiency. However, despite its widespread application in the early design stages, over time researchers have unearthed some security vulnerabilities and weaknesses in RC4. For instance, RC4 is susceptible to bias attacks against the key and issues related to key reuse. Consequently, in modern encryption applications, the usage of RC4 is no longer recommended. In contrast, more robust and secure encryption algorithms such as AES (Advanced Encryption Standard) have supplanted RC4 in numerous domains.