Scherbius patented the Enigma machine in 1918 and founded the company "Chiffriermaschinen Aktiengesellschaft." The first commercial success remained elusive, but the military soon recognized its enormous potential.

Scherbius' invention was based on the principle of rotating rotors, which encrypted text multiple times and in complex ways. This design was notable for its flexibility and the vast number of possible keys, making deciphering very difficult.