What is OTP?
"OTP" stands for one-time pad encryption. OTP is a form of symmetric cryptography. This means, that the same key is being used for encryption as well as decryption. Many encryption algorithms work like this but by using one-time pads it is possible to avoid one major weakness of many encryption techniques: their weakness to brute-force attacks.
Nearly all encryptions currently in use can be cracked by using enough raw processing power and time. Therefore they are frequently being updated by using longer key lengths, modifications to their algorithms or simply multiple consecutive or combined usage to keep cracking them impractical while technically not impossible. There are many different use cases for cryptography and depending on which requirements have to be met, different algorithms are being used. When increasing security you are often faced with this dilemma:
Do I make my encryption harder to crack and therefore harder to use or do I make it easier to crack and easier to use?
...somewhere I have heard of that before
OTP encryption is being used since 1963 by the US Americans and Soviets (since the fall of the USSR: Russians) to provide a safe communication channel for emergencies and crisis. This teleprinter (later: fax, etc.) connection is usually commonly known as the "hotline" between Washington and Moscow.
Perfect secrecy is a cryptographic concept. It means that that a plain text which has been encrypted using a key can never be decrypted again without also having that that key. You would think that this should be kind of the point about encryption: needing the key to get your data back.
In reality this is often not the case. Common encryption methods can usually be cracked- they are just designed in a way that a brute-force attack would take way too long to make it feasable.
The quantum sword of Damocles
It has almost been 20 since the first quantum computer. Due to Snowden we know that the NSA conducts at least one multimillion dollar research programme to develop quantum computers for cracking strong encryptions. That is just one such programme by one of the large intelligence agencies in the world we know of and some years have passed since then...
"Pretty" good security
But even if you're just a private person interested in protecting your data from unauthorized access and do not expect billion dollar government agencies equipped with futuristic technology to be out for you, striving for perfect security can make sense for you.
Amongst criminals it has become a lucrative business model to gain access to their victims computers using various methods and in doing so, capturing sensitive information. In such cases the use of one-time pad cryptography can serve as a kind castle keep when the enemy is already climbed the walls.
So how does OTP work? What makes it so special?
OTP utilises key lengths which are at least as long as the "plan text" itself. This means that if you want to encrypt a text file with a size of 1 MB, the key length must be at least also 1MB too. If this property is paired with absolutely unpredictable random data (like radioactive decay) to generate your key, you get perfect secrecy; this was proved by the american mathematician Claude Shannon.
It also means that even if -like it is often said when talking about encryptions- you would unleash all of humanities computing and data storage resources for millions of years upon a an encrypted file, you would only end up with the following result:
AT SOME POINT you would have computed all possible messages, that could be hidden in a file of a certain length; but because amongst all the configurations that are not senseless gibberish you would still have have all conceivable messenges which would also all be equally probable in a statistical way, you would be just as wise as if you had made up an arbitrary decryption.
That is the allure of perfect secrecy- and using OTPs can make it possible.