Public key cryptosystems use asymmetric algorithms that employ two distinct but related keys - a public key for encryption and a private key for decryption. They were developed to address issues with key distribution and digital signatures. The RSA algorithm, invented by Rivest, Shamir, and Adleman in 1977, is the most widely used public key cryptosystem. It relies on the computational difficulty of factoring large prime numbers and uses modular exponentiation to encrypt messages with a public key and decrypt with a private key.