What is the Diffie-Hellman key exchange and what problem does it solve?

Diffie-Hellman is an asymmetric key agreement protocol that allows two parties to establish a shared secret key over an insecure channel without ever transmitting the key itself. Each party generates a private value, computes a public value using modular arithmetic, and exchanges public values. Each party then combines the other's public value with their own private value to independently derive the same shared secret. This shared secret is then used as a symmetric encryption key.