To understand how MySQL uses SSL, it is necessary to explain some basic SSL and X509 concepts. People who are familiar with these concepts can skip this part of the discussion.
By default, MySQL uses unencrypted connections between the client and the server. This means that someone with access to the network could watch all your traffic and look at the data being sent or received. They could even change the data while it is in transit between client and server.
When you need to move information over a network in a secure fashion, an unencrypted connection is unacceptable. Encryption is the way to make any kind of data unreadable. Encryption algorithms must include security elements to resist many kinds of known attacks such as changing the order of encrypted messages or replaying data twice.
SSL is a protocol that uses different encryption algorithms to ensure that data received over a public network can be trusted. It has mechanisms to detect any data change, loss, or replay. SSL also incorporates algorithms that provide identity verification using the X509 standard.
X509 makes it possible to identify someone on the Internet. It is most commonly used in e-commerce applications. In basic terms, there should be some entity called a “Certificate Authority” (or CA) that assigns electronic certificates to anyone who needs them. Certificates rely on asymmetric encryption algorithms that have two encryption keys (a public key and a secret key). A certificate owner can show the certificate to another party as proof of identity. A certificate consists of its owner's public key. Any data encrypted with this public key can be decrypted only using the corresponding secret key, which is held by the owner of the certificate.
For more information about SSL, X509, encryption, or public-key cryptography, perform an Internet search for the keywords in which you are interested.