WHAT ARE SIM CARDS USED FOR

A SIM - short for Subscriber Identity Module - is a piece of plastic that slots into your  mobile phone.It acts as your unique ID and helps you  connect to, make calls over  a particular mobile phone network.Most SIM cards have a capacity between 32 to 128 KB.They store contacts and messages which can be transferred easily from one mobile to another.

SIM also stores the ‘key’ needed to decrypt data that is encrypted when voice is trransfered from a phone to another.A unique ID called the IMSI (International Mobile Subscriber Identity)  is used to connect someone calling your mobile number to your phone. GSM phones are the ones that utilize SIM cards .The most important bits of data include the IMSI (International Mobile Subscriber Identity) and the authentication key that validates the IMSI. This authentication key is provided by the carrier
SIM authentication goes like this:
On startup, the phone obtains the IMSI from the SIM card and relays it to the network,known as“request for access.”
The network takes the IMSI and looks in its internal database for that IMSI’s known authentication key.
The network generates a random number, A, and signs it with the authentication key to create a new number, B. This is the response it would expect if the SIM card is legitimate.
The phone receives A from the network and forwards it to the SIM card, which signs it with its own authentication key to create a new number, C. This number is relayed back to the network.
If the network’s number A matches the SIM card’s number C, then the SIM card is declared legitimate and access is granted.
 If the phone and SIM card do not match up, the phone won’t operate. This is what it means when a phone is “locked.”