Homomorphism just means say I have a bijective function [1] f: A -> B and a binary operator * in A and *’ in B, f is homomorphic if f(a1*a2) = f(a1)*’f(a2). Loosely speaking it “preserves structure”.
So if f is my encryption then I can do *’ outside the encryption and I know because f is homomorphic that the result is identical to doing * inside the encryption. So you need your encryption to be an isomorphism [2]and you need to have ”outside the encryption “ variants of any operation you want to do inside the encryption. That is a different requirement to differentiability.
1: bijective means it’s a one to one correspondence
2: a bijection that has the homomorphism property is called an isomorphism because it makes set A equivalent to set B in our example.
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