Yes you haver been ripped off.
Sky encryption has not been hacked *
You want
Sky = you pay for it.
Selling stuff then pointing out you need additional bits of kit to make it work is an old scam. Write off the "investment" and learn your lesson from it - dont send this scammer any more money, as there will be something along the lines of "oh you need a left threaded whatsit as well. That will be 80 quid please".
(*) Or if it has those in the know are keeping it VERY quiet. Theres lots of rumours, but never any proof forthcoming.