In recent times, the use of cryptocurrencies has gained huge popularity. People worldwide highly access cryptocurrencies such as Bitcoin because of its secure, decentralized and anonymous nature. Supporting the peer-to-peer architecture lets you transfer funds and other digital assets easily between two individuals without the central authority. Even some countries have legalized the use of cryptocurrencies for shopping and others activities.
Do you ever think about the aspect behind the working of cryptocurrency without any issues regarding authenticity and due diligence? It is nothing but cryptography. The concept and tools of cryptography is forming the backbone of cryptocurrency processing. Keep reading to have an Overview Bitcoin’s Cryptography.
Cryptography – What it Does Mean?
Cryptography is the computational and mathematical practice of encoding and decoding data. Here, the term “crypto” means secret. It is the field of math encompassing various methods for maintaining privacy and digital security. In simple words, it is the process of communicating securely and safely in the insecure environment. The message you want to send is converted to the ciphertext, which appears to be gibberish unless you are aware of the secret to unlocking it. Two types of cryptography are in use such as symmetric and asymmetric.
Bitcoin is the well-known cryptocurrency as it makes access to cryptography to implement the decentralized monetary system. Then, it enables peer-to-peer payments completely. Cryptography is now accessed in all electronic devices to protect sensitive information and then verify the digital identity. Besides, telecommunication networks, social media, and governments for reliable security.
Brief Cryptography Overview
Historically, cryptography utilized to send a secret message to protect the information. Messages encrypted systematically in a way that only the recipient of the message knew the exact way to decrypt. The encrypted message might is intelligible similar to battle plans. The intended recipient only knew the code to decrypt it and read the message. Encryption and decryption were laborious tasks historically and reserved only for securing the communication lines of the military.
The advent of the computer made it much easier to do and encrypt/decrypt the message in milliseconds. The speed and convenience of computer have led to the adoption of cryptographic methods for more than encrypting messages. Apart from encrypting messages, most cryptography is accessed to verify the validity of information and proves one’s identity via digital signature. It is extremely challenging to distinguish between two identical sites, which belong to the bank without modern cryptography. It gives way for the thief and intruders to access your bank detail and steal money. The same applies to cryptocurrency transactions. As Bitcoin transactions are irreversible, it is quite impossible to get your money once it is lost.
Major uses of cryptography
Cryptography is linked with the process of converting plain text into unintelligible text. It is the typical method of storing and transmitting data in a specific form. Only those who know the secret code can read and process the data. So, it protects and safeguards the data and information from alteration or theft. It is also accessed for user authentication. Modern cryptography usually concerns with integrity, confidentiality, authentication, and non-repudiation. It is widely accessed in several applications such as banking transaction cards, ecommerce transactions and computer password.
Techniques accessed in cryptography
When speaking about the Overview Bitcoin’s Cryptography, there is room surely for the techniques utilized. It is because these techniques ensure the safety and security of bitcoin transactions.
Symmetric key cryptography
Here, both the sender and receiver share the same and single key. The sender accesses this key to encrypt the plaintext and then send the ciphertext to the receiver. On the other hand, the receiver applies the similar key to decrypt the message and then recover the plain text.
In this algorithm, no specific key is accessed. The fixed-length hash value is always computed according to the plain text. This value makes it impossible for the contents of the text to be recovered. It is accessed by several operating systems to encrypt the passwords. Hashing is widely accessed and used to verify the integrity of data of transactions on the important network. It also maintains the structure of the blockchain data and then encodes the account addresses of people.
Public key cryptography
In the past hundreds of years, public-key cryptography is the revolutionary and popular concept. It has two related keys such as public and private keys. Public keys are distributed freely while it is often paired with the private key that often remains secret. Here, the public key is accessed for encryption, whereas the private key is used for decryption.
This method assists a lot in achieving the two major functions for cryptocurrency transactions encryption and authentication. The former is achieved as the public key and used to verify the paired private key for the genuine and verified sender of the message. However, the latter is accomplished because the paired private key can decrypt the encrypted message easily. Elliptical curve cryptography is the most used asymmetry for bitcoin keys.
Reasons to use Elliptic curves
- Elliptic curves are not only the major type of public-key cryptography. It is well known and useful alternatives for RSA. The major benefits of the elliptic curves make it well suited for the systems such as Bitcoin. The most compelling reason to access the elliptic curve is that it needs the smaller key to achieve the same level of security offered by the RSA.
- Elliptic curve needs the key of 256bits, whereas RSA needs a key of 3072 bits to achieve the equivalent level of security. These things may not seem much, but it is completely within the context of the cryptocurrencies. Each transaction is added to the blockchain, and then every single transaction needs one or more digital signatures. Over time, the 2816bit savings add up.
- Since Elliptic curve cryptography becomes the vital part of the Bitcoin system, it renders the platform for secure transactions without trust. Rather than, it relies on the public key cryptography’s provable mathematics, and thus, it helps you secure the entire transactions. The use of mathematical methods makes the users participate in the peer-to-peer protocol and decentralized protocol for money.
How does bitcoin’s cryptography work?
The working of bitcoin’s cryptography is much similar to defense level communication followed by the army. There, the communication line is kept secure and encrypted. Additionally, the message sends between the soldiers’ on the combat mission. The intended participants often receive the message rather than being open to everyone. As a result, it helps the Army people to complete the mission safely. This is the exact scenario followed in case of the cryptocurrency cryptography. Here is the Overview Bitcoin’s Cryptography.
Let it be much simpler to make ease of understanding. Cryptography is the major techniques to send secure a message between two or more participant. With the help of a key, the sender encrypts the message and then sends the encrypted form of the message to the receiver. Then, the receiver decrypts it to generate the original text. So, you will understand the importance of encryption keys in the aspect of cryptography. These keys may look simple but make the data value or message unreadable from the unauthorized and illegal reader or recipient.
The intended recipient has only access to read and process the cryptography. Overall, keys make the whole information secret. It avoids too many hassles and troubles when making transactions. Many cryptocurrencies, including Bitcoin, may not explicitly access sending such secret and encrypted message. However, most of the information, which involved Bitcoin transactions, is public to a specific extent. Some tools were also developed as the vital part of cryptography. Tools such as digital signatures and functions of hashing found working majorly in cryptocurrency. It plays a vital role in the bitcoin process even though the bitcoin does not access any hidden messages.
Understand the role of encryption and Bitcoin
The bitcoin network and database itself never use any encryption. As a distributed and open database, the blockchain has no requirement to encrypt the data. Usually, all the data passed between the Bitcoin nodes are unencrypted. It lets strangers interact and communicate over the Bitcoin network. But, some of the Bitcoin Services want more privacy and security to make their Bitcoin transactions trouble-free.
At this point, the use of the Bitcoin wallets comes in. It helps the users to store the private keys safely. Bitcoin wallets often encrypt the data with the help of different encryption schemes. The user requires to enter the specific password to decrypt the Bitcoin Core wallet. The password is accessed as the decryption key here. So, encryption of the key keeps the Bitcoin safe and secure.
After going through the Overview Bitcoin’s Cryptography, you will get some idea of how cryptography helpful in making cryptocurrency transactions. It lets you to understand the importance of cryptography in the cryptocurrency. It also gives you enough confidence to do bitcoin transactions the next time when you make it. Thus, it ensures peace of mind for the users.