Cryptography: Combination of Maths and Computer Science in Cryptocurrency
Bitcoins, Ethereum, and other altcoins represent an entirely new way of transferring and exchanging assets and values and displaying proof of ownership. The decentralized tokenization platform opens the door to investing in intangible assets such as stocks, bonds, and works of art — as well as tangible assets such as real estate and cars — enabling users to invest in something that represents their interests without having to deal with banks or centralized platforms.
But what is the technology behind cryptocurrency
Cryptography is a discipline that studies methods of encrypting and decrypting information or data, as well as systems for digital signatures, techniques for message authentication and verification. Cryptography is vital to the cryptocurrency ecosystem — it ensures the security of transactions, protects your investments from double-spending, and helps to keep your private information private. In general, cryptography is a combination of maths and computer science.
How is blockchain technology related to cryptography
The blockchain is an anonymous, distributed, and digital ledger that can record transactions between two parties verifiable and permanent. Data stored on the blockchain exists as shared and tamper-resistant cryptographs. The blockchain contains a continuously growing list of records, called blocks, which are linked and secured using cryptography.
Why cryptography matters in the crypto world
Cryptocurrency represents the future of finance. Digital currencies are the next iteration of our modern monetary system, improving upon the stability and security of fiat currencies. The concept behind cryptocurrency is simple: to encode data into a form that cannot be forged or misread.
By using cryptography technology to secure financial transactions, cryptocurrency systems ensure that individuals have ownership over their digital funds while ensuring that transactions are processed in a transparent manner open for all to see. Let’s say you want to buy Ethereum: if your funds are not secured, you might be subject to crypto theft.
Private and Public ledger
A public blockchain is an open platform that anyone can join. Its code is accessible, free to use, and available for modification. It allows anyone to participate in the core activities of the blockchain network, such as verifying transactions or mining tokens. A private blockchain only allows registered participants to access the network. Its code is closed source and may not be used, modified, or redistributed without permission from its owners.
While public and private blockchain systems are similar in some aspects, their differences are just as apparent. Private blockchains are owned by single corporations or entities, which means that they can be vulnerable to malicious activities carried out by their owners. Public chains, on the other hand, are fully distributed and decentralized.
There are several different types of cryptography out there that use different methods for encryption. It is important to understand, however, that the level of protection a user needs on a given platform determines which type of encryption is right for them.
Symmetric Encryption Cryptography
In symmetric cryptography, the same secret key is used to encrypt and decrypt a message. This means that the sender and the receiver of the encrypted message must have agreed upon a shared secret key beforehand. In order to send an encrypted message to another person, you would have to share the secret key with them somehow. This is often done face-to-face or by exchanging a secret key electronically or through a secure storage location. It is the least safe type of cryptography, but it comes with reduced operational overhead.
Asymmetric Encryption Cryptography
In asymmetric encryption, a key pair is created: a public key and a private key. The public key can be disseminated openly because it cannot be used to decrypt messages encrypted by the corresponding private key. The keypair owners are the only one who has access to the private key. Using this method, a person can encrypt a message using the receiver’s public key, but it can only be decrypted using the receiver’s private key. It takes significantly more resources.
The third cryptography methodology used in the blockchain is hashing, which confirms the integrity of transactions between accounts. It maintains the structure of data on the blockchain, encodes user addresses, is an essential part of the encryption process that occurs between accounts, and makes block mining possible.
A significant aspect of cryptocurrencies is that they allow you to remain anonymous. Owners of cryptocurrency projects develop cryptographic techniques in order to ensure that all transactions and users remain concealed to the desired degree.