What is Cryptography?
Computer science is the basis for applying cryptography in Bitcoin and other cryptocurrencies. Cryptography is a crucial element in electronic communications because it is the foundation for security, accuracy, and authenticity. When combined with computer processing power, cryptography provides high-level information security; it ensures that electronic communications are trustworthy.
Computers provide quick processing needed to facilitate cryptocurrency transactions. A significant currency exchange needs high-speed computer processing to manage the volume of daily transactions. Digital currencies and the blockchains that support them use encryption to protect data.
The Vault Must-Have Keys
Encryption takes plain text and puts it into an unreadable state using a code. A cipher is a key to unravel the code and return it to plain text. But the process of decoding must be limited to those intended to see the plain text data. Encryption keys are the codes that permit access to encrypted information.
Keys make it possible to enter data and to receive data in a reliable form. Encryption keys can be symmetric or asymmetric. Symmetric key cryptography is a type of cryptography that uses one key to load and unload the plaintext data. Symmetric keys can be shorter than asymmetric keys and operate at higher speeds. Asymmetric cryptography uses two keys, one that may be made public while the other remains secret or private. Widespread use of asymmetric cryptography is in systems called public-key cryptography.
Encryption must be long enough to be secure and short enough to have a manageable processing time. The first types of encryption used relatively small sets of codes. The early stages used a 128-bit format. The advanced encryption standard or AES uses a more complex set of codes and a 256-bit pattern. The use of the longer string of code raises the difficulty of guessing or forcing the code to astronomical odds. At the 256 bit level, the computing time required to crack the code would exceed human lifespans using the most advanced quantum computing methods.
Part of assuring that data is authentic is a digital signature. The process adds the sender’s private key to the data. The algorithm assigns a hash value to the data to produce a signature. This data goes to a verifier.
The verifier feeds the data and key into the verification algorithm to produce value as output. When received, the verifier runs the same hash function on the collected data to generate value. The receiver can compare the two values and decide whether the signature is valid. Notably, once the sender signs with its private key, the action is not deniable since only the sender has the private key.
As cryptography grew to protect more and more valuable information, the potential for attacks also grew. Cryptography needed extra layers of protection. As cryptography grew to support digital transactions, the need for speed became critical. Hashing served both goals.
There is a particular class of algorithms that help protect systems called hash functions. These functions are layers of security that also help speed up processing. Hashes are codes that capture inputs of various sizes and produce standard outputs. Hashing functions only work if they are resistant to attempts to solve them. They must be pre-image resistant on two levels and able to reduce the number of collisions. The advanced hash function uses a 516-bit format and offers strong defense to attacks.
Cryptography Is Essential
Cryptography is a foundation element for digital currencies. The advances in cryptocurrency and the blockchain technology made digital currency possible. An understanding of digital currency must include some idea of the role of cryptography.