For some people, it could be confusing to differentiate between cryptography and blockchain technology. Both are of different technological innovations but are similarly related in their operational functionalities.
In the past, the ancient Egyptian medium of conveying confidential information was the use of the “Caesar cipher” at that time in the Roman empire. This medium of communication thus birthed cryptography.
Cryptography is derived from the word “Crypt” meaning “hidden” and “Graphy” meaning “writing”. This however implies communication amid adversaries. Also, it is the medium of securing information through the use of codes.
The cryptographic algorithm used in the world of cryptocurrency and blockchain to secure end-to-end encrypted messages is applied using key cryptography which is used to secure transactions between two parties and is categorized into two;
This is the first key cryptography in the blockchain network. It requires the use of a single key by both parties to encrypt and decrypt messages. Also known as the single key algorithm that the sender uses to encode and the receiver uses to decode data.
This method is seen as the easiest and fastest way to convey information. Although the downside to this method is that it requires a lot of keys to interact with other persons or nodes, making it prone to attackers. A common example of symmetric keys in the system is the Data Encryption System (DES).
Asymmetric cryptography, also called a public key, uses algorithm key pairs. A private key is owned by only the sender of the encrypted message and a public key for both the sender and the receiver to validate that the transaction is coming from that particular node.
Note that both the sender and the receiver have their private key for encryption and decryption of messages respectively. An example of asymmetric cryptography is the Elliptic Curve Digital Signature Algorithm (ECDSA) used by Bitcoin.
In recent times, however, the application of cryptography is more advanced in different areas of our daily lives, which include cybersecurity, healthcare, voting, military operations, finance, and commercial purposes. Encrypted data are encoded to process information without the control of a centralized government. This makes it secure in the system of cryptocurrency where software like bitcoin is secured with the use of Blockchain technology.
A blockchain wallet is a virtual software like Bitcoin and Ethereum used to store transactions or private and public keys. The wallet is just a medium of transaction but the data and digital currency are stored in the blockchain. Subsequently, the digital signature guarantees authentication of each transaction made from a channel. It is like an emblem used to validate a node sending information.
Blockchain is simply a collection of logs in a chain sequence. These logs are ledger forms recording transactions from the beginning to the current state of transactions. These blockchains are connected with hash values and timestamps with the encrypted data in the blocks.
For example, simplifying with the contemporary use of checkbooks referred to as a ledger. For a transaction to be carried out, It requires the serial number of the checkbook and a timestamp indicating the time of the transaction, and also the imputed data of the owner of the transaction and the issuer. This makes up the blockchain with the help of cryptographic technology in securing this software.
Therefore it is safe to say that
This is the most unique feature in the history of blockchain technology where there are no third parties in control of the system. Information is conveyed privately with encryption which only the sender and the receiver can decipher. This means no central authorities can interfere with these operations. A common example of centralized authority is the government and the central bank in the finance sector.
Before a transaction is carried out, it must pass through the governing body for approval while for a decentralized system such as the blockchain transactions are owned and governed by you and controlled by yourself.
Blockchain is widely distributed over a wide range of networks of computers, each user or organization has its copy and makes changes to it. This change however is prompted by validation from other CPU networks connected to the system. This shared communication enables it to sight an attacker easily or a malicious act.
The distributed ledger via the nodes is connected to this chain of blocks for easy recording and sharing of synchronized transactions.
Blockchain is a distributed ledger, it is difficult to alter the data or change information present in the blocks. This data present cannot be deleted or undone making it immutably safe. Unlike the traditional database headed by a centralized authority, databases are updated or altered for specific reasons.
This provides some sort of integrity and simplified auditing in the world of cryptocurrency. The ability to produce a complete history of transactions without alteration and validation of block data through its corresponding hashes.
Due to the cryptographic technology implied in blockchain innovation, it is assumed to offer a higher rate of a secured network. Trusting the cryptographic algorithm between these peer-to-peer networks only the two persons involved can decipher the encrypted data.
In the mining area where new blocks have to be added as proof-to-work done in the blockchain. The blocks are usually validated using this hash code to compare to the previous blockchain. The chain with the longest length is however added to the newly created block hence mining is achieved and secured.
At this point, it is difficult for attackers to manipulate the system because of the cost and hardware required to perform these operations. Hence the proof-of-work system is secured.
The decentralized nature of blockchain makes it readily available for two parties to communicate at any given time, without a third party interference. Blockchain transactions occur between the sender and the receiver.
The transparency of the P2P system via blockchain technology enables organizations and enterprises to thrive without a centralized authority prying into their business, making it a secured system.
Both cryptography and blockchain technology are inherently useful in today's digital world for securing information or data. It is safe to say the future depends on cryptography and its application to our daily lifestyles such as health, military operations, enterprises, finance, digital currency, and social media networking. It is gradually outweighing the harmful purposes through the hindrance of malicious operations.