Everything You Need to Know About Cryptography in Blockchain

Blockchain is one of the most ground-breaking technological innovations and has provided an effective platform for a secure & decentralized data exchange. Cryptography in Blockchain is a type of internet security that is used to provide security and helps users maintain data on the web providing credibility and data security. Digital encryption techniques act as core elements of blockchain technology assuring the security of user information and safeguarding user transaction information.

In this newsletter article today, we're going to discuss "Cryptography Blockchain" and its detailed fundamentals. In our previous session, we discussed the features of Hyperledger Fabric v.2.5.0 which you can check out here. Let's get started with our today's newsletter!?

Importance of Security in Blockchain

Let's understand the significance of security in blockchain before understanding the fundamentals of blockchain cryptography.?As we know, Blockchain is a type of technology that refers to a decentralized ledger database that possesses the features of security, immutability, traceability, reliability, and decentralization. It cancels out the need for traditional approaches for maintaining nodes for new users and has come up with a new approach to maintaining central nodes.?Therefore, the factor of security is indeed an essential aspect to add value and credibility to the blockchain network.

What is Cryptography in Blockchain??

Crypto in the term 'Cryptography' refers to 'secrets' and hence cryptographic techniques are aimed at ensuring complete or partial anonymity. The primary purpose of cryptography in the blockchain is to safeguard against double-spending, ensure participants' security, and prevent the influence of external authorities on users.?Cryptography technologies make use of mathematical codes for storing and transmitting data values in a more secure format. To clearly understand the application of cryptography in blockchain, let's take a simple example.?

Cryptography is a technique that ensures the secure transmission of data or messages between the sender and receiver. The transmitting information is encrypted by the sender using a specific key & algorithm. The receiver upon receiving the same decrypts it to get the original message. The entire stated process of cryptography is executed by using encryption keys.?

Types of Cryptography in Blockchain

Let's take a quick look at the types of Cryptography in Blockchain.

1. Symmetric Cryptography: In this type of Cryptography, an encrypted code/key or cipher is used to translate given information into cipher. It was the first cryptography ever used and here both the sender and receiver use the same key for encryption as well as decryption. This technique is known to be quite straightforward and can process data quickly. To ensure the integrity of encryption keys, the other type of cryptography comes into play as explained further.?
2. Asymmetric Cryptography: As the name suggests, in Asymmetric Cryptography different keys are used between the sender and receiver to encrypt and decrypt the information respectively. With this technique, two keys namely public and private keys work together to transmit the information. While sending the message, the public key is used for encryption, and to decrypt, a private key is used to unlock it. Also in the case when someone adds a set of digital signatures with private keys, anyone online can decrypt it using their public key.??
3. Cryptographic Hashing: Next, the third type of Cryptography is "Hashing" where any plain set of text can be turned into a cryptographic hash (a unique string of data) by using cryptographic algorithms. After sending data through a cryptographic hashing, it can't be reversed and hence it holds a distinguished significance other than the above two cryptography techniques. The hashing process can also be used to compress the data into a small string of text and hence can help in reducing a large chunk of data.??

Cryptography in Blockchain: Stated Benefits

Cryptography in Blockchain comes up with the following benefits.?

- Reliability: As mentioned earlier, cryptographic hashing is an irreversible process and therefore nobody can undo the process. In this way, all the users can rely on the information accuracy for the digital ledgers.???

- Security: Now another crucial benefit of Cryptography is Security. Cryptography techniques act as a key to the security of digital ledgers and with hashing process blockchain records root hashes with each transaction. In case of tampering, the hash is completely changed leading to the indication that data has been compromised.?

- Scalability: Hashing and cryptographic techniques facilitate unlimited transitions to be recorded securely across the network.?

Final Words

Today, we learned all about Blockchain security and the significance of cryptography techniques to ensure the security, credibility, and reliability of data in the given network. The process of Cryptography makes the core foundation for blockchain to be built and facilitates us with the tools to encrypt data, store data securely, and transmit cryptocurrency securely.??