Blockchain and encryption stand as two revolutionary technologies in today’s scenario. They are versatile in themselves. But have you ever thought about how the intersection of the two technologies can do wonders? If yes, let us explore the working of the two revolutionary technologies together.
Blockchain technology has taken the world by the craze. Its implementation in cryptocurrency is the talk of every town, and you must have also put your ear to it. You know blockchain as a decentralised ledger system, keeping your cryptocurrency secure and valid.
But have you ever wondered what makes cryptocurrencies secure? You can go a little further in your thought process. The answer is as simple as encryption. Encryption of data is what plays a major role in blockchain technology.
What is encryption?
Encryption is the key to securing cryptocurrencies. It is the process of converting plaintext into ciphertext and reversing the same to prevent unauthorised access. Now you might wonder how this process can secure data related to cryptocurrencies.
Plaintext is the readable format of data, understandable to all. So, if the data is stored in plaintext, it gives a heads-up to the hackers for unauthorised access. The only way to prevent it is to convert the data into an unreadable format, known as ciphertext. You can call it a coded data form, making it difficult for third parties to access it.
Cryptography in blockchain uses encryption as a way to secure data and systems. It provides accessibility to only authorized parties, and the key to decoding the data lies in their hands.
How does cryptography make blockchain secure?
You must have noticed the term ‘cryptography’ in the previous section. Cryptography is a versatile tool or method used to ensure secure transactions in the blockchain.
Blockchain uses two techniques to protect the users’ privacy and keep their transactions secure, Cryptography and Hashing. Cryptography is the process of encrypting data in a P2P network. Hashing, but secures the information in a block.
Hence, cryptography ensures the security and integrity of transactions in a blockchain. It provides the decryption key only to the authorised users in a transaction. Cryptography also restricts double-spending in a blockchain network.
How does encryption work?
As explained earlier, encryption converts plaintext into ciphertext to secure transactions. You may need clarification about how the process actually works. Well, encryption uses algorithms and keys to carry out such conversions.
Algorithms used in encryption are mathematical formulae used to convert plaintext or readable data into ciphertext or random coded data. The algorithms take plaintext as input and return ciphertext as output.
The algorithm used to encrypt data also generates a key. The key is used to retrieve the plaintext from the ciphertext, a process known as decryption. You might wonder if the key is a password to decrypt the data.
A key is a random sequence or string of letters and numbers that go as an input in encryption algorithms. The strength of algorithms determines the security of data in a blockchain network.
What are the types of cryptography?
Cryptography or encryption in blockchain technology uses different types of algorithms to strengthen the security of blockchain transactions. The two types of cryptography mainly used in blockchain are symmetric and asymmetric encryption.
Symmetric key encryption, also called secret-key encryption, uses a single key for the encryption and decryption of data. It is used for data encryption and to secure website connections.
Data Encryption System or DES is the most widely used symmetric key algorithm. Symmetric cryptography comes into play when the encryptions must be done in bulk. The advantage of using this encryption algorithm is that it is fast and consumes less computational power.
Asymmetric key encryption, on the other hand, is the most widely used algorithm in blockchain cryptocurrencies. Unlike symmetric key encryption, it does not have the same key for encryption and decryption.
It has two public and private keys for encryption and decryption, respectively. The public key in the encryption process is accessible to all. It helps in the transfer of information between unknown parties in a blockchain.
But, the decryption key is private and accessible only to authorized users meant to receive the data or message. The private key helps in the verification of digital signatures.
If you are unaware, there lies a relationship between the private and public keys. It goes on to make the blockchain network secure between the sender and the receiver. While it is possible to derive the public key from the private key, the private key can not be derived from the public key.
Though asymmetric key encryption has many advantages and finds use in website server authentication, it consumes much execution time. But, it stands as an effective algorithm for sharing secret keys of the symmetric key algorithm.
What are the benefits of cryptography in blockchain?
Cryptography is a blessing in the field of blockchain. The fact that it utilizes encryption goes way beyond securing transactions and user privacy in a blockchain. So let us discuss the benefits of cryptography in blockchain.
• Encryption: If it isn’t obvious till now, cryptography encrypts the transactional data in the blockchain. Its conversion of plaintext into ciphertext restricts any unauthorised access to the data. Hence, it protects users’ information by converting it into random unreadable data.
• Security: Security is another feature you can enjoy through cryptography. As mentioned earlier, it uses algorithms and keys to encrypt data in a blockchain. The use of public and private keys makes sure only authorized users get access to the data. Hence, every transaction you make in a blockchain is private and secure with you.
• Immutability: Immutability is also possible through cryptography, an essential blockchain feature. It makes it possible to link different blocks together in a blockchain and makes the stored data reliable. Immutability ensures there is no possibility of deriving valid signatures based on previous queries. Thus, it prevents attackers from getting access to your data.
• Scalability: Scalability is one of the most important features of a blockchain. It allows numerous transactions to be recorded over the network with high security. Moreover, the irreversibility of transactions through cryptography provides users with a reliable digital ledger in the blockchain. The accuracy of the decentralised general ledger is what blockchain runs on.
• No hacking: Data hacking is the most threatful event associated with online transaction systems. But cryptography or data encryption in a blockchain leaves no scope for hackers. It uses digital signatures to provide access and alterations in data. On altering the data, the digital signature remains no longer valid. These factors make the transactions secure over a blockchain and prevent hackers from accessing it.
What are the limitations of cryptography?
The union of encryption and blockchain is undoubtedly a revolution in itself. It comes with many advantages. But even this could be better. Cryptography in blockchain also has some disadvantages that we must pay attention to. Hence, let us focus some light on the drawbacks of cryptography.
• Difficulty in accessibility: Cryptography makes accessing data over the network difficult. Though it is advantageous, keeping in mind the unauthorised access, it may also prove disadvantageous in cases of critical decision-making. Strong encryption and digitally signed data may not be easily accessible during an emergency. Moreover, any unauthorized attack on the network can disrupt it completely.
• Expensive: considering the monetary factors, cryptography proves to be an expensive technology. It requires immense investments to set up and maintain public keys. Moreover, sending and receiving messages over a blockchain adds to the costs.
• Complex: the complexity of mathematics involved in cryptography for its implementation in blockchain makes the network vulnerable. It needs a great handling potential for everything to stay on track.
Conclusion
Blockchain and encryption stand as two revolutionary technologies. They are changing the world for good and making daily life easier and more secure, especially regarding digital transactions. Blockchain uses encryption to change readable information into an unreadable or coded form, difficult to be accessed by intruders.
Hence, the intersection of the two technologies is all set to provide a decentralised general ledger system that keeps your data and transactions secure. Hence, you can sit back and use blockchain with utmost privacy and security.
