Cryptography plays an important role in determining the security of transactions made on a Blockchain network. Encryption has been used in data security for quite some time now. It provides us with a simple way to secure and share data. In Blockchain, cryptography serves the same purpose. It helps make data storage and sharing on Blockchain networks safer for everyone. In this article, we are going to discuss the role of cryptography in Blockchain to help you understand how it secures all the transactions in a Blockchain network. So, without further ado, let’s dive into it!
What is Cryptography?
Before we get into how cryptography is used to achieve transaction security in Blockchain, let’s talk a bit more about cryptography itself. As we mentioned above, cryptography has been around for quite some time. Cryptographed data can be sent and received without having to worry about data being intercepted and viewed by someone who is not meant to access it. Cryptographed data can only be read and processed by selected parties.
The cryptography process works by encrypting data before storing or sharing it. If you see encrypted data, it won’t make any sense to you. In order to access it, the recipient needs to have the cryptographic key that is used to decipher data. Anyone who does not have this key cannot decipher data and gain access to it.
It's interesting to note that cryptography has been around long before the digital era. In fact, people have been using methods to cipher and decipher data for millennia now. There are records that show how Egyptians used to "encrypt" messages with the help of puzzles. Throughout history, different civilizations have made use of different methods to make messages and information secure from unwanted eyes.
The word “crypto” itself is of Greek origin. It means “secret” and has been used to describe the process of securing data and making it accessible to a select few throughout history. Now that you have got a basic understanding and brief history of cryptography, let's analyze its role in the Blockchain.
Cryptography In Blockchain:
Cryptography and Blockchain technology are deeply interrelated. When Bitcoin first came out back in 2008, it was named "cryptocurrency". Cryptocurrencies make use of encryption to prevent the chances of double spending and make transactions independent from third-party interference.
In Blockchains, 2 types of encryption methods are commonly used. Both methods have different types of keys and encrypt/decrypt data in their own way. These encryption methods include Asymmetric Key and Hash Function. Let's take a look at both of these encryption methods in detail.
1- Asymmetric Key
Asymmetric keys make use of 2 keys that are related in a mathematical way. One key is called a public key, while the other is known as a private key. The public key can be shared with anyone without having to worry about your data being intercepted by unwanted parties. A good example of a public key can be the address of a cryptocurrency wallet. Users can freely share this with one another to make transactions without having to worry about anyone actually accessing the contents of their wallets.
Private keys are used to gain access to data protected using asymmetric key cryptography. Private keys exist in the form of usernames and passwords and are only held by the owner of a crypto wallet. In order to decrypt data, one must have access to both the public and private keys.
2- Hash Function
The hash function works by taking an input value and converting it into a numerical value with a fixed length. This function can be used to take any form of text and turn it into a unique string of characters. Blockchains use the hash function to encrypt transactions. All transactions are turned into complex strings that need to be solved in order to decrypt data.
Data encrypted through the use of a hash function can be decrypted with the help of data that is made available in the header of a block. This data consists of:
The hash used in a previous block
Market root hash
Once the hash has been solved, it is compared with the target hash. If it is equal to or less than the target hash, it is accepted as a solution. Upon acceptance, the block becomes part of the Blockchain, and the miner receives a reward.
It’s important to note that miners need to carry out a trial-and-error run before beginning the process. Through trial-and-error, they are able to identify a string of numbers that can be used as a nonce. Once this has been determined, the miner can begin focusing on the nonce of a previous block in the Blockchain.
Cryptography plays an important role in Blockchain technology. In a decentralized network where data is viewable by everyone, it’s important to ensure that data is kept secure and accessible only to those it is meant for. Every block in a Blockchain is connected to one another through encrypted data. Users can safeguard their data with the help of public and private keys to make sure that they can carry out transactions in a safe manner. You can learn more about cryptography and how it can be used to safeguard your activities on Blockchain networks by contacting one of our Blockchain experts. Also, if you want to integrate Blockchain technology into your business environment, we are here to help.
Here at IIInigence, we stand proud as the best Blockchain Development agency in the USA, offering a wide range of services, including Blockchain consultancy as well as cryptocurrency, smart contract, dApp, Decentralized Marketplace, and Metaverse development. We have been into Blockchain development for 10 years, and we have successfully completed several massive projects in diverse sectors, including insurance, supply chain, real estate, gaming, etc. You can check out our portfolio and testimonials to get a better idea of our expertise as well as the quality of our work. Simply contact us today, and schedule a call with one of our experts to see how we can help you fulfill your goals.