Cryptography in Blockchain

Cryptography in Blockchain

How cryptography is used to secure and power blockchain technology.

Cryptography in Blockchain

Cryptography is a great way to keep your data safe from any unauthorized access. In the blockchain, it is used to secure transactions between two nodes in a blockchain network. Cryptography and hashing are the two main concepts used in the blockchain. Cryptography is used to encrypt messages in a peer-to-peer network, and hashing is used to secure the block information and link the blocks in a blockchain. Cryptography mainly focuses on protecting the participants, transactions, and preventing double-spending. It helps make sure that only the intended individuals can access, read, and process the transaction data.

Role of Cryptography in Blockchain

Blockchain has been built with a variety of cryptographic principles, which can be a barrier to further progress in its development.

  • Cryptography plays a major role in the blockchain, helping to protect user privacy and transaction information while also keeping data consistent.

  • Cryptography is made up of two core technologies: symmetric encryption and asymmetric encryption.

  • Asymmetric cryptography uses digital signatures to verify transactions. Every transaction is signed by the sender with a digital signature, making sure that the data is not corrupted.


Cryptography helps to keep your information secure while communicating with others.

Some terminologies related to Cryptography:

  • Encryption: The process of transforming regular text into a random string of bits.

  • Key: a string of characters used within an encryption algorithm for altering data so that it appears random.

  • Decryption: The process of decrypting a random sequence of bits to reveal the plaintext.

  • Cipher: This cryptographic algorithm is a mathematical function that converts plaintext into a random sequence of bits, known as ciphertext..

Types of Cryptography

The two types of cryptography are:

  • Symmetric-key cryptography.

  • Asymmetric-key cryptography.

Symmetric-key Encryption:

Symmetric key encryption is a great way to secure website connections and encrypt data. It uses the same key for both encryption and decryption, which is why it is sometimes called secret-key cryptography. The only challenge is making sure the sender and receiver exchange the key securely. Popular symmetric-key cryptography systems include Data Encryption System (DES) and Advanced Encryption Standard (AES). Whoever is given the secret key can then use it to decrypt the data.

Point to remember:

  • Both parties have the same key to keeping secrets.

  • It is suited for bulk encryptions.

  • It requires less computational power.

Asymmetric-key Encryption:

This cryptographic method uses different keys for the encryption and decryption process. It utilizes public and private key methods, which allow completely unknown parties to share information, such as email IDs. The private key helps to decrypt the messages and verify digital signatures. The mathematical relation between the keys is that the private key cannot be derived from the public key, but the public key can be derived from the private key. Examples of this method include ECC and DSS.

Points to remember:

  • It is known as Public-key cryptography.

  • It is often used for sharing secret keys of symmetric cryptography.

  • It requires a long processing time for execution.

  • Plays a significant role in website server authenticity.

Wallets And Digital Signatures

Blockchain wallets are a secure and convenient way to store your private keys and track your transaction balance. Unlike traditional wallets, blockchain wallets don't actually store currency - instead, they are used to communicate with other users in order to carry out transactions. The actual currency is stored in blocks on the blockchain.

Creating a digital signature is a simple and secure way to prove that you are a legitimate node in the blockchain network. By combining the transaction data with your private key and using a special algorithm, you can generate a unique digital signature. This process ensures that your identity is verified and the data is kept safe.

Cryptography Hash Function in Blockchain

Cryptographic hashing is one of the most impressive uses of cryptography. It doesn't require the use of keys but instead creates a unique 'footprint' of a transaction. This is done by adding a hash to the block and then combining or making new hashes. This combined hash is known as the 'root hash'. Popular hashing functions include MD5 and SHA-1, which help to link the block and maintain the integrity of the data. Any alteration to the data in the block will cause the blockchain to break.

Points to remember:

  • For a particular message hash function does not change.

  • Every minor change in data will result in a change in a major change in the hash value.

  • The input value cannot be guessed from the output hash function.

  • They are fast and efficient as they largely rely on bitwise operations.

Benefits of Hash function in Blockchain:

  1. Prevent the modification in the data block.

  2. Make verification of the transaction easier.