Cryptography in Blockchain
Cryptography in short:
Cryptography is one of the most common forms of computer and data security. In Greek, kryptós means secret and graphó means writing so literal translation of Cryptography is secret writing. It uses Cypher to make information secret, an algorithm that converts plaintext into an obfuscated representation called Cyphertext. The process of converting a plaintext to cyphertext is called Encryption and the reverse process is called Decryption. Both encryption and decryption processes use keys to do and undo the cipher.
In the modern world, almost everything of everyday life happens over the internet. So, securing the massive amounts of personal data circulating the Internet is more important now than ever before. Now, cryptography is everywhere, from simple online chatting to classified military communications, all facets of information security heavily rely on Cryptography and encryption.
Offerings of Cryptography:
Now, let us understand the most basic services that Cryptography provides in terms of information security in transit and at storage.
Confidentiality — Make sure information is available to only authorized users.
Data Integrity — Ensures that information has not been manipulated during in transit or at rest
Authentication — Confirms the legitimacy of information or the identity of a user.
Nonrepudiation — Restrict a user from denying prior commitments or actions.
These are the four most important services offered by cryptography that have enabled the conduct of business using computer systems over the internet in an extremely efficient and effective manner.
How did Cryptography use in Blockchain?
As we know, Blockchains are widely distributed ledgers and aren’t controlled by any single entity, and everyone can view the transactions, but no one can change or revert the earlier transactions. In order to achieve these characteristics, blockchain utilizes two types of cryptographic algorithms, Public-key (asymmetric) cryptography, and Hash functions. And as we all know, till date the greatest real-world application of Blockchain is Cryptocurrencies, for example, Bitcoin, Ethereum, Litecoin, and thousands of other cryptocurrencies. The core idea of cryptocurrency is transferring value through a chain of digital signatures.
Asymmetric Cryptography:
Asymmetric cryptography uses a pair of keys (a string of characters that determines the functional output of a cryptographic algorithm) or a keypair for both data encryption and decryption processes. One of the major applications of asymmetric-key cryptography is Digital Signatures. Digital signatures are similar to handwritten signatures. A person can sign a receipt to verify that the information provided is correct and retains its integrity. Likewise, digital signatures ensure that the blockchain is valid and the data is verified and correct.
Hash Functions:
Hash functions take a major role in linking the blocks to one another and also to sustain the integrity of the transactions stored inside each block. It basically prevents any alteration in the block data that can lead to inconsistency and break the blockchain, eventually making it invalid. If someone tries to make any slightest alteration in the input to a hash function, it will end up returning a totally unrelated output as compared to the original output. Blockchains generally use the SHA-256 hashing algorithm as their hash functions. For example, the following outputs are generated by an online hash function with slightly different inputs;
Input: bitcoin
Lengths of Input: 7
SHA-256 Hash Output: 6b88c087247aa2f07ee1c5956b8e1a9f4c7f892a70e324f1bb3d161e05ca107b
Input: Bitcoin
Lengths of Input: 7
SHA-256 Hash Output: b4056df6691f8dc72e56302ddad345d65fead3ead9299609a826e2344eb63aa4
Input: Bitcoins
Lengths of Input: 8
SHA-256 Hash Output: aa0921d24d095df038a0c0a32eb0d644f1882e3a0a3d8814175c4e1cebbf84fb
Why Cryptography services are really important to organizations?
In a nutshell, Cryptography is the most effective and efficient mechanism to keep secret information away from adversaries. In other words, encrypting all our sensitive data traversing over the public network and protecting them from hackers. From every small business to billion dollars enterprises are trying to grow their online presence and thriving to reach every corner of the world. At the same time, adversaries, hackers, and imposters are continuously trying to exploit every possible vulnerability to make their illicit benefit out it.
And this is the most challenging situation for organizations to maintain the secrecy of their company’s and client’s data at storage as well as in-transit. Here Cryptography Services or Encryptions come to the rescue, by protecting an organization’s most sensitive data and securing its network connections. Organizations typically use a number of X.509 certificates which are primarily used for data-in-transit encryption and client-server authentication.
The topmost priority for any large and small organization is to protect customers’ data and avoid penalties and reputational damage after data breaches. This is why it is essential to have a plan in place to implement and maintain cryptography services and encryption algorithms to ensure data integrity and proper compliance.
Why blockchain can also be important for business?
Since Blockchain is a distributed ledger, with blockchain the data shared in the network is distributed in blocks, and it poses some significant advantages;
Transparency: Every participant can access the data
Decentralization: Cannot be controlled by any single unit
Immutability: Data can only be added to the database but cannot be modified or erased
Businesses need to notice these business benefits and embrace blockchain technology for its overarching possibilities. And these tremendous potentials of Blockchain can fulfill some extremely important business objectives.
Cost reduction: The greatest advantage of blockchain’s distributed ledger is reduced operational costs
Decentralization of data: The decentralization of data decreases risks of ultimate control of one party, that the centralized systems are prone to.
Better traceability: Tracing and investigation of the history of transactions are easier in Blockchain-based solutions
Credits:
What is cryptography? https://docs.aws.amazon.com/crypto/latest/userguide/awscryp-whatis-toplevel.html
How to Make Cryptography Services Work for Your Organization https://securityintelligence.com/posts/how-to-make-cryptography-services-work-for-your-organization/
3 reasons why blockchain is important for business https://www.tmcnet.com/topics/articles/2019/12/12/443996-3-reasons-why-blockchain-important-business.htm
How blockchain could affect manufacturing and R&D https://www.3dse.de/insights/article/how-blockchain-could-affect-manufacturing-and-rd/
Cryptography in Blockchain: Types & Applications [2021] https://www.upgrad.com/blog/cryptography-in-blockchain/#:~:text=These%20cryptographic%20features%20make%20it,and%20cryptography%20makes%20it%20possible.
SHA256 online hash function https://emn178.github.io/online-tools/sha256.html
