Blockchain and asymmetric cryptography
Blockchain technology makes it possible to solve business problems in ways that were previously impossible. A major enabler of this is the decentralization of the blockchain’s digital ledger.
Blockchain’s decentralization works because many of the functions of a centralized authority — such as maintaining the integrity of the ledger — are replaced with cryptography. Asymmetric or public key cryptography is a key part of what makes blockchain technology possible.
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Asymmetric cryptography in the blockchain
Asymmetric cryptography is useful because it uses two different keys: a private key and a public key. The private key is used for signing messages and decrypting data, while the public key is used for validating signatures and encrypting data.
The use of asymmetric keys makes public key cryptography ideally suited for blockchain technology. Actions taken using the private key can be validated using the corresponding public key. Blockchain technology uses asymmetric cryptography for identity management and transaction authentication.
Public key addressing
One of the main benefits of blockchain technology is that it’s pseudonymous. Blockchain users don’t need to reveal their true identities to create an account on the blockchain or to use it.
Instead, individual blockchain accounts are identified using addresses. These addresses are derived from public keys, which are associated with private keys.
This use of addresses for identity works because of digital signatures. When creating a transaction with a blockchain account, the user has to digitally sign the transaction with their private key. Once this transaction has been sent to the rest of the blockchain network, anyone can verify the signature with the corresponding public key, proving that the transaction is authorized by the owner of the account (or someone with knowledge of their private key). This makes it possible to authenticate transactions without the need to reveal the identity of the owner of an account.
Digitally signed transactions
Transactions are what make the blockchain run. They can be used to send value between different accounts or specify code that should be executed on a smart contract platform.
Every transaction on the blockchain is digitally signed. This provides a couple of different benefits:
- Transaction authentication: A digital signature proves that someone with knowledge of an account’s private key performed any transactions associated with that account. This is important because transactions can carry real value, and blockchain users don’t want other people spending their money.
- Anti-spoofing: The blockchain’s digital ledger is decentralized, meaning that there is no official copy. Each node in the blockchain network keeps a copy of the digital ledger. Since all transactions are digitally signed, it is impossible for anyone to spoof or modify a transaction without the corresponding private key. This protection is vital to ensuring the integrity and correctness of a distributed and decentralized digital ledger.
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Securing the blockchain
The blockchain is designed to be a trustless system where cryptographic algorithms and incentives provide the same guarantees that a central authority would regarding the digital ledger.
Asymmetric cryptography is vital to ensuring the correctness and integrity of the blockchain’s digital ledger.
Sources
In this Series
- Blockchain and asymmetric cryptography
- How does hashing work: Examples and video walkthrough
- How does encryption work? Examples and video walkthrough
- Planning for post-quantum cryptography: Impact, challenges and next steps
- Beginner’s guide to the basics of data encryption
- Structures of cryptography
- Role of digital signatures in asymmetric cryptography
- What is homomorphic encryption?
- Encryption and etcd: The key to securing Kubernetes
- Quantum cyberattacks: Preparing your organization for the unknown
- An Introduction to asymmetric vs symmetric cryptography
- Breaking misused stream ciphers
- Entropy calculations
- Security of the PKI ecosystem
- Elliptic curve cryptography
- Methods for attacking full disk encryption
- Introduction to Public Key Infrastructure (PKI)
- Introduction to the TLS/SSL cryptography protocol
- Introduction to Diffie-Hellman Key Exchange
- Introduction to the Rivest-Shamir-Adleman (RSA) encryption algorithm
- Introduction to full disk encryption
- 8 reasons you may not want to use VPNs
- Rivest Cipher 4 (RC4)
- Understanding stream ciphers in cryptography
- Cryptography Errors
- Understanding block ciphers in cryptography
- How to mitigate Credential Management Vulnerabilities
- How To Exploit Credential Management Vulnerabilities
- Poor Credential Management
- How Is Cryptography Used In Applications?
- Decrypting Downloaded Files
- Introduction to hash functions
- Introduction to Asymmetric Cryptography
- The Advanced Encryption Standard (AES)
- Fundamentals of symmetric and asymmetric cryptography
- Case Studies in Poor Password Management
- The ultimate guide to encryption key management
- Principles of cryptography
- Encryption vs Encoding
- Introduction to Cryptanalysis
- Secure Credential Management
- Introduction to Blockchain
- Blockchain Technology
- Virtual Private Networks (VPNs)
- Public Key Infrastructure: Architecture & Security
- Hash Functions
- Asymmetric Cryptography
- Fundamentals of Cryptography
- Symmetric Cryptography
- Introduction to cryptography
- Best tools to perform steganography [updated 2020]
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