The recent rave surrounding cryptocurrencies and the blockchain technology behind them is known to many. The cryptocurrency world has opened the doors to many avenues in digital currency and it can be expected that this trend leads to a lot more innovation.
One thing about cryptocurrency that is really amazing is the cryptographic technology that is in use within this system. This technology itself could signal a wave of change as the system of online ledger and verification is not only securer and more profound than what we have now, but is also crafted with the modern implications in mind.
With cryptocurrencies spreading across the globe at a rate of knots, it can be expected that the system behind them would become an integral part of our daily transactions in the future. Keeping this change in mind it is imperative that everyone has a basic understanding of the cryptography in use within cryptocurrencies.
Cryptocurrencies such as Ethereum and Bitcoin use a peer-to-peer decentralized system for conducting transactions. Since this process is completely online, there can be implications regarding the safety and privacy of transactions. Although, these transactions are assumed to be hackable and extremely volatile by many, the truth is contrastingly different. We will see how cryptocurrency platforms use cryptography and its numerous types to make these transactions really secure.
One of the most important tools use in cryptocurrencies is the cryptographical use of digital signatures. Digital signatures replicate the real life use of signature and implement it in the digital currency sphere of today. Users can benefit from digital signatures, since they keep intact the security of the users in the vast world of the internet.
- Digital Signatures prove the verification of a person. The signature verifies that it was you who signed the specific detail.
- The signatures are non-forgeable. No one else can forge your signature and use them to their own advantage.
Regardless of how intricate your signature is, there are always chances of forgery in the real world. Cryptography gives us a solution to this solution through digital signatures that are done through keys. To understand these signatures take place and how they are incorporated in the blockchain, we need to have a look at the cryptography behind them.
The use of cryptography is not new. In fact, encryption has been used on numerous instances for transferring information across different locations by our ancestors. Encryption is a major tool in the process of cryptography that is followed by these cryptocurrencies. It is the means by which messages are made unreadable for readers that it is not intended for. To put in simple words, the message is only understood by the sender and the recipient. This means that you encrypt your message using a key that is only known to the recipient. The message can only be understood after inputting the encryption key.