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Discover more about the technology that all cryptos are based on!
With the growth and development of the cryptocurrency industry, more and more people are interested in the crypto market. In order to become an advanced crypto trader, special knowledge is needed. First of all, it is important to know how cryptocurrency is created and the main principles of its functioning. When it comes to privacy, Internet security, and data encryption, the term “cryptography” is often used. As any of the cryptocurrencies are based on cryptographic technologies, you need to know what it is. In the article, we explain what is cryptographic science and how it applies to the cryptocurrency market.
What is cryptography?
Begin with the meaning of cryptography. Cryptography is the science of mathematical methods of providing confidentiality and authenticity of the information. The subject of cryptography is information, methods of encryption, and secure transmission of messages. Moreover, cryptography develops and studies the algorithms used to encrypt and decrypt messages in an insecure digital environment. The science also examines the identification, authentication (verification), and integrity of data. It also studies the use of cryptographic methods in the context of a cryptosystem. Cryptographic science has developed as there was a need to transmit important information in the most reliable way. Then, the written form of the document was modified so only the initiated person could understand the content. Thus, cryptography provides the security of the content by encryption. It is done by special cryptographic algorithms used by the sender and recipient.
According to the scientists, important messages and military orders were encrypted using cryptography both in the Roman Empire and in the Middle Ages. Julius Caesar used a very simple form of cryptography for his messages, known as the shift code. Each letter in his text was replaced by the third following in the alphabet. Thus, instead of A, they wrote D. The recipient had to know the cipher code to read the words. During World War II, special devices were used to encrypt messages. Cryptography has become much more complex, so it took the military several years to figure the keys out and read messages from other countries.
Elliptic curve cryptography (ECC)
Elliptic curve cryptography (ECC) is widely used in the crypto eco-systems. It employs the mathematical properties of elliptic curves to generate public-key cryptographic systems. ECC is based on mathematical functions that are simple to compute in one direction, but very difficult to reverse like all public-key cryptography. In the case of ECC, this difficulty resides in the infeasibility of computing the discrete logarithm of a random elliptic curve element concerning a publicly known base point, or the “elliptic curve discrete logarithm problem” (ECDLP). Furthermore, the Elliptic Curve Digital Signature Algorithm (ECDSA) is a widely-used signing algorithm for public-key cryptography, employing ECC. However, the benefit of ECC is characterized by the fact that the speed of elliptic algorithms is much higher than that of classical algorithms.
Hashing and Digital signatures
Moreover, the traditional principles of cryptography have a wide range of functions. The most important cryptography features are hashing and digital signatures. Hashing is a crypto method of converting large amounts of data into short pieces.
It is a key component of blockchain technology concerning the protection and integrity of data in the system and is used to:
- verify and confirm users’ balances;
- code wallet addresses;
- code transactions between wallets;
- mine blocks.
A digital signature confirms your identity on the network. Digital signatures represent mathematical functions that map to a specific wallet. By attaching a digital signature to the transaction, you prove to all network users that the transaction is yours. Digital signatures are used to get a wallet address and are secretly linked to the wallet’s public and private keys. Your public key is the equivalent of your bank account, while the private key is your PIN. It doesn’t matter who knows your bank account number. Having known your bank account number, users can deposit money into your account. But do not let anyone know your PIN. Since the digital age has led to an increase in the complexity of encryption, computers triggered a dramatic increase in computing power. Due to the increasing computing power of computers, cryptography has become much more complex.
However, cryptography can provide a better level of information security today. Wherever confidentiality is concerned, cryptography is important. If you log in to the site with your password, it is usually encrypted. Moreover, encryption is also used by various messengers. To prevent you from being overheard during a phone call, the phone may also be encrypted. Cryptography is also used in blockchain technology and the cryptocurrency market.