The basic principles of cryptography you should know

Everything from your smartphone to your banking relies heavily on cryptography to keep your information safe and your livelihood secure. Here are the basic principles of this science.

This article covers the basics of the science of cryptography. It explains how developers and networks can use cryptography to maintain the privacy in cryptocurrency space.

As you study cryptocurrencies, one day you will inevitably come across the term of “cryptography”. In the field of digital assets cryptography has many functions. These include data protection, use in creating passwords, banking system optimization, etc. In this article we will acquaint you with the basics of cryptocurrencies and discuss its meaning for cryptography.

History of cryptography

Cryptography is a method of safely concealing information. To disclose information, the reader needs to know how the information was changed or encrypted. If a message has been properly encrypted, only the sender and the recipient can read it.

Cryptography is not new, it has existed for thousands of years. Historically, cryptography has been used to send important messages to hide them from the public. The first cryptographic messages were found in ancient Egyptians, but the proven use of ciphers for strategic purposes dates back to the Ancient Roman era.

According to historians, Julius Caesar used cryptography and even created the so-called Caesar cipher to send secret messages to senior generals. This method of protecting confidential information from unwanted eyes is heavily used in modern military.

During World War II, the Germans used the Enigma encryption machine to send important information. Alan Turing, mathematic and genius after whom the Turing test was later named, found a way to crack it. The Enigma hack is now considered one of the major turning points in World War II.

The fundamentals of cryptography

The Caesar cipher mentioned above is one of the easiest ways to encrypt messages, useful for understanding cryptography. It is also called the shift cipher because it replaces the original letters of a message with other letters in a specific position relative to the original letter in the alphabet.

For example, if we encrypt the message through the +3 cipher in English, then A becomes D and K becomes N. If we use rule -2, then D becomes B and Z becomes X Example: read everything on invest in blockchain can be transformed into uhdghyhubwklqjrqlqyhvvlqeorfnfkdlq. This is the simplest example of cryptography, but any other method is built on similar logic. There is a message that is secret to all but the interested parties and a process to make it illegible to all except the sender and the recipient. This process is called encryption and consists of two elements:

• An encryption — a set of rules that you use to encrypt information. For example, the X shift in the alphabet in the Caesar cipher example. The cipher does not have to be kept secret, because the message can only be read if the key is present;
• The key — a value that describes exactly how to use the encryption rule set. For the Caesar cipher it will be the number of letters to shift alphabetically, for example +3 or -2. A key is a tool for decrypting a message.

This way, many people may have access to the same cipher, but without the key they still cannot break it.

The process for sending a secret message is as follows:

• Side A wants to send a message to side B, but it is important that no one else reads it;
• Side A uses a key to convert text into an encrypted message;
• Side B gets the encrypted text;
• Side B uses the same key to decrypt the encrypted text, and can now read the message.

Evolution of cryptography

Messages are encrypted to protect their content. This implies that there will always be parties interested in receiving this information. Since people are somehow successful in decrypting various codes, cryptography has to adapt. Modern cryptography is far more advanced from the usual shift of letters in the alphabet, offering the most complex puzzles that are increasingly difficult to solve each year. Instead of a trivial shift, letters can now be replaced by numbers, other letters, and various symbols, passing through hundreds and thousands of intermediate steps.

The digital age has led to an exponential increase in encryption complexity. This is due to the fact that computers have brought with them a dramatic increase in computing power. The human brain is still the most complex information system, but when it comes to performing calculations, computers are much faster and can process much more information.

Cryptography of the digital age is related to electrical engineering, computer science and mathematics. Nowadays, messages are usually encrypted and decrypted using complex algorithms created using combinations of these technologies. However, no matter how strong encryption is, there will always be people working to break it.

Cracking the code

You may notice that even without a key, Caesar’s cipher isn’t that hard to crack. Each letter can only take 25 different values, and for most values the message makes no sense. With trial and error, you can decrypt the message without much effort.

Breaking the encryption using all possible variations is called a brute-force search. Such a hack involves selecting all possible elements until a solution is found. With increasing computing power, a brute-force search becomes an increasingly realistic threat, the only way to protect against which is to increase the complexity of encryption. The more possible keys, the harder it is to access your data.

Today’s ciphers allow for the use of trillions of possible keys, making it less risky to access your data. However, it is claimed that supercomputers, and especially quantum computers, will soon be able to crack most ciphers with the help of brute-force search because of their unrivaled computing power.

As mentioned earlier, decrypting messages becomes more and more difficult over time. But nothing is impossible. Any cipher is inherently linked to a set of rules, and rules in turn can be analyzed. The rules are analyzed by a more delicate method of decrypting messages — frequency analysis.

With the huge complexity of ciphers these days, effective frequency analysis can only be performed using computers, but it is still possible. This method analyzes recurring events and tries to find the key using this information.

Let’s take another look at Caesar’s cipher example to find out. We know that the letter E is used much more often than other letters in the Latin alphabet. When we apply this knowledge to an encrypted message, we begin to look for the letter that is repeated most often. We find the letter H is the most frequently used and test our assumption by applying the -3 shift to the message. The longer the message, the easier it is to apply frequency analysis to it.

Cryptography and cryptocurrencies

Most cryptos serve a completely different purpose than sending secret messages, but despite this, cryptography plays a key role here. It turns out that the traditional principles of cryptography and the tools used for it have more functions than we used to think. The most important new cryptography functions are hashing and digital signatures.

Hashing

Hashing is a cryptographic method of converting large amounts of data into short values that are difficult to fake. It is a key component of blockchain technology regarding the protection and integrity of data flowing through the system.

This method is mainly used for four processes:

• Verification and validation of user wallet balances;
• Encrypting the wallets’ addresses;
• Encryption of transactions between wallets;
• Mining of blocks (for cryptocurrencies that assume this capability) by creating mathematical puzzles that need to be solved to get the block.

Digital signatures

A digital signature is, in a sense, the equivalent of your real signature and serves to confirm your identity online. When it comes to cryptocurrencies, digital signatures represent mathematical functions that are matched to a particular wallet.

Thus, digital signatures are a kind of way to digitally identify your wallet. Applying a digital signature to a transaction, the owner of a wallet proves to all participants of a network that the transaction proceeded from it, instead of someone else.

Digital signatures use cryptography to identify the wallet and are secretly linked to the public and private keys of the wallet. Your public key is the equivalent of your bank account, while your private key is your pin code. It doesn’t matter who knows your bank account number, because the only thing they can do with it is to deposit money into your account. However, if they know your pin code, you may have a real problem.

In a blockchain private keys are used to encrypt the transaction and the public key is used to decrypt the transaction. This is possible because the sending party is responsible for the transaction. The sending party encrypts the transaction with its private key, but it can be decrypted with the recipient’s public key because the only purpose of this process is to verify the sender. If the public key does not work when decrypting the transaction, the transaction is not executed.

In such a system, the public key is distributed freely and is secretly associated with the private key. There is no problem if the public key is known, but the private key must always be kept secret. Despite the correlation of two keys, calculation of the private key requires incredible computing power, which makes hacking financially and technically impossible.

The need to protect the key is the main disadvantage of this system. If someone becomes aware of your private key, they will be able to access your wallet and make any transactions with it, which already happened to Bloomberg when one of the employees’ keys was shown on TV.

But don’t worry — there are no amount of computing power in the whole world to crack a single private key in Bitcoin blockchain. That is why first cryptocurrency is considered one of the most secure systems of all times. Owning Bitcoin makes your wealth protected from any threat regarding cybercrime or theft. Just keep your cold wallet in a safe place and earn BTC on a daily basis with our Bitcoin cloud mining platform Hashmart.io!