Blockchain Cryptography Mechanisms
Blockchain technology uses cryptography for secure communication, data integrity, and trust in decentralized networks. Blockchain uses mathematical concepts and cryptography to verify every transaction without a central authority.
The following are the primary Cryptography Mechanisms employed by blockchain:
Cryptographic Hash Functions
Definition and Properties
Using a cryptographic hash function to compute a somewhat unique, fixed-length output (also known as a message digest or hash digest) for input data of almost any size is known as hashing. Any modification to the input data will produce a hash digest that is entirely different. A different input that hashes to the same output is nearly impossible to find (second preimage resistant), and it is computationally impossible to calculate the original input value from a particular output hash (preimage resistant). Although they are irreversible, hash functions are made to be quick to compute.
Applications in Blockchain
- Chaining Blocks: Because each block in a blockchain contains the hash digest of the header of the preceding block, the blocks are cryptographically connected. Because tampering is immediately detected and rejectable, if a previously published block is edited, its hash will also change, resulting in different hashes for all subsequent blocks.
- Securing Block Data: Data within a block can be secured using hash functions, which hash the block data itself and put the digest in the block header.
- Unique Identifiers: Within the network, they are employed to generate distinct identifiers.
- Proof of Work (PoW): In PoW consensus models, publishing nodes, or miners, validate transactions and add new blocks by resolving computationally challenging problems utilising cryptographic hash functions. The task entails identifying a nonce that, when hashed with the block data, yields a hash that satisfies particular complexity requirements (such as beginning with a specific amount of zeros…).
- Address Derivation: Public keys are usually used to generate user addresses using a cryptographic hash function.
- Merkle Trees: Hash algorithms swiftly and securely verify massive volumes of data in these data structures. The Merkle root hash matches the entire structure, thus you can validate every transaction in a block without looking at each one.
- Common Hash Algorithms: Bitcoin and other blockchains employ SHA-256 extensively for security and integrity. Ethereum uses a version of Keccak (SHA-3). There is also reference to RIPEMD-160 as a hash function.
Asymmetric-Key Cryptography (Public-Key Cryptography)
Concept
Two mathematically linked keys are used in this system: a public key and a private key. Private keys must be kept confidential, whereas public keys can be freely exchanged. Determining the private key from the public key is not computer possible.
Functionality
Only the other key can decrypt data encrypted by one. Thus, strangers can build trust.
Applications
- Digital Identity: The creation of distinct digital identities (account addresses) for users in a decentralized system depends on public-key cryptography.
- Encryption/Decryption: Senders can use the receiver’s public key to encrypt messages so that only the recipient can decrypt them using their private key.
- Digital Signatures: The private key is used to digitally sign a transaction to verify the signer’s access.
- Key Exchange: Utilized for the safe establishment of symmetric encryption keys.
Common Algorithms
- RSA (Rivest–Shamir–Adleman): One of the early public-key cryptosystems used integer factoring difficulties. Although it generates signatures more slowly than some other options, it is widely supported and validates data more quickly.
- Elliptic Curve Cryptography (ECC): With shorter, quicker, and more effective cryptographic keys, this more recent and potent method picked up by Bitcoin and Ethereum offers security levels comparable to those of RSA. ECC is predicated on the discrete logarithm problem (ECDLP) for elliptic curves.
- Elliptic Curve Digital Signature Algorithm (ECDSA): Ethereum and Bitcoin’s current signature systems are based on ECC.
- Schnorr Signatures: Suggested as a Bitcoin upgrade over ECDSA, providing improved storage, scalability, and privacy.
- Edward-curve Digital Signature Algorithm (EdDSA): An updated, safer, and quicker version of DSA and ECDSA that relies on intractable discrete logarithmic problems and Edward curves.
Symmetric-Key Cryptography
- Concept: Both encryption and decoding are accomplished using a single secret key.
- Characteristics: Quicker than asymmetric-key cryptography in terms of computation.
- Limitations and Use: Mandates pre-shared keys, which means that in order for users to safely trade the key, they must already establish a trust relationship. Asymmetric cryptography is frequently used in conjunction with it, even though it is not the best option for decentralized systems with unknown participants. In this scenario, asymmetric keys are used to safely exchange a symmetric key, which encrypts the real data.
- Algorithms: The Advanced Encryption Standard (AES), Triple DES (3DES), and Data Encryption Standard (DES) are such examples.
Digital Signatures
- Purpose: A mathematical method that confirms a message, software, or digital document’s integrity, authenticity, and non-repudiation.
- Mechanism: Sender private keys encrypt message hash values. Anybody with the sender’s public key can verify the message’s integrity and origin. The communication was transmitted by the intended sender and was not tampered with during transit.
- In Blockchain: The network verifies the digital signatures that users create using their private keys on transactions.
Nonces
- Definition: In cryptography, an arbitrary number that is used just once is called a nonce (Number Once).
- Application: In Proof of Work, block data and nonces are mixed, and the hash produced is repeatedly hashed until it satisfies the network’s difficulty objective. In addition to ensuring computational effort, this stops replay assaults.
Advanced Cryptographic Constructs and Applications
- Zero-Knowledge Proofs (ZKPs): Give one party (the prover) the opportunity to demonstrate to another (the verifier) that a statement is true while keeping all other information under wraps. For anonymity on public blockchains, this is essential.
- Homomorphic Encryption: Permits the immediate execution of calculations on encrypted data without the need for decryption. On public blockchains, this might make it possible to process private data.
- Signcryption: In a single logical step, this public-key primitive offers both encryption and digital signature capabilities, frequently more effectively than doing so separately.
- Secret Sharing: A system for sharing a secret across several entities, with the combination of a specific threshold of these components being the sole way to reconstruct the secret.
- Commitment Schemes: It’s a primitive in cryptography that lets you commit to a value and keep it hidden from other people. Later, you can reveal the value you committed to.
- Ring Signatures: Permit a group member to sign a message on behalf of the group as a whole, but do not reveal the name of the signer. utilised by cryptocurrencies like Monero that prioritise privacy.
- Stealth Addresses: Created a new, distinct address for every transaction, which is used to conceal the recipient of a transaction.
- Confidential Transactions: To remain anonymous, hide cryptocurrency trading amounts.
Cryptographic methods enable blockchain technology’s immutability, security, integrity, and trust, allowing distributed users to transact and preserve a constant record without a central authority.