Cryptographic Aspects of Block-chains and Bitcoins Summary

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Cryptographic Aspects of Block-chains and Bitcoins
Block-chain is a decentralized, traceable, and non-tamperable distribution database that integrates peer to peer protocol, a consensus mechanism and other technologies. The database departs from the traditional central node maintenance mode and instead opts for a technique of mutual maintenance by various users to achieve the appropriate information supervision among the users. The block-chain platform can be divided into three main categories: public chain, private chain, and alliance chain (Zhai et al. 1). The public chain is also called permissionless block-chain because it is not restricted to a specific group of users. In this application, anyone can engage in the maintenance and access of information on the block chain. Besides, it is easy to deploy the applications and one can also completely decentralize it without interference from the institution. The private chain, on the other hand, limits the qualification of the participating nodes. The alliance chain is operated by several institutions and requires registration permission.
Bitcoin is currently the most successful digital currency. Proposed by Nakamoto in 2008, it is also the most typical application of block-chain. In addition, the block-chain has increased the value of its application in various ways and has also shown a potential to shape the society. The block-chain technology was developed to facilitate the functioning of Bitcoin. Therefore, bitcoin was the first example of block-chain in action and it would not exist without block-chain. Therefore, even though bitcoin relies on block-chain technology as a digital currency, block-chain is more than just bitcoin. In a simpler language, a block-chain is a computer that helps store data (Marr). In more technical terms, it is a database containing a wide range of user information distributed across several computers. Bitcoin, on the other hand, is a decentralized digital currency or an electronic payment system, which users can use to make electronic payments or transfer the bitcoins without third party intervention.
Introduction to Cryptography
Block-chains have inner components that shape their workings. Among these inner components is cryptography, which refers to the protocols developed to bar third parties from accessing and viewing private data. Modern cryptography combines a variety of subjects for maximum efficiency. The key subjects include mathematics, computer science, engineering, and physics. The key terms used to explain cryptography include encryption, decryption, and cipher. Encryption is the process of encoding texts into an unreadable format. The purpose of encoding is to ensure that even if the information leaks to the outside, it will not be easy for the third party to understand the texts. Decryption is the opposite of encryption and entails conversion of the unreadable message into its initial format. A cipher refers to the algorithm that helps in the process of encryption or decryption. It mainly entails an outline of the steps necessary to either encrypt or decrypt the information. An example of such an algorithm is the Caesar Cipher, an encryption algorithm used by Julius Caesar to communicate with his troops. In this algorithm, every letter in a message is shifted by a specific amount. For example, using a shift of 3, letter A would become D whereas B would become E and so on. The coding of the messages ensured that the enemy could not understand their communication.
Before the modern age, cryptography was synonymous to encryption. Therefore, encryption came before cryptography and can be traced back to the ancient Egyptians with vast roots that are spread out in history. Its usage is associated with the use of hieroglyph, approximately 4000 years ago, which the Egyptians used to pass information through the hieroglyph. The method was used in a nonstandard way mainly to hide the meaning from those who could not decipher it (Damico). The Greek, on their part, had their own idea of cryptography, which was to wrap a tape around a stick and writer a message on the wound tape. The writing would become meaningless if the tape was unwound. However, the recipient of the message would possess a stick of a similar diameter, which he then use to decode the message. The recipient tried out sticks of different diameters until the message became readable. Cryptography never underwent significant transformations until in the middle ages, when it had been embraced by the western European governments.
Initially, the cryptographers used mono-alphabetic ciphers to decode the messages. However, one of the main transformation was when Leon Battista Alberti, popularly called “The Father of Western Cryptology,” introduced the polyalphabetic substitution (Damico). The technique involved using two copper disks that fit together. Each disk had an alphabet inscribed on it. A few words were inscribed on the disks and then the disks were rotated to alter their encryption. Consequently, it became impossible to use frequency analysis to crack the cipher. The polyalphabetic approach underwent several changes which were attributed to Vigenere. Rubin further confirms that that cipher disks usage continued through the Civil War (Damico).in 1918, the Vernam-VIgenere cipher was created by Gilbert Vernam with an aim of improving the broken cipher. However, the cipher created was not strong enough. Nonetheless, his efforts resulted in the development of the one-time pad, which utilizes a key word only once, and it proved its robustness. Whitman notes that cryptography was also used by criminals in the process of prohibition to communicate with each other.
The transmission of valuable data online faces several hurdles. Therefore, there are four key features that should guide the process of transferring this information includes: confidentiality, authentication, integrity, and non-repudiation. Confidentiality involves being able to keep information from access by the unauthorized persons. Authentication entails being able to verify that the other party is actually who they are and not an imposter. Integrity means that the data has not been altered or tampered in any way. Non-repudiation basically means that the person or an entity involved in an action has to take responsibility of the action. Therefore, the purpose of digital signatures is similar to the physical ones that people often use. These hand-written signatures are a form of non-repudiation. All these features help secure the information and ensure that unauthorized people cannot access it. Each of these characteristics is treated differently. Confidentiality is taken care of using encryption algorithms, such as AES. On the contrary, digital signatures helps in taking care of the other three properties.
Encryption Algorithms
There are two major types of encryptions: symmetric-key encryption and the public-key (asymmetric) encryption. In the former, the same key is applied in encrypting and decrypting data. The technique is efficient and employed everywhere in information security, starting from the hard drive to securing the user’s connection to a HTTPS website. The most common symmetric key algorithm is Advanced Encryption Standard (AES) (Lake). AES is currently the trusted US government encryption standard. The public-key encryption utilizes separate keys for the encryption and decryption processes. The public key is shared among different users whereas the private key has to be kept secret. This key depends on some special mathematical features and allows two individuals who have never met to exchange their details securely. However, it tends to be inefficient and hence only used to encrypt symmetric key, which in turn helps to encrypt the information.
Digital Signatures
The cryptographical approach that is currently widely embraced is the public key method. This public key encryption is mainly utilized in preparing digital signatures. A potential application is when a user wants to confirm the authenticity of a piece of data and whether it retains its integrity. All that the user needs to do is to send a digital signature together with the data. To develop the signature, the user first takes the information and subjects it to a hashing algorithm to produce a unique series of numbers. The numbers are then signed digitally using the ECDSA algorithm and the user’s private key. The hash and the user’s private key are combined using complex mathematical formula. The product is a public key that is verifiable using the user’s public key to confirm the ownership of the matching private key. Therefore, the digital signatures helps users to prove their ownership of the private key without the need to disclose it to another party. Therefore, when user A creates her digital signature, she sends it to her recipient, user B. User B receives the information, he provides to verify its authenticity, check its potential to retain its integrity, and determine whether it is non-repudiable. All these checks are conducted with the help of user A’s public key.
Hashing
Hashing refers to the process of sending information via a hash function with an aim of producing a specific unique hash of a fixed length. The cryptographic hash functions, such as SHA-256 helps the consumers monitor their routine transactions. The cryptographic harsh functions have some essential characteristics that make them useful. One of these is that they are deterministic, which means that if given a given input will always have the same output. Another notable feature is that the functions have each of their outputs essentially unique. This implies that the chances of the two separate inputs having the same output as significantly low that there is no need to worry about it. Thirdly, under the current techniques, it is impossible to identify the original input from the o...