Public Key Cryptography in Blockchain

Have you ever wondered what happens when you make transactions using cryptocurrency? What actually protects and ensures that the assets you’re sending to someone is delivered without the need for an intermediary overseeing the process? 

This whole process is only possible because of public key cryptography and they are responsible for the outer layer security of a network when funds are being moved on blockchain. 

Crypto keys are classified under public and private, here we’ll be looking specifically into public keys to enlighten you on everything you need to know about this foundational technology that no crypto transaction can do without.

What is a Public Key? 

A public key is one half of a system of secure communication called public key cryptography. It is a unique number that works alongside a private key, while the public key encrypts data, the private key decrypts data.

The public key is freely accessible to you if you have a  special number and it can be used to send messages to a receiver, this message is encrypted and can only be accessed through the private key that is linked to the corresponding public key.

How do Public Keys work?

To make this easier to understand, let’s  imagine a public key to be a special lock you can drop messages in.  Everyone can see and use this lock. When you want to send a secret message to someone, you simply drop your message in the lock  (public key) thereby locking up the  message. 

Once the message is locked with their public key, only the recipient’s private key (the matching key to the lock) can unlock and read the message. This makes sure that only the receiver’s private key can open and read the message.

The security of a public key is made sure through arduous math problems that would require a hacker to  figure out huge numbers or solve tricky curve equations. So even if others see the locked message only the recipient can open and understand as these mathematical puzzles problems are complex and take up time and computational power to crack. 

Public keys also serve as a validator for digital signatures. Just like how a signature confirms the identity of the signer, a digital signature created with a private key can be verified using the matching public key.

Role of Public and Private key during crypto transactions 

When you’re receiving cryptocurrency, the sender has to make use of  your public address that is obtained  from your public key. The public key goes through a unique process to generate this address  called hashing which involves converting the public key into a shorter, fixed-length string of characters that represent the user’s address.

This address serves as the  destination address for the transaction. The blockchain network then uses your public key to verify transactions involving your address.

Before your sender makes the transactions, the transaction needs to be digitally “signed” with a private key to be completed. This signature is a confirmation that the owner of this wallet wants to transfer funds to you.

Once the wallet sends the signed transaction to the cryptocurrency network, special computers  check the signature to make sure it’s valid. They also confirm that the sender has enough cryptocurrency to cover the amount they wish to transfer, this process is known as public key encryption.

Uses of Public Key Encryption 

Public key encryption has various  applications that ensure our online interactions are  safeguarded across various platforms. 

Some of these uses are:

Digital Signatures

This technology is used to create digital signatures. Just like how a signature verifies transactions on a cheque, this digital signature provides a way to verify the authenticity and integrity of digital messages or documents ensuring the message has not been altered and indeed came from the claimed sender.

Secure Transactions

Public key encryption is vital in online transactions to secure networks especially in ecosystems like cryptocurrencies and online banking. 

It ensures that a user’s personal data of their account is protected in e-banking and that only the rightful owner of a cryptocurrency wallet can authorize transactions from that wallet.

Secure Communication Protocols

Public key encryption is important in the establishment of secure communication channels in an insecure network like the internet. 

Public key encryption allows two parties who have never communicated before to securely exchange messages without sharing a secret key beforehand; this is seen in protocols like HTTPS, SSH and SSL.

Key Exchange

Public key encryption facilitates secure key exchange between parties. This means two parties can share private information through the use of an agreed key that does not have to be shared directly between both users.

Types Of Cryptography Keys

Various keys serve essential purposes in cryptographic algorithms, which enables encryption, decryption, digital signatures, and other cryptographic operations.

Here are some cryptographic keys  and their properties:

Symmetric Keys

A symmetric key uses a system of a single key that is shared between two parties.This key is used for both encryption and decoding. 

This key system is a fast and effective way to transfer assets between two parties. 

The sender and receiver need to share the secret key securely and both have a copy of the symmetric key, once transactions are carried out, this key is used on both ends to encrypt and decrypt data.  

Asymmetric Keys

Asymmetric key cryptography makes use of two dissimilar  keys, one a public key and the other a private key, both keys are connected  using complex mathematical equations. 

Unlike in a symmetric key where a single key is used for encryption and decryption, in an asymmetric key, the private key is used for decryption,  while the public key is used for encryption of data.  

Digital Signature Keys

In a digital signature key, a special signature is created using a private key which is then validated by the corresponding public key; this is done to ensure the authenticity of digital documents.

Key Exchange Keys

If there is ever a need to exchange symmetric keys between parties, an asymmetric key is used to securely communicate the keys between parties without fear of external influence. 

Hashing Keys

Hash keys are a special type of key that are not used in the encryption and decryption of data. 

You can use them to restructure data in a fixed size code known as the hash value which is unique to the input data. The hash key is also used to validate data, securely store confidential data and authenticate passwords.

Summary

We’ve been able to spotlight a cornerstone of blockchain technology that serves as a solution to security problems of traditional transaction platforms. 

Public Key Cryptography adoption in cryptocurrency has fostered transparency and made blockchain  tamper-resistant, reasons why it is one of the most secure means of transferring assets in  modern age. 

Looking ahead, the evolution of public key cryptography in blockchain promises further innovations that will pave the way for scalable, and secure decentralized applications.