What is Cryptography?

Category: Crypto Payments Regulatory

In cryptography, the word “crypto” translates from Greek as “secret.” So that gives you a pretty good idea of what entails this field of study. It is a study and practice of sending secure, encrypted information between two or a few parties. By sending an encrypted message, the sender conceals its content from a third party, and by receiving a decrypted message, the message becomes legible to the recipient again.

Cryptocurrencies use cryptographic technology to enable anonymous, secure, and trustless transactions. That means that you do not need to know a thing about people to transact with them safely – and there is no need for a bank, credit card company, or government to act as a trusted intermediary. There’s also the fact that cryptography isn’t just important for digital money – our computers and the networks to which they’re connected are always encrypting and decrypting data that is being transmitted through them, from every Google search you perform to every email you send.

Why is cryptography important?

Cryptocurrency is entirely dependent on the concept of cryptography. For example, an anonymous group of people denominated Satoshi Nakamoto imagined bitcoin in the form of a whitepaper posted in 2009 to a cryptography message board as a proposal by a pseudonymous person (or group of people).

The double-spend problem that Nakamoto solved was the most difficult one that he had to resolve. In the absence of any hardware, a person may make and spend multiple copies of the Bitcoins they have made. Originally, the solution that Nakamoto proposed was based on a well-known technique known as public-private key cryptography.

The public-private key encryption technology used in Bitcoin (as well as Ethereum and many other cryptocurrencies) is called public-private key cryptography. The benefit of using this type of system is they can be “trustless,” – and their transactions can be safe as there is no middleman to act as an intermediary like a bank or Paypal.

How does public-private key encryption work?

All Bitcoin network users are issued a private key (basically a bunch of really strong passwords) from which a linked public key can be cryptographically generated. There is no restriction on sharing your public key with others. All they need to do is send you bitcoins. However, a private key is required to access those funds.

It is part of bitcoin’s revolutionary nature that it addresses the double-spending problem by using a network of peer-to-peer computers to verify transactions’ authenticity using cryptographic methods.

By taking a string of data and processing it through an algorithm, you will generate your public key from your private key. This is done by a method called hashing. Unfortunately, there is virtually no way to reverse this process, which means that no one will ever figure out the private key from the public key.

The network knows that its public and private key are linked, so it can confirm that the bitcoin belongs to you, and it can ensure that your bitcoin will remain yours as long as you can access your private key.

Due to the lack of an intermediary, another benefit of using Bitcoin is that the transaction is irreversible (since a credit card company will not know if you did something wrong). But one thing should be noted here: these are a feature, not a bug: permanent transactions are an essential part of the solution to the double-spend problem.

It is not just the Bitcoin blockchain that is part of the solution, which is a giant, decentralized ledger, similar to a bank’s books of account, that documents and updates every single transaction made on the Bitcoin blockchain computer networks are constantly updating.

Cryptography techniques

There is a close relationship between cryptography and cryptology and cryptanalysis discipline. These include techniques such as using microdots, combining words with images, and other methods to hide information while it is being stored or transported. Although cryptography has many different applications, in our computer-centric world today, it is mostly used for converting plaintext (the text that is in plain sight, also known as cleartext) into ciphertext (a process known as encryption) and then converting it back into plaintext (referred to as decryption). A cryptographer is a person who practices this field on a day-to-day basis.

As far as modern cryptography is concerned, it aims to achieve the following four objectives:

  • Confidentiality. The information will not be understood by anyone who has no business understanding it.
  • Integrity. It is required that the information be altered during the storage processor while it is in transit between the sender and the intended recipient. This is because it will be detectable.
  • Non-repudiation. The creator or sender of the information can’t deny that they intended to create or transmit the information at a later stage.
  • Authentication. A sender and a receiver must verify each other’s identities and the origin and destination of the information being sent.

A cryptosystem is generally considered to contain procedures and protocols that apply to some or all of the criteria outlinedematical procedures, computer programs, and software are often thought to be the most important parts. In addition, however, they also encompass the regulation of human behaviors, such as choosing hard-to-guess passwords, unplugging systems that don’t need to be used, and not discussing sensitive details with outsiders.

Cryptographic algorithms

The cryptograms or ciphers used in cryptosystems assist in ensuring the security of communications among computer systems, devices, and applications using a set of algorithms known as cryptographic algorithms.

It is important to distinguish that a cipher suite comprises one algorithm for encrypting the message, another for authenticating the message, and another for exchanging the keys. This process has two main components, embedded in protocols and written in software, that operate on operating systems (OSs) and networked computers.

Types of cryptography

There are two different algorithms for encrypting and decrypting data. The single-key algorithm or symmetrical encryption algorithm creates a fixed length of bits called a block cipher, with a secret key that the creator or sender uses to encrypt the data and the receiver uses to decrypt it again. Advanced Encryption Standard (AES) is one of the popular examples of symmetric-key cryptography. This specification was originally developed by the National Institute of Standards and Technology (NIST) and is now regarded by the Federal Information Processing Standard (FIPS 197) to protect confidential data. The standard has become a popular standard that the U.S. government stipulates in the private sector.

Earlier this year, the U.S. government approved the use of AES for the encryption of classified data. AES is a royalty-free standard implemented in hardware and software worldwide. The Advanced Encryption Standard (AES) is the successor to the Data Encryption Standard (DES) and DES3. It uses longer key lengths, 128 bits, 192 bits, and 256 bits, to prevent brute force attacks and other types of attacks.

What is the difference between symmetric and asymmetric cryptography?

In symmetric cryptography, a single key is used to encrypt and decrypt information. However, there must already be a shared key between the sender and the recipient for the operation to take place. Developing asymmetric cryptography came about because of the complexity of the key distribution problem.

It is important to understand that asymmetric cryptography uses two different keys for encryption and decryption. There are both public and private keys for all users in an asymmetric cryptosystem. The private key must be kept secret at all times, but the public key can be freely distributed.

It is necessary to know that only a private key can be used to decrypt data that has been encrypted with a public key. To send a message to John, the message must be encrypted using John’s public key. John is the only one who has the key to decrypt the message since he is the only one who has access to it. Data encrypted with a private key can only be decrypted with a public key that corresponds to that private key. If Jane had her public key, she would decrypt any message digitally signed with her private key. Anybody with Jane’s public key would be able to verify that it was Jane who sent that particular message.

This method tends to be very fast compared to other encryption methods (e.g., using an entire disk partition or database) and is perfect for encrypting large amounts of data. However, compared to symmetric encryption, asymmetric encryption is much slower and can only encrypt smaller data pieces than the key size (usually 2048 bits or less). Therefore, asymmetric cryptography is usually used to encrypt the symmetric encryption keys, which then encrypt much larger blocks of data using symmetric cryptography. It is generally the case that asymmetric cryptography is used to encrypt only the hashes of messages rather than the entire messages in the case of digital signatures.

The generation, exchange, storage, use, revocation, and replacement of cryptographic keys are part of the key management processes in a cryptographic system.

What problems does cryptography solve?

For a system to be secure, there must be several assurances such as confidentially, integrity, data availability, and authenticity and non-repudiation. These assurances can be provided by cryptography when it is used correctly. For example, with cryptography, data in transit and data in storage can both be protected from unauthorized access. In addition to providing authentication between senders and recipients, it can also protect against the revocation of the message.

There is no doubt that most software systems have many endpoints, typically many clients and one or more back-end servers. Communication between the client and server takes place over unreliable networks. Most Internet communication occurs over open, public networks, such as the Internet, or private networks that malicious insiders or outside attackers may compromise.

The communication can be protected if it traverses untrusted networks. An adversary may attempt to carry out at least two types of attacks on a network based on their information. In passive attacks, the attacker listens to a segment of the network and reads sensitive information as it passes over the segment. The passive attacks may take place either online (where an attacker reads traffic in real-time) or offline (where an attacker captures traffic in real-time and views it later-perhaps after spending some time decrypting it). As a result of an active attack, an attacker assumes the identity of a client or server, intercepts communications in transit, and views and modifies the contents before handing them off to their intended target (or deleting them altogether).

Several cryptographic protocols such as SSL and TLS offer confidentiality and integrity protections against malicious eavesdropping and tampering of communications. In addition, by providing authentication protections, the systems can ensure that the users communicate with the systems as intended. For example, if you want to send your password for online banking to your bank, are you doing so, or are you sending it to someone else?

In addition to protecting data in transit, it is also useful for protecting data in rest. For example, suppose a removable disk or a database containing sensitive data is lost or stolen. In that case, the data on the disk or database can be encrypted to prevent the loss of sensitive information. Furthermore, it helps ensure the integrity of data in transit and at rest and detect malicious tampering.

What are the cryptography principles?

There is one important principle to remember when designing your cryptosystem, and that is that you ought never to design it yourself. It has been reported (for instance by Phil Zimmerman and Ron Rivest) that the world’s most brilliant cryptographers have created cryptosystems that have serious security flaws. To be deemed “secure,” a cryptosystem must be heavily scrutinized by the security community before it can be called such. Don’t rely on security through obscurity or the fact that an attacker does not know your system to obtain security. Keep in mind that malicious insiders and determined attackers may attempt to break into your system.

For a cryptosystem to be secure, the only things that should be kept secret are the keys themselves. You should take the necessary steps to ensure that any keys you use are protected. It is not recommended to store encryption keys and the data they protect in plain text. This would be similar to locking your front door and placing the key under the doormat as an analogy. When someone attempts a break-in, this is the first thing they will notice. From the least secure to the most secure methods of protecting keys, here are three that are commonly used:

Ensure that your keys are stored in a filesystem and protected with strong access control lists (ACLs). Make sure you follow the principle of least privilege when storing your keys.

Ensure that you encrypt your data encryption keys (DEKs) with a second key-encryption key (KEK). To generate the key, password-based encryption (PBE) should be used. For example, using a password known to a minimum number of administrators, a key can be generated using a cryptographic algorithm such as Bcrypt, Scrypt, or PBKDF2 and used to boot the cryptosystem. You won’t need to ever store the key unencrypted anywhere else by doing this.

Hardware security modules (HSMs) are a type of hardware appliance that can be used to store keys securely in a tamper-resistant fashion. In addition, some APIs can be called from code to an HSM when keys are needed, or decryption of data can be performed directly on the HSM when needed.

You should make sure that the algorithms, key strengths, and methods of operation you use are aligned with industry best practices. For example, the Advanced Encryption Standard (AES) (with keys that are 128, 192, or 256 bits long) is the current standard for symmetric encryption. For asymmetric encryption, the standard uses RSA cryptography and elliptical curve cryptography (ECC) with keys of at least 2048 bits. To prevent insecure modes of operation, avoid those that require the Electronic Codebook (ECB) mode or an RSA with no padding, for example.