All cryptocurrencies ensure their security by relying on asymmetric encryption methods. This also helps them secure the nature of blockchain transactions. It is worth pointing out that both Ethereum and Bitcoin networks employ the use of a pair of cryptographic keys: one private and one public. These keys are needed to encrypt transactions that are sent to their virtual machines.
These two networks also adopt a similar algorithm, referred to as secp256k1 curve to secure encryption. This is known as public-key encryption, which is also regarded as asymmetric encryption. This is in contrast to symmetric encryption which involves both parties sharing the same public and private key. This is similar to the way two partners share duplicate house keys.
The symmetric encryption pattern is the most common one adopted by servers nowadays. When these servers communicate, they use similar private keys to verify each other. This is only safe once you trust the server on the other end of the transaction to ensure that this private key stays safe. This makes it mutually beneficial for both parties.
As the Cryptocurrency market expands, encryption takes a more relevant role. What Encryption basically does is that it transforms a string of letters or numbers (which is readable to humans) into an unreadable blob of arbitrary letters and numbers with one essential caveat. Besides this, the ciphertext that results from encryption algorithms does not have any fixed length.
Advanced Encryption Standard (AES) and Pretty Good Privacy (PGP) are well-recognized algorithms for achieving this. The Rivest–Shamir–Adleman (RSA) encryption algorithm is another popular standard in IT departments across the globe. Yet, public keys that are created sometimes by these well-known encryption algorithms can be very long and unwieldy. Away from this, the importance of trading crypto with a top app – including Bitcoin Era app – cannot be ignored.
Ethereum adopts a similar elliptic-curve-based encryption protocol just like Bitcoin, which is also referred to as an ECDSA algorithm, which has an edge in terms of both brevity and security: ECDSA enables a smaller key size, which minimizes storage needs and requirements for transmission. Yet, Vitalik Buterin
has affirmed that the protocol will most probably steer clear from the current execution of ECDSA in the long run, towards something that presents an even greater level of security.
Weaknesses of Encryption
In spite of all the upsides that come with the adoption of encryption, it has certain weaknesses that can’t be ignored. It must be stressed that it is reputed for being CPU-intensive. Apart from this, private keys offer a high level of security cryptographically, but they can be susceptible to human folly. In other words, private keys must be managed carefully.
Indeed, the National Institute of Standards and Technology (NIST) offers different guidelines for the life cycle of cryptographic keys, which is based on data sensitivity or keys that must be protected, and the amount of data – or a number of key pairs – that are protected. It is also worth stressing that if you want to protect your messages from being decoded by anyone, encryption may not be a perfect choice.
The existence of a key – irrespective of its privacy – is virtually begging for
your details to someday be unlocked, not only by you but also probably by anyone who gets ahold of it!
Hashing and Encryption
Hashing offers more security than encryption, at least when it comes to the lack of existence of a private key, which can reverse a hash back to its readable (original) form. So, if a machine does not
need to understand the contents of a dataset, it should rather be given the hash of the dataset.
Hashing algorithms consume data just like encryption algorithms, but they tend to produce a number of fixed lengths. Changing just one character in a large dataset will ensure that the hash comes out entirely different.
Conclusion
Cryptocurrencies got their names since they verify transactions by using encryption. Even though this implies that advanced coding is required for transmitting and storing cryptocurrency, it provides security and safety.
