Ciphers are to the blockchain what engines are to airplanes. In fact, crypto ciphers give the blockchain its most important feature—security. Let’s dig in to understand how ciphers function and the different types—with specific reference to crypto.
What is a cipher in crypto?
Crypto-currencies are named for a reason—cryptography is a big part of what they do. Transactions are recorded in real-time on the blockchain, which is the foundation of all crypto. Information about these transfers—wallet addresses, timestamps, confidential identity markers—need to be protected from prying eyes. But how?
Enter ciphers. Cryptographic ciphers use mathematical techniques to achieve complete secrecy. Once something has been encrypted, only authorized people can access it. For those who like their history, Julius Caesar used substitution to encode his messages, where he replaced each letter with another three letters down the alphabet.
Ordinary text: VITALIK BUTERIN
Ciphertext: YLWDOLN EXWHULQ
As you can see, it is tough to decrypt a message without first knowing the cipher to encrypt it. This is a case of a symmetric cipher, where the same key can be used to both encode or decode the ordinary text.
What is the purpose of a cipher?
Most cipher algorithms involve using a piece of private information, which is the ‘key’ to the encryption. The scheme of encryption varies from system to system—symmetric or asymmetric. Symmetric encryption requires only a single key, while asymmetric needs two.
Modern cryptographic methods are mostly used by computers. However, evidence suggests that they were used to encode messages in the days of ancient Greeks, dating back to around 400 BC.
Nowadays, they are commonly used to secure online communications. Many network protocols employ them to protect sensitive data stored in exchanges. VPNs, for instance, use protected algorithms to prevent unwanted leakage of information to hackers or scamsters.
Types of crypto ciphers
Each type of cipher used on a blockchain fulfills different requirements in the mining process. They are often irreplaceable and cannot be used interchangeably. Let’s examine the types of ciphers and how they differ from one another.
Symmetric encryption: Symmetric encryption is when ordinary text is encrypted using a cipher, and the same cipher can also be used to decrypt it. For instance, the Julius Caesar cipher was symmetric. These systems are faster and more efficient than asymmetric ones. However, exchanging the cipher system is difficult in some cases.
For instance, the key to a cipher can be ordinary text in its raw form. Although this could be encrypted, you’d have another key to worry about, and so on.
Asymmetric encryption: Here, two different cipher keys are used for encryption and decryption. The key that is secure is called the private key, and the key that isn’t is called the public key. The blockchain uses a lot of asymmetric ciphers.
Here’s how this works: If A wants to send a message to B and ensure that only B gets to read what it is, A encrypts the ordinary text with the public key in such a way that B’s private key can decrypt it. The public and private keys are, obviously, mathematically related.
Such encryptions come under Public Key Encryptions (PKC), first proposed by Stanford professor Martin Hellman in 1976.
How do crypto ciphers work?
Cryptography is often associated with converting an ordinary text into a ciphertext, which is essentially the encrypted version of the original message. This ciphertext, once complete, can only be decoded by the intended receiver.
Encryption is the process of converting ordinary text into ciphertext, and decryption is the process of decoding it.
Ciphers might sound like something straight out of a sci-fi novel, but they’re actually commonplace. You employ ciphers when you use online banking, log onto your Google account, send an email, or buy something on Amazon.
However, crypto ciphers work differently. Blockchains use cryptography to preserve information related to wallet addresses and transactional data. Some of the popular use cases are:
- Public keys, for instance, are used to complete a transaction.
- Verifiers use hash ciphers to mine Bitcoin.
- Merkle trees are used to position blocks on a chain.
Difference between codes and ciphers
Codes and ciphers are fundamentally different, and it is essential to distinguish between them. A code is a method of changing a message by replacing each word with another word that has a different meaning.
On the other hand, a cipher converts the message using its algorithm to transform the data representing the letters and words in the message. Moreover, ciphers are most compatible with computers because algorithms are automated and easily programmed.
Modern-day encryption processes are completely secure. They can withstand attacks even when the hacker knows the cipher. Computers can generate many algorithms and encrypt ordinary text in a million different ways in seconds. As most of our private information is already on the internet, we need to innovate and invest in technology that helps secure it from bad actors. The blockchain is our best bet.