What is Cryptography and How Does It Work

  • By Greg Brown
  • Aug 07, 2023

What is Cryptography

The cryptocurrency phenomenon began in 2008 with the introduction of Bitcoin. Along with the young digital currency, other digital technologies were brought to the media forefront. Blockchain and cryptography quickly became household identities, with very few understanding what they are. 

Ultra-secure cryptocurrency blockchains are built on the back of cryptographic algorithms. The blockchain moniker emerged when describing the growing list of cryptocurrency records termed blocks. Each of these blocks from the distributed cryptocurrency database is linked using cryptography. Each block in the total chain contains a previous block’s cryptographic hash, timestamp, and transaction data.

In its broadest sense, cryptography is the process of coding information so that only the person or entity receiving the information can read the text. Modern cryptographic techniques have complex algorithms to enable encryption and decryption using 128 and 256-bit encryption keys. The Advanced Encryption Standard (AES) and other modern ciphers are considered to be unbreakable.

Every cryptocurrency blockchain has a separate algorithm used to encrypt the data in a specific way. The Bitcoin blockchain employs the SHA256 algorithm producing a 32-bit hash. Hash pointers link each block in the chain to its predecessor, meaning every change in transactions will produce an entirely different hash. Altering all the hashes before it. Propagating a change across the blockchain requires 51% of the network to agree to the change, thus the term 51% Attack. Public key Cryptography proves ownership in cryptocurrency. 

Cornerstones Of Cryptography

In cryptography, hackers use malicious code to break the encryption ciphers to retrieve the information others are trying to hide. These code breakers undermine any security principles the corporation and governments encrypting the data. There are four cornerstones in the process of Cryptography.

  1. Confidentiality is the process of keeping information secure and private. Cryptographic methods, such as encryption, are used to protect information at rest or in transit in the broader context of securing the government or corporation. Confidentiality agreements ensure information is restricted to specific people or places.
  2. Non-repudiation prevents someone from denying they performed a particular function when dealing with specific information. Cryptographic techniques are used to provide non-repudiation, allowing the sender of the information “to prove they sent the message” and the “receiver proves they received the message.”
  3. Authentication verifies the identity of the user or device. Cryptographic methods, such as digital signatures, are used to authenticate users and devices. This process ensures that a piece of data belongs to a specific user. 
  4. Data integrity is the ability to ensure a specific piece of data has not been altered in any way. Cryptographic methods such as hash functions are used to verify data integrity. Hash functions provide a way to detect changes in data. This entire process ensures data stays secure through its entire life cycle. 
  5. Key management is critical to the process of security of the cryptographic system. The cryptographic system’s security depends on the secrecies of key management, generating, and distribution of the keys.

Cryptography and Its Algorithms

Cryptographic algorithms are mathematical equations that scramble information before it is sent. If cryptographic services are required, the algorithms used are either FIPS-Compliant or NIST-Recommended. These algorithms have undergone extensive, ongoing testing and analysis to provide the utmost security. 

Cryptographic algorithms are widely used for tasks such as encryption and authentication along with digital signatures. Public key infrastructures bind cryptographic keys to machines or user identities and keys are used to authenticate data processing among these identities and devices. 

It is widely held that two factors determine a system’s cryptographic protection against malicious code.

  1. Strength of the cryptographic keys and effectiveness of the protocols and mechanisms surrounding the keys.
  2. Key management and its protection. (secure key management, storage, distribution, and destruction)

No matter how strong the algorithms have become, secure systems will fail due to poor key management. The National Institute of Standards and Technology (NIST) has developed precise key management scenarios to establish an effective solution.

Encryption and Cryptographic Algorithms

Encryption and Cryptographic Algorithms

The foundation of cryptographic security is its ability to scramble or encrypt the data at its two primary stages, at rest and in transit. The encryption algorithm is used to scramble the information from plaintext to ciphertext. Keys are used to alter the data in a predictable way. Several types of encryption are used to scramble the data in either 128-bit or 256-bit encryption. 

Encryption is the process of encoding information from plaintext to cyphertext. Encryption does not prevent interference from a third party but denies the content to be accessible. Keys are used to give authorized users the ability to display the content after the key is inserted.

Cryptography is the practice of secure communication in the face of third parties. As stated earlier, the foundation of this secure communication is the cryptographic algorithms used to scramble the data at its two stages. There are several types of encryption, each with benefits and uses.

  • Symmetric Encryption is the oldest and best-known of all the methods. This technique uses only one key to cipher and decipher the information. Due to its less complex nature, it can transmit information in bulk. The biggest drawback to the symmetric method is both parties need the key to encrypt and decrypt the information.
  • Asymmetric encryption uses two different but related keys to function, one key is secret, and the other is a public key. Public keys are used to encrypt data, and the secret key is used to decrypt information. Asymmetric encryption is a much more robust option for securing transmitted data over the internet.
  • Advanced encryption standard was created in 1997 by the NIST. The US Government chose the AES cipher to protect its sensitive data. AES has three different lengths of keys to encrypt data and then decrypt the same data at the other end; the 256-bit, the 192-bit, and the 128-bit. AES protects data at rest scenarios. 
  • Data encryption standard works by using the same key to encrypt and decrypt information. This factor requires the sender and receiver of the information to have the same key. DES was created in 1977 and has been superseded by the AES method.

Technology has created advancements in other encryption standards, with many used for specific purposes. Encryption in the Cloud, End to End Encryption, RSA, and Triple Data Encryption Standards are some of the newest and most complex methods. Quantum computing will revolutionize the cryptographic encryption process. As quantum computing becomes an everyday workable computing method, complexity will flourish.

Cryptography is used every day in real life; each time an online purchase is made, a banking transaction processes, or an email is pinged. Cryptography is used in the background. Classic cryptography was used as security by obscurity, keeping transmitted information safe. The modern world relies heavily on cryptographic engines and functions to work properly. 

The IoT, or Internet of Things, is the systemic connection of all online devices, making it require an excellent level of security across those devices to work properly for a system with billions of transactions. Modern cryptography has entered the equation as an essential but highly secure form of communication for everyday life. 

Modern cryptography has changed its premise in that, instead of relying on the strength of the algorithm, cryptographic standards rely on the complexity of the key and its management. There are four main goals to the modern cryptographic system: Confidentiality, Identification and authentication, Integrity, and non-repudiation. Modern systems are required to follow each of the four steps.

Understanding Cryptography Can Help It Evolve Through Use

Cryptography has developed into a wide-ranging method of secure communication throughout the world. Cryptographic algorithms have allowed cryptocurrencies to thrive and evolve into a global currency using blockchain. 

Technology will continue raising the bar on secure online banking and finance communication. The wait to receive a digital signature no longer exists because of cryptography. Strong passwords and their protections have taken the next step to secure individual and corporate accounts around the globe. 

Cryptography is a fascinating technology that will only become more useful as its complexity increases.

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