Blockchain seems complicated, and
it definitely can be, but its core concept is quite simple. A blockchain is a
type of database. To be able to understand blockchain helps to first understand
what a database is.
A database is a collection of
information that is stored electronically on a computer system. Information, or
data, in databases is typically structured in table format to allow for easier
searching and filtering for specific information. What is the difference
between someone using a spreadsheet to store information rather than a
database?
Large databases achieve this by
housing data on servers that are made of powerful computers. These servers can
sometimes be built using hundreds or thousands of computers in order to have
the computational power and storage capacity necessary for many users to access
the database simultaneously. While a spreadsheet or database may be accessible
to any number of people, it is often owned by a business and managed by an
appointed individual that has complete control over how it works and the data
within it.
Cryptography
Cryptography is a method of
developing techniques and protocols to prevent a third party from accessing and
gaining knowledge of the data from the private messages during a communication
process. Cryptography is also made up of two ancient Greek terms, Kryptos and
Graphein, the former term meaning “hidden” and the latter being “to write”.
There are several terms related to cryptography, which are stated as follows:
·
Encryption
·
Decryption
·
Cipher
·
Key
To understand cryptography in
blockchain, one has to understand the types of cryptography. There are mainly
three different ways in which we can perform cryptographic algorithms, namely,
symmetric-key cryptography, asymmetric key cryptography, and hash functions.
1. Symmetric- Key Cryptography– In
this encryption method, we take a single key into application. This common key
is used for both the encryption as well as the decryption process. Using a
common single key creates a problem of securely transferring the key between
the sender and the receiver. It is also called Secret-Key Cryptography.
2. Asymmetric- Key Cryptography-
This encryption method uses a pair of keys, an encryption key, and a decryption
key, named public key and private key respectively. The key pair generated by
this algorithm consists of a private key and a unique public key that is
generated using the same algorithm. It is also called Public-Key Cryptography.
3. Hash Functions- This type of
encryption doesn’t make use of keys. It uses a cipher to generate a hash value
of a fixed length from the plaintext. It is nearly impossible for the contents
of plain text to be recovered from the ciphertext.
Applications
Below are numerous blockchain
applications bringing efficiency and speed to industries and business
functions:
Industry-specific
solutions
Financial
Services
·
Investment Management
·
Cross-Border Transactions
·
Trade Finance
·
Capital Markets
Public
sector
·
Transparent Budgeting
·
Digital Voting
Common
solutions
Internet
of Things (IoT)
·
Smart Appliances
·
IoT monitoring
Smart
Contracts
·
Smart contracts in insurance
·
Supply chain management
·
Financial data recording and management
·
Copyright management
·
Clinical trial tracking
·
Property ownership transfer
Personal
Identity Protection
·
Digital IDs (Passports, Personal IDs,
Marriage Certificates)
·
Wills and Inheritances
Blockchain technology has been in the key focus areas of development for all multinational companies and also a huge number of startups are emerging in this technology for the past few years. Blockchain is yet to witness its mainstream usage in society, yet there are numerous opportunities for professionals to explore and develop their careers in this field; one of which is cryptography in blockchain for sure.
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