BerkeleyX: Blockchain Technology

Using blockchain, two parties in a transaction can confirm and complete something without working through a third party. This saves time as well as the cost of paying for an intermediary like a bank. However, blockchain could also be used to process the ownership of real-life assets, like the deed to real estate and vehicles. The two sides of a party would first use the blockchain to https://www.tokenexus.com/blockchain-cryptography-explained/ verify that one owns the property and the other has the money to buy; then they could complete and record the sale on the blockchain. “Because cryptocurrencies are volatile, they are not yet used much to purchase goods and services. While cryptocurrency is the most popular use for blockchain presently, the technology offers the potential to serve a very wide range of applications.

Once Alice creates her digital signature, she then sends it to her recipient, Bob, alongside the data. When Bob receives the data, he can verify its authenticity, check whether it retains its integrity and see whether it is non-repudiable, all by using Alice’s public key. If Alice wants to prove that a piece of data is authentic, retains its integrity and she does not want to be able to repudiate it, she can send a digital signature alongside the data.

Bitcoin: The first blockchain

There is no single point of failure and a single user cannot change the record of transactions. However, blockchain technologies differ in some critical security aspects. This script is made up of two aspects, Alice’s public key and her digital signature. The public key indicates the address of the outputs from the previous transactions (which she wants to use as inputs for the new transaction), while her digital signature shows that she is the true owner. Essentially, the hash and Alice’s private key are combined using a complex mathematical formula. The result is the digital signature, which can be verified with Alice’s public key to prove that she is the real owner of her matching private key, and not an impostor.

If the two values are different, it means the data has been altered, that it was not signed by Alice’s real private key, or there was some other problem. For the sake of our example, let’s say that the two values matched, and the data is in fact legitimate. We sign a receipt to verify that the information on it is correct and retains its integrity. It’s very hard to repudiate our handwritten signatures, because they are so hard to copy.

Cryptographic Hash

The use of asymmetric cryptography is where the environment is continuously expanding and the data is exchanged between different communication partners. In this type of cryptography, to perform key exchange, one party produces the secret key and encrypts it with the public key of the receiver. Once the connection is established, the rest of the communication will be completed by using the secret key as the encryption key. Hashing encryption is used for a number of critical processes that ensure the blockchain’s overall security.