Cryptography is used to protect sensitive information from attacks. What are the types of cryptography, and how does cryptography protect cryptocurrencies? Click through to learn more! The rising popularity of cryptocurrency has attracted many scammers and hackers. To protect crypto exchanges from these opportunists, developers continually implement advanced cryptography. But what is cryptography, and how does it protect crypto investors? Read on to learn more about cryptography and its different uses for securing sensitive information. We’ll also tell you how you can keep your cryptocurrency information safe.
What Is Cryptography?
Cryptography is the practice and study of using mathematical techniques to create secure communication. Through cryptography, only the sender and the intended recipient will be able to view and process protected data.
The term “cryptography” comes from “kryptos”, which is the Greek word for “hidden”. Before modern cryptography, basic cryptography was limited to written documents, where a seemingly nonsensical original message was “decrypted” or decoded to reveal its meaning. After the development of cipher machines and computers during World War II, cryptographic techniques became more complex and had more varied uses.
Today, cryptography continues to advance through the intersecting fields of computer science, mathematics, and communication. Cryptography is invaluable for information security – your computer passwords, credit card chips, and e-commerce sites are just a few of the everyday things that are protected by cryptography.
What Are The Objectives Of Cryptography?
The main aim of cryptography is to ensure the secure transfer of information. Other objectives include:
- Integrity: Cryptography reassures both the recipient and sender that their secret messages and other information cannot be modified, whether they’re in storage or in transit.
- Confidentiality: With cryptographic operating systems, only the intended receiver will be able to decrypt the sent data or messages.
- Authenticity: Strong cryptography allows the sender and recipient to verify where the message will be sent, as well as each other’s identities.
- Non-repudiation: A cryptographic scheme assures the sender with proof of delivery and the recipient with proof of the sender’s identity. This prevents either party from backtracking and denying that they processed the encrypted information.
What Are The Types Of Cryptography?
Modern cryptographic systems can be classified into three different types:
Secret Key Cryptography
Also known as symmetric cryptography, secret key cryptography uses a single key for encrypting data. This makes symmetric cryptography the simplest form of cryptography.
The cryptographic algorithm of this system uses a cipher’s key for encryption. When the recipient needs to access the data, they need this secret key to decrypt it. Examples of symmetric encryption methods include AWS cryptography as well as the Caesar cipher, one of the classical ciphers still in use today.
Symmetric-key cryptography can be used for both data that are physically stored (a.k.a. at-rest data) and data moving between networks or devices (a.k.a. in-transit data). However, symmetric encryption is most typically used for at-rest data, as sending the secret key to the message’s recipient makes it vulnerable.
Public Key Cryptography
Also called asymmetric cryptography, public key cryptographic schemes use two keys: a public and a private key. The public key is used to encrypt the message, while the private key decrypts the message. In asymmetric encryption, the keys are not interchangeable. If one key is used for encryption, it can’t be used to decrypt the message.
In this kind of system, anyone can encrypt messages using the public key of the intended receiver. However, it can only be decrypted by the recipient’s private key.
Asymmetric encryption algorithms also allow easy, strong authentication for digital signature schemes. For example, if a private key is used for message authentication instead of encryption, it adds a digital signature.
A digital signature is a fixed-length string of data that is encrypted with a private key. The receiver then decrypts the digital signature with the sender’s public key. This reassures the receiver that the message was made by the sender because they’re the only ones who can sign using the private key.
Public key cryptographic schemes protect multiple Internet standards like Secure Shell Protocol (SSH) for remote logins and Secure/Multipurpose Internet Mail Extensions (S/MIME) for the digital signing and encryption of emails. Some public key algorithms provide digital signatures, key distribution and privacy, or both.
Public-key cryptography is slower than symmetric ciphers, making it less suitable for in-transit data. Modern cryptosystems typically combine the two to improve security without majorly compromising the speed of transfer. This is normally done by using public-key cryptosystems to exchange a secret key securely. The secret key is then used for symmetric encryption.
Hash functions are highly secure one-way algorithms that protect data, where a set of data is transformed by the algorithm into a fixed-length string. This fixed-length string is called a hash value.
Regardless of the original amount of data involved, the unique hash value always remains the same. This makes it more difficult to detect the contents of a message, as well as any information about the recipient and sender.
However, hash functions are irreversible, and using this advanced encryption method means you won’t be able to recover the input from the hashed output. This extra security has made hash functions invaluable for blockchain management.
Why Is Cryptography Important For Cryptocurrencies?
Cryptographic algorithms are important to cryptocurrencies for three reasons: they secure transactions, protect your private information, and help keep your coins from double-spending. Double-spending coins is the risk that a cryptocurrency is duplicated or faked, then paid for more than once.
Cryptography secures blockchain technology, allowing a blockchain to distribute digitally and anonymously while maintaining a protected ledger. This ledger records crypto transactions and ensures that all parties involved are easily verifiable. Without advanced encryption, it would be impossible for cryptocurrency systems to give people ownership over digital assets and process transactions transparently.
How To Keep Your Cryptocurrency Information Safe
A lot of investors have dipped their toes into the world of cryptocurrency because of the potentially huge profits. However, this also means that there are more hackers and scammers stealing valuable crypto assets from vulnerable investors.
Here are some ways that you can protect yourself from crypto theft.
Use A Strong Password
No password is uncrackable, but a good one will make it difficult for hackers to gain access to your information. Some users create complex passwords that consist of a mix of lower and uppercase letters, special characters, and numbers.
However, this can be difficult to remember, so security experts recommend using a string of words instead. An example would be “energypilotapplechorus”. This is easier to keep in mind but is long enough to deter password cracking.
Use A Hardware Wallet
One of the best ways to protect your crypto wallets is by using a hardware wallet. Hardware wallets are USB drives that store your private keys securely.
With a hardware wallet, you can protect your seed words from being moved out from your device. They also typically have PIN codes or additional passwords that will protect them even if the hacker gets physical access to the drive.
Whenever you do crypto transactions with a hardware wallet, it has to be connected to your PC or device. The wallet produces a signature, then sends it to your internet-connected PC or device. This lets you transact without exposing private keys to hacking. Because the wallet itself has no internet connection, it’s also protected from malware.
Back-Up Your Seed Phrase
A seed phrase is a series of words that acts as the “master key” for recovering crypto information. If you forget your password or uninstall your wallet and reinstall it on a new device, you need your seed phrase to recover your accounts. Whoever has access to your seed phrase can access every account connected to it.
Some people backup their seed phrase by taking a screenshot of the seed phrase or putting it in a document file on their device. However, we strongly recommend that you avoid doing this – anyone who has physical access to your device can steal the phrase. It also makes it more vulnerable to theft through malware attacks.
A simple way to protect your seed phrase is to write it down on a piece of paper instead of storing it in a digital document on your device. Store this paper in a secret place where it won’t get damaged easily. If needed, put several copies in different hidden locations.
Be Wary Of Phishing
One of the most common ways to steal crypto assets is phishing. Phishing is when scammers pretend to be trusted contacts or legitimate companies so they can get your private information. One example of phishing is when scammers trick investors into downloading fake applications that secretly collect your keystrokes or data in the background.
Scammers will often advertise fake versions of popular wallets or exchanges such as MetaMask online. While app stores like Google Play offer authentic applications, there have also been numerous reports of fake wallets or apps in the search results. To avoid this, download the app directly from the developer’s official website.
Another example is when a seemingly legitimate Google Ad is used to direct people to fake websites. For account recovery or registration, these fake sites will ask victims to enter their seed phrases. As a precaution, don’t enter your seed phrase into pop-ups from unfamiliar websites or ads.
Use An Authenticator App
Some apps or servers will use two-factor authentication (2FA) to protect your information. With 2FA, they can send SMS text messages with codes to your mobile device so you can approve a transaction or withdraw funds.
However, hackers can tap into your phone service or mirror your messages. Then, they can steal these text codes and gain access to your crypto assets. Using an authenticator app like Google Authenticator adds an extra layer of protection to 2FA because a hacker would need physical possession of your mobile device to get the code.
Cryptography protects cryptocurrency exchanges from schemes to steal users’ sensitive information and crypto assets. Public-key cryptography is at the forefront of preventing attacks on cryptosystems, and it’s continuously being developed to help people store, send, and receive data securely.
Because cryptocurrency exchanges have made it possible for us to safely transfer and store money, there will be a greater need for better public-key cryptosystems in the future. With more improvements from developers, hacking and theft of valuable crypto assets will hopefully be prevented.
Frequently Asked Questions About Cryptography
What is public-private key encryption?
In public-private key encryption, a sender uses a public key to encrypt a message. The recipient then uses a private key to decrypt it. This ensures that only the intended recipient will be able to access the message and its contents.
By matching the received and sent messages, public-private key encryption also guarantees data integrity. It ensures that the contents of the message aren’t tampered with while in transit.
What is proof-of-work (PoW)?
Proof-of-work (PoW) is a method for verifying blockchain transactions. In proof-of-work systems, an algorithm provides a mathematical puzzle, which participating computers then race to correctly solve. These computers are known as “miners”, and the puzzle helps verify a group of transactions, also called a “block”.
Once a computer has correctly verified a block, it’s added to the blockchain ledger. The successful miner is then given some cryptocurrency as a reward for the work done.