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What Is Cryptography?
Crypto is a word that has been derived from the Greek language, and it means secret. So the term itself explains everything. It is quite self-explanatory. But to explain it for all, cryptography is the research and procedure of sending messages or data that are very secure and confidential between two or more people. The sender of the message “encrypts” it and sends it to the receiver who “decrypts” it to access to what is written in the message. This gives a clear indication that the data is non-accessible to any third person.
Cryptocurrency And Cryptography Decoded
Cryptography is used in the transaction of cryptocurrencies. It is a very beneficial mode of transfer because it assures anonymity and security to the users. This mode of money transfer does not require anyone to trust anyone. You do not even have to know the person to whom you are sending the cryptocurrencies.
There is no requirement for any government, bank, central authority, credit card company, or any third party. The whole concept of Cryptocurrency is running successfully on cryptography, and even normal home computers are constantly using cryptography.
The Importance Of Cryptography
As cryptocurrencies are entirely operated on the concept of cryptography, their importance needs to be thoroughly decrypted. Satoshi Nakamoto’s idea was first put on white paper and posted on the cryptography message board. Nakamoto very successfully solved the issue of double-spending by a person. And it is very easy here because Bitcoin runs only on codes. However, the intelligent Satoshi Nakamoto came up with an arrangement called the public-private key encryption.
The public-private key encryption technology allows the secureless transfer of cryptocurrencies between unknown people, and there is no one to initiate the entire proceeding or oversee it. Yet it remains very secure and safe for so many unknown people to be making transfers. It is with this guarantee and security that you can buy Bitcoins from the Immediate Edge app.
The Fundamentals Of The Public-Private Key Encryption Working Principle
Confidential
Every user in the Bitcoin network is issued with a password or a private key in terms of Bitcoin. The password has to be strong so that it cannot be decoded or hacked by anybody. This, in turn, initiates a public key that is linked. This public key can be shared with anyone because that is what is required to transfer cryptocurrencies to others. While on the other hand, the person receiving Cryptocurrency needs to have a private key to access the funds.
No More Double-Spending Issues
When it comes to Bitcoin, no investor faces double-spend problem. It uses cryptography methods to verify the originality of the users of the system. This is what makes Bitcoin unique and stands apart from other cryptocurrencies.
Integrity
Hashing is used to initiate a public key from the private key. Hashing is the processing of a chain of data through an algorithm. As it is impossible to reverse the action, there is no way anyone can make even one wild guess into your private key. So it is deemed safe.
The Trustless Factor
As both the public and the private keys are connected, it is known to everyone in the network that Bitcoin belongs to you rightfully. So you can have that trust factor that no one can take the your traded assets from you.
Irrefutable
As there is no central control over Bitcoin, it becomes irreversible once a transaction is made. But it is not a mistake committed or a problem created, it is only one of the features of Bitcoin, that is it does not allow a user to double-spend with Bitcoins.
Authenticity
Just as users cannot double-spend, they are constantly being monitored by Blockchain technology, and it is continuously being updated and verified by the network.
The Different Categories Of Cryptography
Cryptography is subdivided into three different types which are as follows-
- Public Key
- Secret Key
- Hash Functions
Conclusion
In United States, trading in cryptocurrencies are allowed, however, there are countries that have banned the same. So the legality factor depends on the country that is using the currency. But wherever you are doing it, be sure that you remain protected and invest safely.
