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 * Explore Courses
   * Data Science Courses
     * Executive PGP in Data Science – IIIT Bangalore
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     * Executive Programme in Data Science – IIIT Bangalore
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     * Machine Learning and Cloud – IIT Madras
     * Executive PGP in Machine Learning & AI – IIIT Bangalore
     * Machine Learning & Deep Learning – IIIT Bangalore
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     * Machine Learning & NLP – IIIT Bangalore
     * ACP in Machine Learning – IIT Delhi
     * Master of Science in ML & AI – LJMU & IIT Madras
   * Software Engineering
     * Master in Computer Science – LJMU & IIIT Bangalore
     * PGC in Software Engineering – upGrad
     * BCA – Amrita University
     * Full Stack Development – IIIT Bangalore
     * Cyber Security – IIIT Bangalore
     * Cloud Computing – IIIT Bangalore
     * Big Data – IIIT Bangalore
     * DevOps – IIIT Bangalore
     * ACP Cyber Security – IIIT Bangalore
     * ACP Cloud Computing – IIIT Bangalore
     * ACP Big Data – IIIT Bangalore
     * ACP DevOps – IIIT Bangalore
   * Blockchain Technology
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     * Executive PGP – Blockchain – IIIT Bangalore
   * Digital Marketing
     * Digital Marketing and Communication – MICA
     * Digital Branding & Advertising – MICA
   * Business Analytics
     * Executive PGP in Business Analytics – LIBA
     * Certificate in Business Analytics – MSU
     * Business Analytics Certification – upGrad
 * Blog
 * MBA, Management & Degree
   * Global MBA
     * Doctor of Business Administration – SSBM Geneva
     * Global MBA – IMT & Deakin
     * Master of Business Administration – IMT & LBS
     * MBA (Global) in Digital Marketing – MICA & Deakin
     * Global MBA – Deakin Business School
   * MBA Programs
     * PG Diploma in Management – BIMTECH
     * MBA Executive in Business Analytics – NMIMS
     * Master of Business Administration – OP Jindal
     * MBA in Strategy & Leadership – Jain University
     * MBA in Advertising & Branding – Jain University
   * Management Courses
     * Digital Marketing & Business Analytics – IIT Delhi
     * Product Management – Duke CE
     * Operations Management and Analytics – IIT Delhi
     * Design Thinking Certification Program – Duke CE
     * Human Resource Management – LIBA
     * Masters Qualifying Program – upGrad Bschool
     * HR Management & Analytics – IIM Kozhikode
     * PGP in Management – IMT Ghaziabad
     * Management Programme – IMT Ghaziabad
     * Integrated Supply Chain Management – MSU
     * Effective Leadership & Management – MSU
   * BBA Courses
     * BBA in Advertising & Branding – Jain University
     * BBA in Strategy & Leadership – Jain University
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     * MA Communication & Journalism – Mumbai University
   * Law Course
     * LL.M. in Corporate & Financial Law – Jindal Global Law School
   * Health Management
     * Executive PGP – Healthcare Management – LIBA
   * Study Abroad
     * Master in International Management – IMT Ghaziabad & IU Germany
     * Bachelor of Business Administration – Australia
     * Master Degree in Data Science – IIIT Bangalore & IU Germany
     * Bachelor of Computer Applications – Australia
     * Master in Cyber Security – IIIT Bangalore & IU Germany
     * Bachelor of Computer Applications – USA
     * BBA – Chandigarh University & Yorkville University Canada
 * Top Institutes
   * IIT Delhi
     * Digital Marketing & Business Analytics – IIT Delhi
     * Operations Management and Analytics – IIT Delhi
     * ACP in Machine Learning – IIT Delhi
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     * Master of Science in ML & AI – LJMU & IIT Madras
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     * PCP in Data Science – IIM Kozhikode
     * HR Management & Analytics – IIM Kozhikode
   * IIIT Bangalore
     * Executive PGP in Data Science – IIIT Bangalore
     * ACP in Data Science – IIIT Bangalore
     * Executive Programme in Data Science – IIIT Bangalore
     * Executive PGP in Machine Learning & AI – IIIT Bangalore
     * ACP in Machine Learning & Deep Learning – IIIT Bangalore
     * ACP in Machine Learning & NLP – IIIT Bangalore
     * Full Stack Development – IIIT Bangalore
     * Executive PGP – Cyber Security – IIIT Bangalore
     * Executive PGP – Cloud Computing – IIIT Bangalore
     * Executive PGP – Big Data – IIIT Bangalore
     * Executive PGP – DevOps – IIIT Bangalore
     * ACP Cyber Security – IIIT Bangalore
     * ACP Cloud Computing – IIIT Bangalore
     * ACP Big Data – IIIT Bangalore


CRYPTOGRAPHY IN BLOCKCHAIN: TYPES & APPLICATIONS [2022]

by Mayank Sahu

Mayank Sahu is the Program Marketing Manager with upGrad for all emerging
technology vertical. His past experience is in analytics industry extensively in
healthcare Domain. Mayank has completed his Graduation…

Jan 4, 2021
Home > Blockchain Technology > Cryptography in Blockchain: Types & Applications
[2022]

Table of Contents

 * Introduction to Blockchain
 * Cryptography
 * Types of Cryptography
 * Use of Cryptography in Blockchain
 * Conclusion


INTRODUCTION TO BLOCKCHAIN

Blockchain is a peer-to-peer network; the word ‘blockchain’ is made up of two
separate terms, ‘block’ and ‘chain’. A block being referred to a collection of
data, alias data records, and chain being referred to a public database of these
blocks, stored as a list.

These lists are linked using cryptography, making it the most essential and
fundamental requirement for creating a blockchain. Blockchain is a growing list
of records, and the blocks get appended to the list with time. Cryptography in
blockchain can be a tricky concept, but we have tried to simplify it for your
better understanding.  

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Source


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
latter being “to write”. There are several terms related to cryptography, which
are stated as follows: 

Encryption: It is a process of plaintext (normal text) to a ciphertext (random
sequence of bits). 



Decryption: The inverse process of encryption, conversion of ciphertext to
plaintext.

Cipher: The mathematical function, i.e. a cryptographic algorithm which is used
to convert plaintext to ciphertext. 

Key: A small amount of information that is required to induce the output of the
cryptographic algorithm.

Read: Blockchain Project Ideas


TYPES OF CRYPTOGRAPHY

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. 



Source


USE OF CRYPTOGRAPHY IN BLOCKCHAIN

Blockchains make use of two types of cryptographic algorithms, asymmetric-key
algorithms, and hash functions. Hash functions are used to provide the
functionality of a single view of blockchain to every participant. Blockchains
generally use the SHA-256 hashing algorithm as their hash function. 

Cryptographic hash functions provide the following benefits to the blockchain:

 * Avalanche effect – A slight change in the data can result in a significantly
   different output.
 * Uniqueness – Every input has a unique output.
 * Deterministic – Any input will always have the same output if passed through
   the hash function.
 * Quickness – The output can be generated in a very small amount of time.
 * Reverse engineering is not possible, i.e. we cannot generate the input by
   having the output and the hash function.

Hash functions have a major role in linking the blocks to one another and also
to maintain the integrity of the data stored inside each block. Any alteration
in the block data can lead to inconsistency and break the blockchain, making it
invalid. This requirement is achieved by the property of the hash functions,
called the ‘avalanche effect’.

According to this, if we make even a slight change in the input to the hash
function, we will end up getting a totally unrelated output as compared to the
original output. Let us take an example of an SHA-256 hash function, and compare
their outputs, 

Input: Blockchain at upGrad

Output: 04f0ecc95159533982d7571eada5f8d76592b6e97ead964467c603d31b9e7a9c

Input with a slight difference: Blockchain at upGrad

Output: 80b069904b6a8db46ed94e7091ff4e5fc72fae5422d46cc57d8f66db7abf4781 

You can notice the huge difference in output after changing a single character
at the input from lowercase to uppercase. This makes the data reliable and
secure on the blockchain; any changes in the block data will lead to this
difference in hash value and make the blockchain invalid, making it immutable.

Asymmetric-key cryptography is where the private key generally needs to be
produced by a random number algorithm, and the public key is calculated by
executing an irreversible algorithm. The asymmetric encryption algorithm has the
advantage of having separate public and private keys, which can be transferred
over unsecured channels.

Likely, it also has several disadvantages, some of them being low processing
speed and unsatisfactory encryption strength. It is very much necessary to
ensure the security of the asymmetric encryption algorithm during the
transmission of data on the blockchain.

One of the major parts of asymmetric-key cryptography is digital signatures.
Digital signatures provide integrity to the process; they are easily verifiable
and cannot be corrupted. They also hold the quality of non-repudiation, making
them similar to the signatures in the real-world. The digital signatures ensure
that the blockchain is valid and the data is verified and correct. 

Hashing, public-private key pairs, and the digital signatures together
constitute the foundation for the blockchain. These cryptographic features make
it possible for blocks to get securely linked by other blocks, and also ensure
the reliability and immutability of the data stored on the blockchain.

There are a huge number of applications of blockchain technology, and
cryptography makes it possible. One of the major real-world applications of
cryptography in the blockchain is cryptocurrencies. Let us look at its
application in cryptocurrencies.



Source

Cryptocurrencies are one of the major applications of blockchains, and they use
public-private key pairs to maintain the addresses of the users on the
blockchain. For cryptography in blockchain, the public key is used as the
address of the person. The public key is visible globally, i.e. it is visible to
any participant of the participant. The private key is a secret value and is
used to access that address data and authorize any of the actions for the
‘address’, which are generally transactions. 



Digital signatures are widely used for cryptocurrencies. They are used to
approve transactions by signing them securely (offline) and are also used for
multi-signature contracts and digital wallets on the blockchain. To perform any
action from these multi-signature contracts and digital wallets, the digital
signatures from multiple (different) private keys are required before any action
to be executed.

Also Read: Blockchain Developer Salary in India


CONCLUSION

Blockchain technology has been in the key focus areas of development for all the
multinational companies and also a huge number of startups are emerging in this
technology from 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. With time this field will be providing endless
opportunities, and for this, you can start learning the blockchain technology
and have the first-mover advantage with upGrad. 

Cryptography in the blockchain is the core of this technology, making it
immutable and reliable. If you’re interested in this field and want to explore
this technology, you can have a look at the various courses provided by upGrad.


 * Advanced certificate program in blockchain technology: The course is provided
   by upGrad along with IIIT-B, focused on making individuals familiar with
   blockchain technology and blockchain development. 
 * Executive Certification in Blockchain from IIITB: It is a comprehensive
   11-month program developed with IIIT-B, focusing on making individuals learn
   in-demand skills for blockchain development and their practical applications.

Individuals who plan to grow their career in blockchain can take up any of these
courses and much more offered by upGrad to dive into blockchain technology to
achieve the amazing blockchain career opportunities that are waiting for them in
the future.


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