Public Key Cryptography (PKC) is an asymmetric encryption technique that relies on a pair of keys to secure data communication. The public key is the encryption key shared with everyone to receive transactions, and the private key is the decryption key which must be kept secret.
This technique is at the heart of cryptocurrencies and guarantees the integrity and authenticity of cryptographic transactions.
Key points to remember
- Public Key Cryptography (PKC) is an asymmetric encryption technique that relies on public/private key encryption to secure data communication.
- The public key is the encryption key shared with everyone to receive transactions, and the private key is the decryption key which must be kept secret.
- The recipient’s public key is used to encrypt the data; the recipient’s private key is used to decrypt the data.
- This technique is at the heart of cryptocurrencies and guarantees the integrity and authenticity of cryptographic transactions.
- Remember to keep your private keys private and secure at all times.
What is cryptographic key encryption?
The encryption algorithm used in blockchains is the cryptographic key encryption method to encrypt and decrypt data. A cryptographic key is a random string of data, such as numbers and letters, generated to encrypt data and decrypt encrypted data.
The cryptographic encryption can be symmetric or asymmetric key cryptography. In symmetric encryption, a single key is used to encrypt and decrypt data. In asymmetric encryption, two keys are required to encrypt and decrypt encrypted messages in a complex mathematical algorithm. Key pairs used in asymmetric cryptography are called public keys and private keys. A public key is used to encrypt messages and is widely shared and displayed publicly, such as your email address or bank account, to receive cryptocurrency. Instead, a private key is the decryption key used to decrypt messages and should be kept secret, like your password, to protect your cryptocurrencies.
Public key cryptography is used in cryptocurrency transactions to ensure that only the intended recipient can access the message. Integrity is ensured by asymmetric encryption because only a private key can decrypt information encrypted with a public key. The decryption process requires verifying that the message received matches the message sent, thereby authenticating that the data is not tampered with or tampered with.
History and common methods
In the early days of cryptography, distributing key pairs between two parties was quite difficult. The parties would first exchange a key which was to be kept in absolute secrecy using a face-to-face meeting or a trusted courier, then use the key to share encrypted messages.
Nowadays, the Diffie-Hellman key exchange method allows two parties without prior knowledge of each other to establish a shared secret key together over an insecure channel.
Some of the most commonly used algorithms for generating public keys are Rivest-Shamir-Adleman (RSA), Elliptic Curve Cryptography (ECC), and Digital Signature Standard (DSS).
The ECC algorithm uses elliptic curves to generate keys and is used for digital signatures and key agreement. The RSA algorithm is the oldest cryptographic system used in the transmission of shared keys for symmetric key cryptography. DSS is a Federal Information Processing Standard specifying the algorithms that can be used to generate digital signatures used by NIST.
How does public key cryptography work?
In public-key cryptography, known as asymmetric encryption, anyone can encrypt messages using a public key, but you need a matching private key to decrypt the message. First, the unencrypted data, or plaintext, is put into a cryptographic algorithm using the public key. Then the plaintext appears as random data. And finally, anyone with the corresponding private key can decrypt the data and transcribe it back to plain text.
For example, Jane (sender) wants to send 1 BTC to Alice (receiver). Jane knows Alice’s public key and uses it to encrypt the transaction. After receiving it, the transaction is decrypted using Alice’s private key. Alice should be the only person who can authorize the transaction, because no one else knows her private key.
Public key encryption can also be used to create digital signatures. Here are the steps to generate a digital signature:
- The sender selects the file to be digitally signed.
- The sender’s computer calculates the unique hash value for the contents of the file.
- The hash value is encrypted with the sender’s private key, creating the digital signature.
- The original file and digital signature are sent to the recipient.
- The recipient uses the associated document application, which identifies that the file has been digitally signed.
- The recipient’s computer decrypts the digital signature using the sender’s public key and verifies that the decrypted hash value matches the hash of the original file.
Quick fact
Private key encryption is performed using the recipient’s public and private keys. A public key is used to encrypt messages and is widely shared and publicly displayed. Instead, a private key is the decryption key used to decrypt messages and should be kept secret.
Differences between public and private keys
Public key
The public key is the user’s public address on the blockchain used to receive cryptocurrencies. Anyone can use it to send you digital currencies; however, only you can spend them using your private key. The public key is used to encrypt messages before sending them.
Private key
A private key is similar to the front door of your house. The public knows its location because the address (public key) can be easily found, but only you with a key to the front door of the house (private key) can enter it. Private keys are used to decrypt messages created with the corresponding public key. The private key is kept secret; in case of loss, restoration or access to your funds is impossible.
Risks associated with public key encryption
Although the indisputable advantage of public key cryptography is robust data security, there are still some risks associated with it, such as:
Poor quality key
A poorly designed, i.e. too short, asymmetric key algorithm is a security risk. Thus, the issuance, renewal, and revocation of the encryption key must be handled with the utmost care.
Loss of private key
As mentioned earlier, private keys cannot be shared publicly and must remain private and secure. This is because once the private key is lost, there is no way to access any data or funds stored in a crypto wallet.
Man-in-the-middle attacks
Public key encryption is also vulnerable to a Man-in-the-Middle (MitM) attack in which the communication of public keys is intercepted by a third party (the “man in the middle”) and then modified to provide different public keys in place. .
The main way to establish a secure connection with servers, you must first verify their digital certificates.
Secure Socket Layer and Transport Layer Security Connections SSL/TLS uses public key encryption to enable the use of Secure Hypertext Transfer Protocol to create a secure connection between server and client. The communication session is first established using asymmetric encryption to verify the identity of both parties and exchange a shared session key that enables symmetric encryption.
Conclusion
Cryptography is essential for securing cryptocurrency transactions and ensuring that your data has not been tampered with. This is why private and public keys are essential to authorize these transactions.
Remember to keep your private keys private and secure at all times. Write your phrase on paper and store it in a fireproof safe. Also, go the extra mile by having your private keys engraved on a metal plate to protect them from high temperatures, humidity and harsh chemicals!
