Cryptography provides a method for secure communication through sophisticated mathematical equations (algorithms) and, often, secret keys. Three main types of cryptographic algorithms include symmetric encryption, asymmetric encryption, and hash functions.
In symmetric encryption, commonly called secret-key cryptography, the sender and receiver use the same key to encrypt and decrypt electronic data. The condition here is that the key is agreed upon ahead of the transaction and kept secret.
Thanks to its simplicity, symmetric encryption can quickly process large amounts of data and is typically used for bulk encryption. The drawback is figuring out how to safely and securely share the secret key with the intended party.
Asymmetric encryption, or public-key cryptography, relies on a pair of keys — a public key and a private key. The public key can safely be shared with the public, while the private key is kept secret. They are generated simultaneously using an algorithm that creates two unique but mathematically linked keys. The public key is used to encrypt the message, and the private key is used to decrypt the message.
Asymmetric encryption is generally considered a more secure method since it doesn’t require users to share the private key. It is typically used for smaller transactions and to authenticate data using digital signatures.
Hash functions differ from symmetric and asymmetric keys since they are not reliant on keys. Instead, they use an algorithm to turn the data into a fixed-length string of characters. Hash functions have become an integral part of blockchain management because of their ability to encrypt large amounts of data.
Additionally, hash functions verify that any unauthorised modifications cannot occur during data transportation through unsecured networks. Any changes to the original data automatically result in a new hash, rendering it an invalid transaction on the blockchain.
