Crypto has entered the everyday vernacular for a lot of people. It’s something that a lot of people now use regularly. Even those who haven’t yet embraced cryptocurrency will have heard lots of the terms relating to these modern and decentralized currencies.
We use the term a lot without even thinking where it comes from. Why is this revolutionary form of finance referred to as cryptocurrency? While there’s a simple answer (it uses cryptography) there is a much more complex underlying technology in blockchain, which is inherently very complicated due to the way the tech works.
Cryptocurrency Grows in Popularity
Currencies and paying for things have changed in recent years. Fair to say that crypto has been a big fork in the road for finance. In a change from traditional currencies like the dollar or pound which are controlled by central banks or governments, these cryptocurrencies operate on decentralized networks (peer-to-peer networks) based on blockchain technology. These networks are maintained by computers called nodes which can be pretty much anywhere around the world. The term crypto of course comes from the cryptography that helps ensure the safety of the system by encrypting data and keeping it secure.
People have heard of the currency a lot more due to the fact that it is being embraced in certain industries. The gambling industry has played a big role in this and some estimates now say that crypto is used more in gambling than any other industry.
The launch of more crypto casino sites makes a lot of sense when people explore the features and potential benefits of using this form of finance. For casino players, there are some benefits besides just the fact they can access a lot of different games. Some sites can now provide much speedier withdrawal and deposit systems due to cryptocurrency. Whereas some other currency methods have a middleman system and somebody needs to approve the transaction, crypto casinos can rely on cryptographic methods to give them safety throughout the transfer system. People may also like the anonymity given by these crypto sites as they are often much less reliant on adding specific information – this is one of the benefits of the blockchain technology that is driving these currencies.
Many other factors in the crypto industry have been important for growing awareness and this includes things like the Metaverse which can now be explored through browsers that even use blockchain technology – it’s becoming much more mainstream.
Role of Cryptography in Blockchain
So we’ve explored the fact that cryptography is part of blockchain – how does this actually work in practice though?
Cryptography plays a role in ensuring the security of blockchain technology. At a top level, cryptography protects information by changing it into a format that is unreadable without a decryption key – even if it were somehow accessed this information on its own is not readable. Two primary cryptographic techniques are used in cryptocurrency: hashing and public-key cryptography.
Hashing
Hashing is taking an input (like a transaction or a piece of data) and passing it through a mathematical function. This gives a fixed-length string of characters. No matter how large or minuscule the original input is, the output will always be the same length. This output is called a hash.
One important feature of hashing is that it’s nearly impossible to reverse-engineer the original input from the hash. This makes it useful for verifying data without revealing sensitive details. Loads of industries can be changed by this and we’re seeing it applied in things like contracts.
Every block has its own hash, which also includes the hash of the previous block, creating a secure chain of transactions. If someone tries to alter one block, it changes its hash, making it obvious to the network that tampering has occurred.
Public-Key Cryptography
Public-key cryptography is another essential technique used in cryptocurrencies. This method involves two keys: a public key and a private key. A public key can be shared with anyone and is used to encrypt data while the private key is kept secret and is used to decrypt it.
A public key is basically an address to which someone can send funds while the private key is what the owner uses to access those funds (this is a very oversimplified explanation but it can help to understand). It’s the cryptographic equivalent of having a bank account number (public key that can be shared) and a PIN number (private key that should not be shared). This system ensures that only the rightful owner of the cryptocurrency can access and spend it.
Conclusion
Crypto gets its name based on the fact that it is the first currency to make use of cryptography. Combining the binary nature of digital technology and the fact that this can keep information very secure means that it is a sensible option for a lot of people and adds to the large ecosystem of payment options in the modern age.
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