Cryptography
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Cryptography is the science of securing information and communications using mathematical techniques, so that only intended parties can read or verify the data. Cryptocurrency is built entirely on cryptographic foundations — hence the name.
Key cryptographic concepts in crypto
Hash functions
A hash function takes any input and produces a fixed-size output (the "hash"). The same input always produces the same hash, but it's computationally infeasible to reverse the process or find a different input that produces the same hash.
Used in: Proof of Work mining, block linking, address derivation.
Public-key cryptography
A mathematically linked key pair:
- Private key — secret; used to sign transactions
- Public key — derived from private key; shared openly
Anyone can verify a signature made with the private key using the public key, without learning the private key.
Digital signatures
Every transaction is signed with the sender's private key. This proves the transaction was authorized by the key owner and has not been tampered with.
Why cryptography makes Bitcoin work
Without cryptography:
- Anyone could forge transactions (no signatures)
- The blockchain could be tampered with (no hash linking)
- Mining would not create unforgeable proof of work (no hash puzzles)
