Here is explained the basic concepts that are required for understanding the blockchain and how it works.
Cryptography
Over the course of time, many encryption methods have been developed. In the age of digitization, there were even more. In order to understand cryptography, it is first necessary to understand the objectives of cryptography.
The objectives of cryptography are:
• Confidentiality assurance: The data or message is confidential and can only be read by those who have the key for decryption.
• Assurance of integrity: Provides proof that data or a message has not been altered on its way from the sender to the recipient.
• Assurance of authenticity: So that you can see that the data or message actually comes from the person he claims to be.
• Assurance of liability: The originator of data or the sender of a message must be clearly identifiable (non-repudiation).
Cryptography is basically divided into two areas, symmetrical and asymmetrical encryption. The latter is discussed in the following section.
Asymmetric cryptography
Also known as public key cryptography, uses public and private keys to encrypt and decrypt data. The keys are simply large numbers that have been paired together but are not identical (asymmetric). One key in the pair can be shared with everyone; it is called the public key. The other key in the pair is kept secret; it is called the private key. Either of the keys can be used to encrypt a message; the opposite key from the one used to encrypt the message is used for decryption [1].
Hash Function
Hash functions is form a separate area in cryptography and are an important instrument. The hash function compresses a data record of any length into a string of predefined length. Such a generated string is a digital fingerprint, which in practice is only referred to as a hash value. Since this value is unique and cannot be manipulated, since changing the content always involves changing the hash value.
To be considered a cryptographic hash function, the following properties must be fulfilled:
• Disposable function: It must not be possible to generate the original content or data set from the hash value.
• Collision protection: You cannot assign the same hash value to different data records.
• Uniqueness: The same data record must always have the same hash value.
[1] http://searchsecurity.techtarget.com/definition/asymmetric-cryptography