Basics of Ethereum (1/5): Cryptographic Security
Welcome back to the Allegedly Blog after two spending the last two months missing in action: the break was inevitable as our team experienced burnout in a number of ways. However, with failure comes growth, and we are ready to bring you an even greater quality of content than what was delivered in 2021. Now that these woes are a thing of the past, let us get back to what we do best—expeditions beyond the superficial.
Preface:
Believe it or not, there have been very few behavioral advancements in the human race over the last two decades. Disregarding the space of telecommunications and whatever hair-brained idea Elon Musk tells us about next, hardly any industries have altered the way human beings behave. Nevertheless, the cultural zeitgeist demands to be supplied with such a project. In fact, we witness this firsthand; cryptocurrencies, and their financial technology (FinTech), although still in stages of pure theory, are hastily becoming this generation's metaphorical wheel driving them into the glamor of the 21st century's latter half.
What is a Cryptocurrency?
If I were to ask, "How did Bitcoin, Ethereum, or any other digital coin/token come to be referred to as a cryptocurrency?" what would you say? For many, it is due to it being a currency found only on the web. If you yourself happened to fall in that category of people...consider reading further. Digital coins like Bitcoin and Ethereum were born via cryptography: an advanced field of mathematics requiring the assistance of computers to solve equations.
There are two kinds of cryptography in the world: the kind that will keep your kid sister from reading your files, and the kind that will major governments from reading your files." —Bruce Schneier, author of: Applied Cryptography
Cryptographic Applications
There are several technological features needed to architect a sustainable cryptographic hash function:
Deterministic Hash
Seamless Computation
Pre-image Resistance
Collision Resistance
Puzzle Friendly
A deterministic hash is an intelligent way of saying: This function will produce a hash(see example) absent of variation. Entering the same data produces the same results, always. Without this, the organization of one's inputs on the blockchain would be nearly impossible; as a result, there would be no incentive to the blockchain's public ledger, just more headaches.
A seamless computation should guarantee\that my hash(produced only after authorizing an exchange on the blockchain) is processed in a timely manner. If the turnaround is too slow, then other channels of exchange—PayPal—would prove preferable. The system must be efficient.
Pre-Image resistant functions is defined as: any cryptographic function which produces radically different outputs(hash signatures) when making the slightest change in the input. It must be infeasible to determine the input's data based on similarities found in other hash signatures.
Collision Resistant: inputs will have its own unique hash. Having two different inputs that result in the same hash is known as a collision.
Puzzle Friendly: hash functions bar anyone from returning identifying any discernable correlations between inputs and outputs. We previously established that a well-made deterministic hash is subject to change even when making small adjustments to the input of a transaction; furthermore, outputs are pre-image resistant when they are radically changed upon making these small changes to the input. A puzzle-friendly cryptographic hash function is simply yet another protocol implemented into the network to ensure there that it is nearly impossible to infer Y (outputs) based on X (inputs).
Conclusion
Simply put, modern-day cryptographic applications ensure previously unforeseen layers of protection to electronic P2P (Person-to-Person) transactions. This is quite advantageous to first parties who presently depend on the aid of third parties when acquiring sensitive data: medical records, property records, etc. Below is a neat depiction of what cryptocurrency offers society, and Allegedly Blog's financial series, Basics of Ethereum, aims to investigate the technology enabling these promises.
