February 30, 2023 – the cryptocurrency winter continues to wear us down with its own immobility which seems almost immutable. the bitcoins keep wandering $18,000, and even the bad news seems to stop raining. It’s still, this nightour on-chain data inspectors notice an event that was more anticipated. Satoshi Nakamoto he transferred his million bitcoins to another wallet. Death Sentence for Bitcoin?
Last doomsday scenario or return of the prodigal son?
This is a widely discussed and debated scenario in the cryptocurrency sphere. What would happen if we noticed a movement on the portfolio of Satoshi Nakamoto ?
One can easily imagine the wave of panic this discovery would have accompanied. some would think a hidden message of its creator to announce that his invention has failed. Others would rationalize the situation by convincing themselves of this moving is not selling.
What if the reality was very different? And if this treasure of about 20 billion dollars currently had a specific function for Safety equal to bitcoins ? This topic will be the purpose ofa series of articles in which I will share with you the history of cryptography. How could he be upset if, one day, one of the millennial math problemswas it supposed to be fixed?
A good reason to finally understand, in a popular way, all the gears and fundamentals of cryptography at the heart of bitcoins. Better late than never !
The electronic signature
Secure authentication
Before we even talk about blockchain, electronic signature it is the first building block of our beloved cryptocurrency. One of the elementary components of its cryptographic mechanisms. A decentralized on-chain electronic signature ledger, which enables the exchange of a digital asset thanks to its ability to track all transactions made. This is what bitcoins. But why are they needed?
Let’s take your connection to as an example Facebook. What if your login request included your username and password clear ? A hacker could intervene while sending yours data to the server, pretend to be Facebook to the latter and steal them. Encryption also doesn’t seem enough. Because this hacker could directly transmit encrypted identifiers to connect on your behalf.
So how can you be sure you are communicating well with Facebook ? This is where the need for a electronic signaturenecessary for any type authentication Safe Network. Whether it’s signing a document or connecting to your favorite social network. Authentication, sometimes without even revealing your password or private key. But how does it work?
The five components of a secure signature
Before answering this question, let’s take a look Property that a signature must meet to allow your authentication by example of our autograph signatures :
- Authenticity : the signature must allow to find identity or the pseudonym of the signatory. Not very noticeable when you look at the scribbles we use to sign our bank checks.
- Tamper proof : the signature must demonstrate that only you are able to provide it and that it cannot arrive of a usurper. Missed by our parent’s handwritten signatures, successfully copied into our correspondence notebooks during our young college years.
- Not reusable : the signature must be unique and associated with each document signed. Perhaps the only property to which the handwritten signature responds with sufficient robustness.
- Inalterability : When a document is signed, it must become unalterable to avoid any change that you would not approve. This is why we avoid signing a blank check. You will not be able to dispute the amount written later.
- Irrevocability Finally, the signature must be irrevocable. If it satisfies all of the above properties, the signer necessarily is the author of it and must not be able to deny. This can quickly cause problems when a handwritten signature or paper document isn’t immutable.
The security of handwritten signatures is therefore very imperfect. On the other hand, these properties are imperatively needed for protocols like bitcoins.
Going back to my example of Facebook, to allow your connection securely, the platform must authenticate with the server to ensure that it is not a hacker who is trying to usurp your identity. To do it, an asymmetric encryption protocol is used, just like when signing transactions on the blockchain. Once authenticated, Facebook and the server will exchange data via symmetric encryptionbecause it is simpler and less resource intensive.
The very functioning of the electronic signature is intrinsically linked to the chosen cryptographic protocol.
The two main types of encryption
Symmetric encryption
Exists of them main types of encryption. Lit has symmetric encryption, where you and your interlocutor have a single key to encrypt and decrypt your exchanges. And asymmetric encryption where each of you has two keys, one public and one private.
To explain how symmetric encryption works, let’s take a simple example:
To communicate secretly, Alice And Bob agree on a random number 12. To message each other, they will figure moving each letter of their messages through the 12-line alphabet. The letter HAS will become mthe letter b will become NOT, etc. When they receive a message, they just have to retransfer all the letters of the message the opposite direction to recover its original meaning. Not very sturdy, you’ll agree. But other systems are conceivable. For example a mathematical sequence that would change the encryption key with each letter of the message.
But symmetric encryption does a defect. To be able to talk in secret, Alice and Bob must agree in advance on the encryption key to be used. But this deal isn’t encrypted and can’t be perfectly secret. It therefore seems impossible to speak in secret without first speaking in a non-secret way. Until the invention of Diffie-Hellman key exchange which will lead to the advent of asymmetric cryptography.
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Diffie-Hellman key exchange and asymmetric cryptography
This mechanism was first thought of by cryptographers Whitfield Diffie And Martin Hellmann in 1976. It allows two interlocutors who have never communicated before to secretly exchange an encryption key that will be used during their future conversations.
This system is based on the use of what is called a one-way mathematical function. Acts so that the result of this function applied to a number is easily calculable. Conversely, the reverse path, i.e. finding the initial number starting from the result, is a very complex calculation impossible in a humanly reasonable time. This computational security is called the Diffie-Hellman decision hypothesis. Even if the encryption feature goes public, don’t worry, the message will remain indecipherable.
Let’s go back to our two interlocutors Alice And Bob :
Alice And Bob will unsecretly choose a number that will serve as a public keylet’s call it g and everyone has a private keyrespectively, has And b. To agree a symmetric encryption key for their future conversations, named VERSUSwill perform the following calculations:
- Alice perform the calculation A = G^a and send the result HAS in Bob.
- Bob perform the calculation B = G^b and send the result b in Alice.
- Alice receives the number b and then perform the calculation C = SI^a = (g^b)^a.
- Bob receives the number HAS and do the calculation C = A^b = (g^a)^b.
If you haven’t forgotten your math classes in college, you’ll have noticed that the calculations sol^si^a And g^a^b lead to the same result! Alice And Bob he then found a common secret key to dispense with symmetric encryption never exchange it and without anyone being able to calculate it… Provided that their private key, the rest !
The power function serves as one-way function. If a third person has access to all exchanges between Alice And Bob and knowing the numbers g, HAS And bthe latter will not be able to find the private keys has And b as well as the end result VERSUS.
To ensure that performing these calculations in the reverse path is impossible, has And b it must be very large numbers. For lovers of cryptography, I have deliberately overlooked the part modular mathematics. It is used to simplify calculations ofAlice and of Bob (and so that neither of you can calculate its partner’s private key) so as not to drown anyone. Just understand that it is a math trick which allows to realize very easily gigantic powers of numbers. Even the largest calculators in the world would not be able to calculate, for example 6^3000. If you want to learn more about the topic, I suggest you wait for my next article!
The Diffie-Hellman key exchange therefore it brings a whole new way of looking at cryptography. Allows intimacy end-to-end as well as a robustness that far exceeds what our most powerful computers are capable of calculating as long as the users’ private keys are large enough numbers. great. But the latter still does not meet all the conditions that an electronic signature must have. We only touch Bitcoin’s asymmetric cryptography with our fingertips. To go further, we’ll look at encryption AASR to finally address the cryptography used by bitcoin, cryptography ECDSA extension.
But how on earth could these great cryptographic principles and the security they imply lead to the “death of Bitcoin”? I’m keeping it for my next articles, you’ll have to arm yourself with patience and come back next week !
In cryptocurrency, do not save on prudence! So, to keep your crypto assets safe, your best bet is still a personal hardware wallet. To the ledger, there is something for all profiles and all cryptocurrencies. Don’t wait to secure your capital (trade link)!