Blockchain Key Terms & Cryptography in Blockchain

Hi! In this video, I'm going to talk about key blockchain terms and introduce the concept of cryptography in the context of blockchain technology. We'll cover:

• Immutability of data
• The 51% Attack
• What cryptography is
• How cryptography is used in blockchain
• Common cryptographic methods used in blockchain

🔒 Immutability of Data

Immutability means that once data is recorded on a blockchain, it cannot be changed or altered. This is achieved through cryptographic techniques that maintain data integrity and ensure it can be trusted.

For example, when a blockchain is stored across thousands of computers (nodes), if someone attempts to alter data on one machine, that change will be rejected by the rest of the network. The blockchain remains secure and tamper-resistant because all nodes maintain identical data copies.

⚠️ What is a 51% Attack?

A 51% attack happens when malicious actors gain control of more than half of the network’s computing power. With this majority, they can potentially:

• Alter transaction history
• Prevent new transactions from gaining confirmations
• Double-spend coins

However, in large-scale blockchain networks like Bitcoin, such attacks are practically impossible due to the sheer size and distributed nature of the network.

🔐 What is Cryptography?

Cryptography is the practice of creating and using codes and ciphers to secure information from unauthorized access or manipulation. It ensures data can only be accessed or modified by someone with the correct key.

Throughout history, cryptography has protected military, diplomatic, and financial communications. A classic example is the Caesar Cipher, used by Julius Caesar to encrypt messages. This involved shifting letters by a set number (e.g., shifting “A” by 3 becomes “D”).

🔏 Cryptography in Blockchain

Cryptography plays a fundamental role in blockchain technology. It secures data and transactions using mathematical algorithms that:

• Verify authenticity
• Preserve privacy
• Ensure data integrity

🧩 Common Cryptographic Methods in Blockchain

1. Hashing

• Converts data into a fixed-length string called a hash
• Any change in input results in a completely different output (avalanche effect)
• Example: Using SHA-256 to hash block headers

2. Digital Signatures

• Used to verify the authenticity of blockchain transactions
• Involves a pair of keys (public and private)
• Ensures that transactions cannot be altered once signed

3. Public Key Cryptography (Asymmetric Encryption)

Uses two keys:

• Public key for encryption
• Private key for decryption
• Helps verify identities and secure communication

4. Symmetric Cryptography

• Uses a single secret key for both encryption and decryption
• Example: The Caesar Cipher where the shift value is the shared key

📌 Final Thoughts

These cryptographic concepts form the backbone of blockchain security. While you don't need to master every detail to build smart contracts or dApps, having a foundational understanding is incredibly useful.