Explained: The Role of Cryptography in Blockchain Development

Cryptography is one of the integral parts of blockchain technology. It is what makes blockchain quintessential, providing a secure transactions network and maintaining the overall integrity of the network. In this article we are going to learn about cryptography and its multifaceted role in blockchain development.

Understanding Cryptography

The word cryptography is derived by combining two Greek words. Crypto is written in Greek as kryptos and graphy is written as graphein. The meaning behind those words are ‘Hidden’ and ‘To write’ respectively. You see how the word itself describes the purpose of cryptography. And we recognize the cogency of using cryptography in blockchain.

  • Cryptography: In layman’s terms, cryptography means to convert a message into a hidden format to send it.
  • Definition: The process of turning a text in ciphertext making it completely unreadable for anyone except the sender and receiver is known as cryptography.
  • Explanation: Let’s understand cryptography through the below provided image and follow the process.

cryptography in blockchain

In cryptography, there are 5 process points involved. They can be also called as building blocks of cryptography and here is an image that will clear your understanding.

1. Sender end: The one who sends an original text is known as the sender end.

2. Cipher Text: A sent text is the original form of the message, on the other hand, a cipher text is an unreadable or scrambled form of text.

3. Cryptographic algorithm: An algorithm is used to convert the original text into a cipher text. This is done through mathematical equations and to be specific large formats of equations.

4. Receiving end: After the message has been ciphered with the algorithm it stays in the network reaching the receiving end. But before reaching the receiving end the message is again converted into its original form.

5. Key: Now this is the most vital piece of the mechanism. You see, without a key both sender and receiver cannot access the message. The key too is nothing but mathematical equations making the message unreadable for hackers or infiltrators.

Types of Cryptography

There are two types of cryptography at the core. The division is based on the type of key both the receiver and sender possesses. The two types are:

1. Symmetrical Cryptography: In this type of cryptography the key provided to both sender and receiver are the same key. It means it contains publicly available equations to decipher the cryptic text.

2. Asymmetric Cryptography: In such cryptography the keys provided to the sender and receiver are not the same. The sender might have a private key and the receiver a private key or vice versa.

Now as private keys are involved you can conclude that Blockchain cryptography is an asymmetric type of cryptography. On the encryption end public keys are used while on the decryption or receiving end private keys are used. Asymmetric cryptography is comparatively safer and more robust than symmetric. Just like in cryptography, the importance of keys in blockchain is highly valued. It’s even one of the core elements helping the blockchain ecosystem to operate securely. More about the relation between key and blockchain is highlighted in the next section so let’s proceed.

cryptographic principles in blockchain application

Role of Cryptography in Blockchain Development

Blockchain-based applications need a secure framework to operate. Cryptography is an essential component of that framework. Now when we state this obvious fact we are saying how blockchain is dependent on cryptography. This can be understood by knowing what blockchain is and what its application is.

A blockchain is a chain of blocks. Each block contains a set of information, which is to be transacted over a network. So to protect these blocks a cryptographic algorithm is important. Let’s further explore the role of cryptography in blockchain through understanding its various elements.

Elements Crucial for Synergizing the Role

Hash functions

A chain of blocks with information needs to level up its complexity before being transferred to a network. It can be done by passing the input through hash code, made up of mathematical functions. This function converts the fixed data into a long string of characters.

A hash code is divided into two parts and goes to the present block in the chain, while the other is in the previous block. A hash function helps to create an unbreakable chain of blocks that is much more complex to break into.

Key and Signature

In blockchain, Both public and private keys are utilized by a user. The pair of keys are used for two different purposes. Public is used for wallet and private is used for processing transactions.

A digital signature works as a passcode. The electronic signature and key should match in case anyone is trying to validate the proof of the transaction made.

Consensus Mechanism

A mechanism is implemented for the user to counter hacking and fraudulent activities. In this mechanism, cryptographic processes like building new blocks and validation proof of transactions are performed by users. So far the two most explored consensus mechanisms are Proof of Work and Proof of Stake.

Blockchain Heavily Relies on Cryptographic Principle

The contribution of cryptographic principles in blockchain application revolves around 4 fundamental points. Integrity, Confidentiality, Non-repudiation, and Authentication. It’s true that cryptography technology has evolved. But even today these advancements keep these principles at the forefront.

1. Integrity: The information will be unalterable between the transit on the network. If a modification takes place it will quickly notify the sender and receiver.

2. Confidentiality: Only the person who preordained to receive the information can access it.

3. Non-Repudiation: Once the information is in transit the sender and receiver cannot deny the initiation of information.

4. Authentication: The sender’s origin, identity, and destination of the information is absolutely certain or confirmed.

You can implement these principles at the core of any blockchain application as they synergize amazingly. By doing so you are creating and running transactions of information on a decentralized trust ecosystem.

When you look at it in simple terms you will find the functional application of cryptography in blockchain. The function of utilizing a secure and tamper-proof information channel. More like the blockchain becomes a transparent distributed ledger.


The working of cryptography, its principles, and its elemental foundation all explains its importance. As we all approach the industrial phase where data is oil, we are made sure to be resilient. Whether it’s for users to avoid the leaks of sensitive data or for people who contribute to national security, cryptography in blockchain technology is essential. It helps us to make secure transactions, and maintain integrity, trust and decentralization.

If you are fascinated by cryptography and its boundless potential you should try exploring it a bit more. Learn its business benefits, proper application, and much more. However, to fully implement or grasp the concept of blockchain and cryptography, hiring a blockchain development company will be the best idea.