Cryptocurrency Mining For Dummies. Peter KentЧитать онлайн книгу.
to say that they own it!
But what about the wallet? The wallet must store money, right? No, cryptocurrency wallets do not store cryptocurrency. They store private keys, public keys, and addresses. Private keys are the most important because they control the addresses with which your cryptocurrency is associated in the blockchain.
What’s the Crypto in Cryptocurrency?
The crypto in cryptocurrency refers to cryptography. So, what exactly is cryptography?
According to The Oxford English Dictionary, cryptography is “the art of writing or solving codes.” Wikipedia’s explanation is more complicated and more digital: “The practice and study of techniques for secure communication … cryptography is about constructing and analyzing protocols that prevent third parties or the public from reading private messages.”
The history of cryptography goes back at least 4,000 years. People have always needed to send secret messages now and then, and that’s what cryptography is all about.
Today’s cryptography, with the help of computers, is far more complicated than the ancient ciphers of the classical world, and it’s used more extensively. In fact, cryptography is an integral part of the Internet; without it, the Internet just wouldn’t work in the way we need it to work.
Almost every time you use your web browser, you’re employing cryptography. Remember the little lock icon, shown in Figure 1-2, in your browser’s Location bar?
FIGURE 1-2: Your browser’s lock icon means that data submitted back to the web server will be encrypted with cryptography.
The lock icon means the page is secured. When you send information to and from the browser to the web server and back, that information is going to be encrypted — scrambled — so that if it’s intercepted on the hundreds or thousands of miles of Internet transmission between the two, it can’t be read. When your credit card number is transmitted to an ecommerce site, for example, it’s scrambled by your browser, sent to the Web server, and then unscrambled by the receiving server.
Ah, so, the blockchain is encrypted, right? Well, no. Cryptocurrency uses cryptography, but not to scramble the data in the blockchain. The blockchain is open, public, and auditable. Figure 1-3 shows you an example of a blockchain explorer designed for Bitcoin. Using a blockchain explorer, anyone can investigate the blockchain and see every transaction that has occurred since the genesis block (the first block of Bitcoin created).
FIGURE 1-3: An example of a blockchain explorer tool, found at https://live.blockcypher.com/btc
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ENCRYPTED BLOCKCHAINS
You can build encrypted blockchains and encrypt data within a blockchain. For example, while the Bitcoin blockchain is unencrypted and open to inspection by anyone (see the blockchain explorer in Figure 1-3), it is still possible to create encrypted blockchains that obscure the transaction data, such as Zcash, but, in general, cryptocurrency blockchains are not encrypted, so anyone can read the transactions stored within them.
No, cryptocurrency isn’t used to encrypt the data in the blockchain. It’s used to sign messages that you send to the blockchain. These messages are the ones that trigger transactions and updates to the blockchain ledger.
Public Key Encryption Magic
Public key encryption is a clever little trick created using digital cryptography. And, by the way, this type of encryption is all accomplished using hugely complicated mathematics — the sort of mathematics that even most people with degrees in mathematics don’t understand, the sort of mathematics that has names like Carmichael numbers and Goppa codes, the sort of mathematics that we certainly don’t understand, and you don’t either (well, most of you, dear readers, don’t). But that’s fine: Gravity isn’t well understood either, but we all use it every day.
So, forget how this amazing stuff works, and consider instead what it is actually accomplishing. Now, imagine a safe, with two keyholes and two associated keys. One is a public key, and one is a private key. Now imagine that you put something into the safe and lock it using the public key. Once the door is closed and locked, the public key no longer has access to the safe; it can’t be used to unlock the safe and extract the item. The private key, however, will work. The only way to open the safe is to use the private key.
In fact, this magical mathematical safe works both ways. You can lock it with the private key, but after you lock it, you can’t use the private key to open the safe. Only the public key will open a safe locked with a private key.
Oh, and these two keys are magically associated. They work only with each other and no other keys. Private Key X will work only with Public Key X, and vice versa. You can’t lock the safe with Public Key X and then unlock the safe with Private Key W or Private Key K, for example.
Okay, same principle, but now think of electronic messages. You can lock an electronic message with a public key — that is, you can use a key to scramble, or encrypt, the message. That message may be an email or information being sent from your browser to a web server.
After that locked (encrypted) message is received at the other end (the email recipient or the web server), only the private key can unlock it; the public key is useless at this point. And it must be the magically associated (okay, mathematically associated) key, and no other.
Encryption is a handy tool. It means I can give you a public key, and you can write me a message and encrypt it using the public key, and once encrypted nobody in the world can read it unless they have the private key. So, if I’m carefully protecting my keys, I’m the only person in the world who can read it.
The names of these keys aren’t arbitrary. The private key should be truly private — only you, and nobody else in the world, should have access to it. The public key can be truly public. You can give it away. For example, if you want to have people email their messages to you, you can publish your public key — on your website, in the footer of your emails, on your business card, or whatever — so that anybody who wants to send a message to you can encrypt it with your public key knowing that you are the only person in the world who can read it (because you keep the private key secret).
How do you encrypt emails? Email encryption has been around for decades, but it simply never caught on with the public at large. Still, you can encrypt email from most email systems, such as Outlook, Gmail, and Yahoo! Mail, and there are systems, such as ProtonMail, that encrypt it by default.
This process is essentially what your web browser uses when you send your credit card information online; the browser uses the web server’s public key to scramble the data so that only the web browser, with the associated private key, can decrypt and read the credit card information. (Okay, that’s a simplification. Browser-to-server communication is more complicated than this description, involving temporary session keys, and so on; but the basic principle still applies.)
Messages to the blockchain
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