Monday, August 29th, 2022 | Cryptostotle #15 | By: Brad Lathrop
Many of you may already know that “crypto” is short for cryptography. When you hear the word cryptography, what do you think of?
Some of you might think of ancient codes that needed to be deciphered in order to be understood. I do.
Wikipedia has a good description of ancient cryptography:
“Before the modern era, cryptography focused on message confidentiality (i.e., encryption)—conversion of messages from a comprehensible form into an incomprehensible one and back again at the other end, rendering it unreadable by interceptors or eavesdroppers without secret knowledge (namely the key needed for decryption of that message).” (Source: Wikipedia – Cryptography)
Today, however, cryptography looks much different, but the general principles are still the same.
Cryptography (in our context) is the process of preventing third parties from gaining access to private communications. Such communications include private messages and private transactions.
Now let’s consider cryptography in relation to Bitcoin. Remember that Bitcoin is a decentralized protocol (network) that enables the secure exchange of bitcoin between two parties.
When someone purchases, sells, or sends bitcoin, a transaction takes place and is recorded on the Bitcoin blockchain (the blockchain is like a ledger). The block that is created does not contain any personal information about the parties involved in the transaction. It is essentially anonymous.
Bitcoin.org really puts it nicely:
“In the case of Bitcoin, cryptography is used to make it impossible for anybody to spend funds from another user’s wallet or to corrupt the block chain. It can also be used to encrypt a wallet, so that it cannot be used without a password.” (Source: Bitcoin.org)
So, in short, the crypto in cryptocurrency means cryptography, which helps enable the security and anonymity of cryptocurrency transactions.
To learn more about this subject, we recommend reading a great article by Investopedia called, Explaining the Crypto in Cryptocurrency.
