What is CRYPTOGRAPHY?

How can digital money exist without a bank — and still remain secure?
Part 1
This question is at the heart of cryptography and its role in the cryptocurrency market. Cryptography is the science of securing information using mathematical techniques so that only authorized parties can access, verify, or modify it. In cryptocurrencies, it replaces traditional trust systems (like banks) with mathematical proof.

Digital currencies such as Bitcoin and Ethereum rely entirely on cryptography to secure transactions, verify ownership, and maintain decentralized networks.

What is Cryptography?
Cryptography is the process of converting readable data (plaintext) into an unreadable form (ciphertext) using algorithms and keys. Only someone with the correct key can reverse the process.

Its major goals in cryptocurrency include:
Confidentiality – Protecting user information
Integrity – Preventing data alteration
Authentication – Verifying transaction ownership
Non-repudiation – Ensuring senders cannot deny transactions.

Cryptocurrencies use asymmetric cryptography, which involves two keys:

• Public Key – Shared openly (used as wallet address)
• Private Key – Kept secret (used to sign transactions)

Public Key Cryptography
A widely used algorithm is Elliptic Curve Digital Signature Algorithm (ECDSA).


How It Works:

1. A user generates a private key.
2. A public key is derived mathematically from it.
3. When sending cryptocurrency, the user signs the transaction with the private key.
4. The network verifies the signature using the public key.
5. If valid, the transaction is approved.

This ensures only the rightful owner can spend the funds.