Understanding the Role of Encryption in Blockchain


blockchain encryptionBefore we get into the specifics of blockchain encryption, let us first define encryption. I’m sure we’ve all come across this sentence in our Whatsapp conversations, where it says, “Messages you send to this chat and calls are now secured with end-to-end encryption. Tap for more info.”

Encryption is the process of encoding data so that it is concealed from or unavailable to unauthorized users. It aids in the protection of private information and sensitive data, as well as the security of communication between client applications and servers.

Now, what is the role of encryption in blockchain? Read on to find that out.

Blockchain Encryption

Blockchain is a distributed ledger that is decentralized, verifiable, non-tampered, secure, and dependable. P2P (Peer-to-Peer) protocol, digital encryption technology, consensus mechanism, smart contract, and other technologies are all integrated.

Blockchain encryption keeps critical information out of the wrong hands, where it might be abused or fabricated. John O’Rourke, CEO of Riot Blockchain, discusses how this encryption works.

The blockchain ledger contains a record of every transaction that has ever occurred on that blockchain. That transaction is validated, published, and protected by anybody on that blockchain network, according to O’Rourke.

The way blockchain and encryption security function is via a mining network and based on arithmetic. “It’s basically basing your faith in math vs. basing your faith in some other trusted party that could potentially be hacked,” he said.

The monetary part of the award incentivizes anybody who is committed to safeguarding the blockchain. Every transaction that is confirmed by solving an algorithm is added to the blockchain if it is authorized by a consensus of more than 51 percent of the blockchain network. Once a transaction has been added, it cannot be modified.

It’s all about arithmetic, he says, and a reward system with the right incentives. People solve algorithms that confirm every transaction before it is uploaded to the blockchain.

Any system that still relies on paper records, he adds, is archaic. “The blockchain allows all that to be digitized, and secured with every single transaction on that ledger,” O’Rourke said.

Blockchain Encryption Algorithm

To ensure anonymity, we often use encryption methods such as AES. We use digital signatures for the other three attributes.

There are two kinds of encryption:

1) Symmetric-Key Cryptography– In this encryption approach, we use a single key. This common key is utilized in both the encryption and decryption processes. Using a single common key raises the issue of securely passing the key between the sender and the recipient. It is also known as Secret-Key encryption, single-key encryption, shared-key encryption, one-key encryption, and private-key encryption.

Symmetric key encryption makes use of one of the following encryption methods:

  • Stream ciphers: encrypt the numbers (typically bytes), or letters (in substitution ciphers) of a message one at a time
  • Block ciphers: encrypts a group of bits as a single unit, adding the plaintext to make it a multiple of the block size. 64-bit blocks were regularly utilized. The NIST-approved Advanced Encryption Standard (AES) algorithm and the GCM block cipher mode of operation both employ 128-bit blocks.

Symmetric key cryptography is based on the use of a shared key between two parties. Asymmetric key cryptography employs a public-private key pair, with one key encrypting and the other decrypting.

Symmetric cryptography is more efficient and hence better suited to encrypting and decrypting huge amounts of data. Asymmetric cryptography is inefficient. Thus, it is only used to exchange a shared key, following which the symmetric key is used to encrypt/decrypt data.

2) Asymmetric-Key Cryptography– This encryption technique employs a pair of keys, an encryption key and a decryption key, which are referred to as the public key and private key, respectively. The key pair produced by this method consists of a private key and a unique public key produced by the same process. It’s also known as Public-Key Cryptography.

A public-key encryption system’s most apparent use is for encrypting communication to guarantee secrecy – a message that a sender encrypts using the recipient’s public key and can only be decoded by the recipient’s matched private key.

The digital signature is another use of public-key cryptography. Sender authentication may be accomplished via the use of digital signature techniques.

Asymmetric encryption is also used in the creation of digital signatures.

Blockchain Data Encryption   

What about the privacy and security of data? Sure, no one can edit data once it’s on the blockchain, but what if I didn’t want anybody reading it? You may leverage a public blockchain to your advantage by storing data or hashes of data that you don’t mind being public, or you may utilize encryption, such as zero-knowledge proofs, to ensure that the data can only be decrypted by known parties. The fourth approach is to partition and isolate the data using private enclaves.

But what if your use case necessitates securely storing that data and just sharing need-to-know information with your consortium chain peers? With Hyperledger Besu’s privacy and provisioning capabilities, you can ensure that data is only seen by those who are supposed to see it. All of this, however, assumes that your infrastructure has impenetrable security that will never be breached.

Data at rest encryption ensures the privacy and confidentiality of blockchain data saved on the database by encrypting it with a specified key that is complicated and is kept securely elsewhere. This implies that if the database was “spied” on, the information would be worthless to the viewer without the decryption key.

Blockchain Encrypted Messaging

How private is our conversation? This topic has emerged in recent months as a result of a rush of news reports. They document the weakening of encrypted chat applications at the request of law enforcement. A systematic attempt by the government to backdoor messaging applications and snoop on our most private communications should worry every member of the cryptocurrency community. Many of these are anxious for an impenetrable programme that will not disclose their secrets.

Deliberations have raged within the crypto community. They concern the advantages of popular encrypted messaging applications. These could be Telegram and Signal. Telegram, a cloud-based platform, has seen enormous success. With hundreds of millions of downloads; its goal is to surpass 1 billion by 2022. Telegram is well-known in the cryptocurrency community, having held a $1.7 billion token sale last year. But, the technology is not open source. Thus, users must rely on Telegram to keep its promises about message security against retention and interception.

Signal is an improvement over Telegram. Its goal is to reduce data retention earning praise from many privacy zealots. This also includes Edward Snowden. Unlike Telegram, the free programme is open source, and all communications are encrypted end-to-end. But, it lacks several features that consumers may like. Some individuals are also concerned about having to use their contact information. It could be for authentication, which might lead to further security problems.

Debrief is a decentralized messaging network. It is an intriguing option since it uses the blockchain for data storage, encryption, and authentication. All communications are encrypted by default. Debrief adheres to the same data retention policy as Signal (i.e. no stored chat logs). The platform also serves as an open-source middleware for blockchains and conventional communications technologies, allowing them to use its blockchain-based encryption protocols to improve security and internal data privacy. “By foregoing centralized control, we will eliminate the weak link in the equation — third parties,” adds co-founder Jeff Pulver.

Dust (formerly known as Cyber Dust) is yet another blockchain-based, pro-privacy messaging software. It uses the vanishing message function to make sensitive data ephemeral. Messages, however, self-destruct after 24 hours. This leaves some users questioning if automated self-deletion would be better. Dust launched in March of 2014, making it a veteran in this field — the fact that it is still widely used for text conversation is a positive indicator.


Fortunately, we can safeguard data on blockchains while keeping them valuable. In reality, we not only can, but also must do this in order to keep blockchain technology effective.  Asymmetric cryptography is often known as public cryptography. It is a crucial part of cryptocurrencies such as Bitcoin and Ethereum. These powerful cryptographic mechanisms guarantee that the origin of transactions is genuine. This also suggests that hackers are unable to steal the assets of a user.

About the author

My name is Rachita, which means creation! I was probably destined to create blogs. Writing is becoming more appealing to me with every passing day. I started writing for my journal and soon started to write about new tech in the industry which piqued my interest. Currently, I work with a blockchain development company in the USA that gave me this opportunity to explore the domain and hone my skills further by learning about blockchain and spread the knowledge.

Follow us on Instagram and subscribe to Knowlab.