Blockchain technology makes it possible to solve business problems in ways that were previously impossible. A major enabler of this is the decentralization of the blockchain’s digital ledger.
Blockchain’s decentralization works because many of the functions of a centralized authority — such as maintaining the integrity of the ledger — are replaced with cryptography. Asymmetric or public key cryptography is a key part of what makes blockchain technology possible.
Asymmetric cryptography in the blockchain
Asymmetric cryptography is useful because it uses two different keys: a private key and a public key. The private key is used for signing messages and decrypting data, while the public key is used for validating signatures and encrypting data.
The use of asymmetric keys makes public key cryptography ideally suited for blockchain technology. Actions taken using the private key can be validated using the corresponding public key. Blockchain technology uses asymmetric cryptography for identity management and transaction authentication.
Public key addressing
One of the main benefits of blockchain technology is that it’s pseudonymous. Blockchain users don’t need to reveal their true identities to create an account on the blockchain or to use it.
Instead, individual blockchain accounts are identified using addresses. These addresses are