Hey everyone. Welcome back to the course. Now after going through what blockchain is and learning about the history of the blockchain, let's check out some of the key concepts of the block chain which define the functionality and interaction capabilities of the blockchain. The most critical of all the concepts are the keys. A key in a cryptographic world is a string of secure alphanumeric characters, which help you to secure your data by encrypting the data. There are two types of key generation algorithms symmetric and asymmetric.

Symmetric cryptography algorithms generate only one key which is shared between the users. users use the same key to encrypt and decrypt the data. symmetric algorithms are faster than the symmetric algorithms, but the initial key distribution is always a problem with symmetric algorithms. Examples of symmetric cryptography algorithms are Yes algorithm used in TLS services, and the RC four algorithm used in wireless encryption services. The second type of key generation cryptographic algorithms is symmetric algorithms. These algorithms have a key pair where a private key is generated through a logic computation.

And a public key is derived from the private key. users who are sending the data can encrypt the data using their private key, and the users receiving the data can view the data using the sender's public key. As the name suggests, a public key can be made public and available to all a symmetric algorithms are one way algorithm where you can derive the public key from the private key, but vice versa is not possible. A symmetric algorithms are slower compared to symmetric algorithms. Moreover, generating a larger key size further affects the performance. You always need to balance out the performance and Security with key generation algorithms.

Examples of symmetric algorithms are RSA algorithm, which is used with access of servers in cloud computing and ECC algorithm which is used with the world of the blockchain. In blockchain, we use ECC algorithm for key generations. It is a type of symmetric algorithm and more secure than others. We don't directly use the private key and the public key ECC algorithm. We apply certain transformations and base conversions to make it suitable for blockchain. when importing ECC, private keys, a shorter format known as wallet import format, is often used, which offers a few advantages over the standard formats.

The wallet import format is more concise and includes built in error checking codes, so that typos can be automatically be detected and corrected. Moreover, it also includes special bits indicating how it is intended. To be used, the private key is used to generate a blockchain address from the public key hash values and checksum data are converted to an alphanumeric representation using a custom scheme to generate an accepted address for blockchain. blockchain addresses are like email addresses. You can send cryptocurrency to a person by sending coins to one of their addresses. Let's now understand how these three different entities work and why do we need them.

Private keys, private keys are required in the blockchain to generate a unique signature for the transaction. The generated signature can then be used for verification and validation of the transaction and showcase the ownership of a specific user. By checking the transaction signature, we can also verify that nobody has altered it. In simple words, private keys are used to sign the transactions containing cryptocurrencies which you want to transact with with other users, this signature for a transaction provides proof of ownership to other participants over the blockchain. private keys are like secret keys for your accounts. If someone opted in to your private key, then he or she can easily take out your cryptocurrencies.

This has happened with numerous hacks over exchanges throughout the world. Some exchanges store private keys on a secure centralized server, hackers were able to access and hack these central servers. This gave them the access to all the private keys of the users registered with the crypto exchange, and they were able to transfer the cryptocurrencies out of the user accounts by using the hacked private keys. A simple example of a private key is shown on the screen, where you can see that it is an alphanumeric string of a certain fixed length with different correctors. public keys are generated from the private keys and they are irreversible. You can generate rate of public key from a private key but vice versa is not possible.

Even a supercomputer may take millions of years to derive a private key from a given public key. public keys are named as such because they can be distributed to anyone in public. They are open for public viewing, and help the receiving party to verify the data. A person sending a transaction can encrypt the data using his private key, and on the other end, the receiver can verify the data using the public key provided to him by the same person. You can see an example of public key on the screen. This is also an alphanumeric string similar to a private key.

The example public key is generated from the ACC algorithm. Every public key is 256 bits long in blockchain, and the final hash, which is also your wallet address, derived from the public key is 160 bits long. ECC uses the coordinate system for cryptography Test the generated public key has both x and y coordinates. addresses are generated from the public key, where it represents a possible destination for and cryptocurrency payment or data upload. an address is also an alphanumeric string of fixed length, which is generated by transforming public keys through hash functions and encodings. Several correctors inside an address are used as a checksum so that typographical errors can be automatically found and rejected.

For example, in Bitcoin addresses are 34 characters. They consist of random digits, an uppercase and lowercase letter, with the exception that the uppercase letter or uppercase letter I, lowercase letter L, and the number zero are never used. This is to prevent visual ambiguity. addresses always appear between a transaction where to parties are sending some data or currency. A simple example of address can be seen on the screen. This image shows the generation hierarchy for keys and addresses.

A private key is a large, randomly generated number. different algorithms have different parameters for the generation of private keys. For example, in the RSA algorithm, a private key is a large random prime number. A public key is generated from a private key and distributed to everyone. This is a one way algorithm where you can easily generate a public key from a private key, but the reverse is not possible. A person sending a transaction or data can encrypt the data using the private key and the others who want to view the data can use the sender's public key to access the data.

And address is generated from the public key by putting the key through different transformations and encodings. an address is used to receive the transaction in blockchain We have already discussed a bit about addresses and keys. To know more. You can also go through the wiki pages containing the research papers on the blockchain. Apart from the keys, another central concept of blockchain is transactions. Now let's go and learn about transactions.