Article Written By Wilton Thornburg
Introduction to Cryptography
"There's nothing you can know that isn't known.
Nothing you can see that isn't shown.
All you need is...PUBLIC KEY CRYPTOGRAPHY!!!"
- with apologies to Lennon-McCartney
Without public key cryptography, cryptocurrency
fails. Public key cryptography proves ownership and enforces privacy. It
arrived relatively recently, though, appearing on the scene in the
mid-1970's at the same time as the personal computer revolution.
The
art and science of cryptography encode (i.e., encrypt) messages so that
no one can read them except the intended audience. Only the proper
recipient decodes (i.e., decrypts) the message, maintaining privacy
between communicators.
A key is used to encrypt and decrypt messages.
In asymmetric cryptography (another name for public key cryptography),
the key to encrypt a message is different from the key to decrypt the
message.
In symmetric encryption, the key to
decrypt a message is the same as the key used to encrypt it. This
strategy creates a key distribution problem: the sender not only has to
send the message but also find a secure way to send the key as well.
When a villain intercepts the key and the message both, privacy
disintegrates.
Whitfield-Diffie Key Distribution Solution
Linguistics,
language, and puzzle skills ruled cryptography through most of history,
but from the mid-twentieth century onward, math has been predominant.
In
the 1970's at Stanford University, Whitfield Diffie, Martin Hellman,
and Ralph Merkle found a mathematical solution to the key distribution
problem. In their solution, they used modular arithmetic and one-way
functions. (Among other accomplishments, Ralph Merkle also contributed
greatly to cryptocurrency as the inventor of Merkle trees.)
Modular
arithmetic deals with remainders and incorporates a set of numbers that
wrap around to the beginning after a certain point. That is, 7 mod 3
equals 1 because 1 is what remains after dividing 3 into 7. A 12-hour
clock provides the most common example of the wrap-around nature of
modular arithmetic. If it's 8:00 a.m. now, 6 hours from now will not be
14:00 o'clock but 2:00 p.m. The main point to remember is that modular
arithmetic behaves non-intuitively and yields unexpected results.
In
mathematics, one-way functions execute easily but strongly resist
reverse engineering. Think of a bowl of soup served in a restaurant. The
cook easily followed the recipe to create it, perhaps even improvising
some ingredients at hand. You may well be able to detect this flavor and
the spices, but without the recipe and exact ingredients the chef used,
you'll have a difficult time duplicating that bowl of soup.
In
the Whitfield-Diffie algorithm, correspondents share some public
information for the key but keep private information that prevents an
eavesdropper from reproducing that key. The team presented their
solution publicly in June 1976 at the National Computer Conference.
Enter Asymmetric Cryptography
Whitfield-Diffie solves the key distribution problem but still uses symmetric encryption.
Upon
learning of the Whitfield-Diffie solution, Ron Rivest, Adi Shamir, and
Leonard Adelman at the MIT Laboratory for Computer Science began
building on those mathematical concepts to discover a solution for
asymmetric encryption. In April 1977, they succeeded. This became known
as RSA after the names of the creators.
In
asymmetric encryption, you publish a public key that everyone knows.
People use this to encrypt messages that only you can decrypt because
you know the private key. Simply put, a public key is just a number
created by multiplying two numbers of the private key. If the numbers
used are sufficiently large, discovering those two numbers is
computationally intensive and time-consuming.
Encryption for the Rest of Us
Using RSA encryption challenged the resources of the
computers in those days. Encryption belonged only to the powerful and
wealthy - the military, governments, large corporations, etc. Paul
Zimmerman envisioned encryption available to anyone with a personal
computer. He implemented Pretty Good Privacy (PGP) and released it to
the public for free in June 1991.
Zimmerman
overcame the resource intensive computational slowness of asymmetric
encryption by implementing a hybrid algorithm. The message itself used a
symmetric key, and asymmetric cryptography encrypted the key to safely
send it with the message.
Hello, Hal Finney
The first employee Phil Zimmerman hired at PGP was
Hal Finney. Hal Finney would become the first person to show any
interest when an unknown person calling himself Satoshi Nakamoto arrived
on the scene in 2008 proposing something he called Bitcoin.
Multiple
attempts to create private digital money protected by asymmetric
encryption failed throughout the 1990's. In Amsterdam, David Chaum
created DigiCash but required all transactions to be validated by a
centralized company. DigiCash failed when Chaum's company went bankrupt
in 1998. British researcher Adam Back created HashCash in 1997 utilizing
a Proof of Work method to create new coins. HashCash failed because a
coin could only be used once. Users needed to create new coins every time they wanted to purchase something.
Hal
Finney solved the HashCash problem by making the first reusable proof
of work system (RPOW). He made his attempt at a digital money project
with something he called CRASH (for Crypto cASH). (Lesson learned: call a
computer program CRASH and expect it to fail.)
Hello, Bitcoin
Hal Finney became the first
person after Satoshi to run a Bitcoin node and was the first recipient
of Bitcoin from the first transaction on the network.
Hal
encouraged Satoshi with the wisdom of a seasoned pro who has not grown
jaded with cynicism: "Imagine that Bitcoin is successful and becomes the
dominant payment system in use throughout the world. Then the total
value of the currency should be equal to the total value of all the
wealth in the world...Even if the odds of Bitcoin succeeding to this
degree are slim, are they really 100 million to one against? Something
to think about."
Later on, Hal Finney contracted the fatal disease of ALS and posted some parting words to the community on March 19, 2013:
"After
a few days, bitcoin was running pretty stably, so I left it running.
Those were the days when difficulty was 1, and you could find blocks
with a CPU, not even a GPU. I mined several blocks over the next days.
But I turned it off because it made my computer run hot, and the fan
noise bothered me...The next I heard of Bitcoin was late 2010, when I was
surprised to find that it was not only still going, bitcoins actually
had monetary value. I dusted off my old wallet, and was relieved to
discover that my bitcoins were still there. As the price climbed up to
real money, I transferred the coins into an offline wallet, where
hopefully they'll be worth something to my heirs."
Final Thoughts and Further Reading
The
history of cryptography from Whitfield-Diffie to Bitcoin and beyond
continues to progress. Math provides the foundation. Modern math unlocks
possibilities unheard of before the middle of the twentieth century.
Mathematical research continues, and when quantum computing becomes
common, new mathematical possibilities will emerge.
Beyond math,
decentralization drives the history of modern cryptography. Everyone
deserves privacy. When Rivest, Shamir, and Adelman created public key
cryptography, only powerful and centralized organizations benefitted
immediately. Phil Zimmerman's Pretty Good Privacy (PGP) expanded the
market to include anyone wanting to use cryptography on a personal
computer. With Bitcoin, anyone who uses the cryptocurrency gets the
privacy of public key cryptography as an integral component of the
system.
Further Reading
Many sources provide further in-depth information on the history of cryptography and its emergence in cryptocurrency:
A popular book on the history of cryptography is Simon Singh's The Code Book: The Science of Secrecy from Ancient Egypt to Quantum Cryptography.
The early chapters of Nathaniel Popper's Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money cover the early history of cryptocurrency.
Archives, articles, and a wealth of primary material can be found here.
##
Article was originally published on CoinCentral.com.