UNIT 2 BLOCKCHAIN

1. Public-Key Cryptography:

• Based on the principle of mathematical one-way functions.

• Uses two different keys: a public key and a private key.
• The public key is used for encryption, while the private key is used for decryption.
• Enables secure communication and data exchange over insecure channels.
• Widely used in digital signatures, encryption, and key exchange protocols.
• Relies on the computational difficulty of certain mathematical problems, such
as integer factorization or discrete logarithms.
• Popular algorithms include RSA, Diffie-Hellman, and Elliptic Curve Cryptography
(ECC).
• Allows for non-repudiation, ensuring that the sender cannot deny having sent the
message.
• Provides authentication, ensuring that the message originated from the claimed
sender.
• Enables key distribution and management without the need for a secure
channel.

2. Public Key and Private Key Combinations in Blockchain Security:

• Blockchain uses public-key cryptography for secure transactions and data

integrity.
• Each user has a unique pair of public and private keys.
• The public key is derived from the private key and serves as the user's address on
the blockchain.
• Transactions are digitally signed using the user's private key, ensuring
authentication and non-repudiation.
• Signed transactions are broadcast to the network and verified using the
corresponding public key.
• Private keys must be kept secure and never shared, as they control access to the
user's blockchain assets.
• If a private key is lost or compromised, the associated assets become
inaccessible.
• Public keys can be safely shared and used to receive transactions.
 • Key management and secure storage of private keys are crucial for blockchain
security.
• Multi-signature wallets and hardware wallets provide additional security for
private key storage.

3. Hashing:

• Hashing is the process of mapping data of arbitrary size to a fixed-size output,

called a hash or digest.
• Cryptographic hash functions are one-way functions, making it computationally
infeasible to reconstruct the original data from the hash.
• Hash functions are deterministic, meaning that the same input will always
produce the same output hash.
• Even a slight change in the input data results in a completely different hash
value.
• Hashes are used for data integrity verification, digital signatures, and secure
password storage.
• Popular hash functions include SHA-256, SHA-3, and BLAKE2.
• Blockchain uses hashing to link blocks together and ensure data integrity.
• Each block contains the hash of the previous block, forming an immutable
chain.
• Modifying data in a previous block would invalidate all subsequent blocks due to
the hash chain.
• Hash functions play a critical role in the consensus mechanisms of blockchains,
ensuring tamper-resistance and transparency.

4. Transaction Integrity:

• Transaction integrity is crucial for maintaining the security and trust in

blockchain systems.
• Digital signatures using public-key cryptography ensure transaction authenticity
and non-repudiation.
• Transactions are broadcast to the network and verified by all nodes before being
included in a block.
• Each transaction includes the sender's public key, ensuring that only the owner
with the corresponding private key could have initiated the transaction.
 • Transactions are hashed and included in a Merkle tree structure within each
block.
• The Merkle root hash represents all transactions in the block and is included in
the block header.
• Any modification to a transaction would result in a different Merkle root hash,
invalidating the block and all subsequent blocks.
• Transaction integrity is maintained through the immutable and tamper-evident
nature of the blockchain.
• Double-spending is prevented by the consensus mechanism and the shared
ledger maintained by all nodes.
• Transaction integrity is essential for ensuring the reliability and trustworthiness
of blockchain-based systems.

5. Securing Blockchain:

• Blockchain security relies on a combination of cryptographic techniques,

decentralization, and consensus mechanisms.
• Public-key cryptography and digital signatures ensure secure transactions and
user authentication.
• Hashing and Merkle trees provide data integrity and tamper-resistance.
• Decentralization and distributed consensus mechanisms prevent single points
of failure or control.
• Proof-of-Work (PoW) and Proof-of-Stake (PoS) are popular consensus algorithms
that secure the blockchain network.
• Node diversity and geographical distribution increase the resilience and security
of the network.
• Smart contract security is crucial to prevent vulnerabilities and ensure the
integrity of decentralized applications (DApps).
• Secure key management and storage are essential for protecting user assets and
maintaining control over blockchain addresses.
• Blockchain networks should implement robust access control mechanisms and
permissions management.
• Continuous monitoring, auditing, and security updates are necessary to address
emerging threats and vulnerabilities.