How Blockchain Works?
Blockchain is a complex concept, consisting of a blend of different technologies, each one a foundational pillar in making blockchain the revolutionary offering that it is. In this chapter of the Lisk Academy we will explore these technical aspects individually and detail why they are so important.
A lot of people use cryptography on a daily basis without realizing it as many popular messaging apps use encryption. It is also one of the core aspects of blockchain technology. In this segment of the Lisk Academy we will provide a simple yet detailed explanation of cryptography, both symmetric and asymmetric key cryptography.
The code base for most ciphers are open source projects, meaning their code can be examined by anyone. The most widely used cipher in the world called is AES, is free for anyone to use and its code is open to viewing by the public. As a result, it has been studied in considerable detail and to date no vulnerabilities have been discovered. This cipher is also used by the NSA, the United States intelligence agency, as the tool of choice for encrypting information. Therefore, the security of information recorded on a blockchain can be regarded to be as secure as some of the most sensitive secrets in the world.
What is Public-Key Cryptography?
- A key generation algorithm, providing a private and public key.
- A signing algorithm that combines data and private key to make a signature.
- An algorithm that verifies signatures and determines whether the message is authentic or not based on the message, the public key and signature.
- Making it absolutely impossible to work out the private key based on the public key or data that it has encrypted.
- Ensuring the authenticity of a signature based on the message and the private key, verified through the public key.
Running a Lisk Blockchain Node
Hashing secures data by providing certainty that it hasn’t been tampered with before being seen by the intended recipient. So, as an example, if you downloaded a file containing sensitive information, you could run it through a hashing algorithm, calculate the hash of that data and compare it to the one shown by whoever sent you the data. If the hashes don’t match, you can be certain that the file was altered before you received it.
An Explanation of Data Structures
What are Merkle Trees?
- Hash of the previous block
- The block version number
- The current difficulty target
Consensus Protocol Rules
Consensus protocols also provide participants on the network who are maintaining a blockchain with rewards and incentives to continue doing so. These rewards come in the form of cryptocurrencies or tokens, which can be extremely lucrative, so much so that competition to confirm the next block in a chain is extremely fierce.
Delegated Proof of Stake