The role of public keys in the security of cryptocurrency: findings by Cardano (ADA)
Cryptocurrencies have revolutionized the way we think about money and financial transactions. With the emergence of blockchain technology, cryptocurrencies such as Bitcoin and Ethereum have achieved widespread acceptance as an exchange. Despite their growing popularity, cryptocurrencies are still considerable security challenges.
One of the most critical aspects of cryptocurrency security is the use of public keys, which are also referred to as private keys or addresses. These keys are used to validate transactions on the blockchain and to control access to certain assets. In this article, we will examine and examine the role of public keys in the security of cryptocurrencies and how Cardano (ADA) uses public keys to improve the safety of its platform.
What are public keys?
In a blockchain network, each user is assigned a clear public key that serves as a digital identity. This public key is used to validate transactions and to control access to certain assets in the network. The private key, also known as seed phrase or restoration phrase, is used to create several addresses and new coins.
How public keys work
If a user sends cryptocurrency from one address to another, it must be checked by the knots on the blockchain (i.e. computer, the transactions validate). To check a transaction, a knot must receive a public key. If the sender’s public key matches the recipient’s public key, it is considered valid and the transaction can be continued.
The problem with public key
However, several security concerns are associated with public keys:
- weaknesses in hash functions : Many cryptographic hash functions to secure cryptocurrency transactions are susceptible to collisions or preparatory attacks.
- Key exposure : If a private key is impaired, the attacker can steal all coins connected to this address.
- Privatscheldiebe : Private keys can be stolen by phishing, social engineering or other means.
Cardanos approach
In order to alleviate these risks, Cardano has developed a new approach to secure cryptocurrency transactions using public keys. By using their extensive experience in developing and implementing large blockchain systems, Cardano can create more robust and more resilient safety protocols.
One of the main features of Cardano’s approach is the use of
zero knowledge-proofs (ZKPS)
. With ZKP, users can demonstrate the validity of transactions without revealing their private keys. This enables a safe and efficient transaction check on the blockchain without clearing confidential information.
How Cardano uses public keys
Cardano uses public keys in different ways:
- Proof-of-Stake (POS) consensus salgorithm
: In POS consensus salgorithms that control a large part of the network’s mining performance, use your private keys to create new coins and validate transactions.
- Secure Multi-Party calculation (SMPC) : SMPC enables several parties to carry out calculations together without indicating the input or output of a single party. This is useful for secure data processing and transaction check in the blockchain.
- Decentralized application development (DAPP) Development : The Cardano platform enables developers to create decentralized applications with a variety of intelligent contracts that are carried out on the blockchain.
Diploma
Cryptocurrencies continue to develop quickly and security remains one of the most critical challenges. By using their specialist knowledge in the development of large blockchain systems, Cardano can create more robust and more resilient safety protocols. Public keys play an important role in these protocols and offer a secure basis for transaction check and asset management on the blockchain.