If you’ve been to any parties lately, you may have seen small huddles of people, standing in corners, earnestly chatting about BitCoin and BlockChain technology in particular. Seemingly the latest soundbite where people gather together, cryptocurrencies are all the rage and it’s easy to get left behind in such a fast-moving technological world. But fear not; by the end of this article, you too will be an expert in this mysterious item.
BlockChain is not a cryptocurrency in itself, but is the means of linked transactions or ledgers that allow cryptocurrencies such as BitCoin and Ether to operate as a tradable currency. It is the scaffolding that allows cryptocurrencies to operate and ensure that once a client has purchased a certain amount of the currency, it cannot be removed from their possession or spent without their consent. It is, effectively, a growing chain of related information or records, termed ‘blocks’ which identify the currency. Typically, each block contains certain information including a hash pointer which links each block to the previous one, transaction data and a timestamp. While all of these elements are important to each block and the overall function of the BlockChain, the hash pointer is one of the major parts as it helps prevent access to the information by any unauthorised entry.
In computer terms the hash function is used to map data of an arbitrary size to data of fixed size and are often found in look-up tables where they may be used to detect duplicate data. The cryptographic hash has certain specific properties that make it useful in the encryption of cryptocurrency. Ideally cryptographic hash functions have five main properties:
- it is deterministic so the same message always results in the same hash,
- it is quick to compute the hash value for any given message,
- it is infeasible to generate a message from its hash value except by trying all possible messages, which is an almost impossible task,
- a small change to a message should change the hash value so extensively that the new hash value appears uncorrelated with the old hash value, and,
- it is infeasible to find two different messages with the same hash value
Because of these elements, hash functions make an excellent means of data encryption through digital signatures and message authentication codes (MACs), which find increasing use in digital transactions.
The hash pointer together with certain other essential elements make BlockChain a highly secure transaction, which is recognised as being secure by design – I.E. its security was the most fundamental part of the code design and is an intrinsic element of its structure.
Cryptocurrencies are now not only emerging but have become a major part of many online transactions, but unlike physical currency, they cannot be forged and are therefore the logical future of currency, however much banks and Governments may not like it. These kinds of transactional units are destined to be the future because they are secure but have the added benefit of being free from external manipulation. Currency flow and availability have been in the hands of bankers ever since the inception of coins, but cryptocurrencies – driven by BlockChain technology – takes that power away, and within a few years banking will change out of all proportion, and this time, it is the ordinary public who are in the driving seat!
By David Layzelle
Taken from the February 2018 issue of Geek Parenting, out now!