Since ancient times, cryptography has been used in various applications mostly for war-waging and espionage. For instance, when a warlord wants to send over his battle plan to a group of soldiers from a far-away distance, that warlord would send an “encrypted” message that only those soldiers can figure out.
Once the message arrives, those soldiers will then “decrypt” the message so it will be comprehensible from their perspective. Technically, sending cryptographic messages works by giving a cipher message that will be later deciphered by the receiving party.
One of the most popular stories about cryptography was During World War II, when Alan Turing, a British computer scientist successfully built a machine called “The Bombe” that can decrypt “The Enigma” messaging system of the Germans.
Using that decryption machine, The British were able to figure out the next set of attacks that Hitler’s army was planning. The simplest analogy that we can use to understand cryptography quickly is that a set of words are assigned with a set of numbers or alphanumeric codes so they can’t be understood by unwanted onlookers.
For instance, a commanding officer’s message would appear as: “EAT BURGER AT BREAKFAST.” But upon arrival to that officer’s platoon of soldiers, it would be decrypted as “ATTACK VILLAGE AT SUNDOWN.” Of course, real cryptography works much more complex than that.
A given cipher could appear as a message in a plain, ordinary-looking paragraph, or it could just be a set of jumbled words and characters. But upon deciphering it using a set of key codes, the message could be transformed into something else – one that could greatly surprise the enemy, thereby creating massive damage.
In these times when digitization is very commonplace, the concepts of cryptography are still widely applied in the name of giving a secure means of communication. The most revolutionary digital cryptographic system was the one built by Philip Zimmerman called Pretty Good Privacy (PGP) Encryption Program.
Though it had an initially bad reputation as viewed by the government during its early stages, Mr. Zimmerman’s creation eventually became the revolutionary symbol of the modern cryptography methods that we know today.
Now, with the prevalence of cryptocurrencies and blockchains, cryptography is more popular and useful than ever. Obviously, it is where the word “crypto” is derived from. With the occurrence of open-source blockchain codes that can be freely viewed and modified by anyone interested, new blockchains and new crypto-coins could easily be conceived. The next question would only be if there would be plenty of supporters who will patronize the coin.
Cryptography and Its Relevance to Blockchains
Now, let’s talk about how Cryptography is closely related to blockchain technology. Cryptography can be simply defined as the practice and usage of a set of methodologies for secure communication. By applying the techniques that comprise it, any practitioner can pass on a message or information that can only be read and understood by a recipient who possesses “a key” that only the sender and the receiver have knowledge of.
Blockchains highly depend on electronic databases where every transaction is logged and recorded. Like any digital record, they also depend on spreadsheet-like ledgers to store data efficiently. But ordinary ledgers are not enough, they have to go beyond what the conventional can offer and be fashioned into something else: smart ledgers.
So what differentiates a smart ledger from an ordinary ledger? To simply put it, it is the kind of ledger that doesn’t only store and calculate, it is equipped with AI that can make smart decisions on what to do with the high-speed strands of data that flows through it.
Ideally, smart ledgers must be equipped with the following:
Special high-processing layers
Because of the ever-growing number of cryptocurrency investors, as well as the demand for blockchain usage and applications, A special layer within the smart ledger of a blockchain that’s designed specifically for handling faster data requirements must exist. This is where transactions are done at higher rates. An alternative method for dealing with processes of higher speeds is Directed Acyclic Graph (DAG).
This method is much more complex and thorough in the sense that it compares an incoming transaction against 2 previous transactions that could be deemed as invalid. With more users participating within the blockchain, more processes need to be dealt with.
Distributed ledger technology is foreseen to be highly relevant to internetworking in the future. For that reason, second-layer mechanisms are religiously developed by system analysts, programmers, and computer engineers with the belief that they will play a very vital role in the advancement of blockchain technology and for the future of the internet in general.
The traits of being a “trustworthy machine”
Why blockchains were conceived in the first place is because it needs to build and establish trust among users and participants. As such, it has to be equipped with record-keeping capabilities that people can highly rely on. To cater to that, blockchain developers are now facilitating features like encoding legal property documents into an electronic database.
With such a scheme, all paper documents could be seamlessly passed on among concerned parties, including lawyers and judicial systems. By storing a photograph or still image of any document or file type, any written proof of any real-world property could be truly digitized and stored securely on a cloud server without the fear of it getting stolen, modified, or destroyed.
Since forgery will already be next to impossible, the issue of trust will reach its pinnacle to the point where people will have the best assurance and peace of mind knowing that their legal properties are in good and very secure hands.
Smart-economy facilitation
This is where human intellect meets machine thinking. With an economy managed by humans, yet enhanced by AI, handling financially-related tasks will be even more seamless, convenient, and transparent. With the assistance of well-crafted computer programs, information is more immutable and less corruptible.
In effect, investors no matter how big or small they are would have bigger faith in the system thereby growing the economy of a certain social group, or even that of an entire nation. With smart contracts and ledgers embedded in memory chips and standard storage devices, the need for intermediaries will be diminished if not totally eliminated. If their tasks can be done by AI systems already, why hire them at all?
With apps and AI systems fully developed, it will most likely be a machine-to-machine kind of transaction. No human would be ever needed anymore except in maintaining those systems and in building new ones to keep the flow of operations smooth, steady, and consistent.
