{"id":39262,"date":"2023-03-21T02:39:50","date_gmt":"2023-03-21T01:39:50","guid":{"rendered":"https:\/\/www.coinpro.ch\/glossar\/encryption\/"},"modified":"2025-08-08T09:26:34","modified_gmt":"2025-08-08T07:26:34","slug":"encryption","status":"publish","type":"encyclopedia","link":"https:\/\/www.coinpro.ch\/en\/glossary\/encryption\/","title":{"rendered":"Encryption"},"content":{"rendered":"

Encryption describes the process of encrypting something. A blockchain<\/a> is a special data structure with inherent security features. A blockchain is based on the principles of consensus<\/a> <\/span>, decentralization<\/a> and encryption.<\/b>. All of this is intended to ensure trust in the transactions carried out on the blockchain. <\/span><\/p>\n

As the name \u201ccryptocurrency<\/a>\u201d suggests, cryptography<\/a> is directly related to blockchain technology. Cryptography aims to develop secure private communication in a world of potentially malicious third parties. So it is a way to encrypt messages so that only the sender and the recipient can understand the message. <\/span><\/p>\n

Encryption is therefore a method of securing data. The information is encrypted by processing it through a cryptographic algorithm that converts it into an incomprehensible form. Only people who have the correct key<\/a> can convert the encrypted data back into its original form. <\/span><\/p>\n

How Encryption Works<\/h2>\n

There are two components to cryptographic data exchange. Encryption and decryption. <\/span><\/p>\n

Encryption converts a plaintext message into a cryptic form. This form cannot be deciphered and understood by third parties. Decryption converts the sent message back into readable plaintext. The recipient decrypts the message once it has been securely delivered to them. <\/span><\/p>\n

A distinction is made between two main types of encryption. The first method is <\/span>symmetric encryption<\/b>. This method uses the same key to both encrypt and decrypt a message. The advantage of this form of encryption is the high execution speed. However, the disadvantage is that the entire communication can be decrypted if the key becomes known to malicious outsiders. <\/span><\/p>\n

The other form of encryption is <\/span>asymmetric encryption<\/b>. This uses a public and a private key. The public key is used by the sender to encrypt the message, while the private key is used by the recipient to decrypt it. This concept is used a lot in blockchains. The public key is closely linked to the wallet address. In most public blockchains, such as Ethereum<\/a>, the wallet address<\/a> is the hashed version of the user’s public key. So when a message is sent to the wallet, the recipient can then use their private key to decrypt it. <\/span><\/p>\n