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Blockchain Complete Guide  

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Transaction

The transaction is a process of transference of some sort of Asset from one party to other. In the case of Blockchain, transactions are stored in Blocks to be part of the decentralised database.

Each Transaction has certain parameters.

  • Sender

  • Recipient

  • Quantity of Digital Asset

  • Gas Price

  • Gas limit

Asymmetric Key Cryptography

Also called Public-key cryptography is one of the significant components of Blockchain.
Unlike Single key cryptography which can encrypt and decrypt data using a single key, it uses key pairs, one to encrypt the data, other to decrypt the data.

Key pair has two parts a Public key and a private key.

A Public key can be seen as username and is viewed to everyone. Everyone can view the history of account with Public key, but there is no method to find out the private key (which is more like a password)

The Private key is needed to authorise any action on accounts.

So, Sender would sign a transaction with a receiver's Public key and send it across to the receiver as the private key of Receiver is only with the receiver themselves. So, Message can be safely delivered.

Address and Address Derivation

Bitcoin adopted a pay to Public key hash address format. Generally, Public key hash address has a  total of 34 alphanumeric symbols and all begin with “1”.

This address help user found.

Public key act as a username and private key like a password. The private key is longer and used to derive the public key. Every node on the network knows their private key (private key should not be shared with other nodes), but the public key is broadcasted to each other node on the network.

When a node sends crypto tokens to other party, they send it to the public key.

The private key is used to derive a public key which will be then transformed to address that other people can see. This is done using the Hashing function.

Address derivation, on the other hand, is the process of deriving address from the public key and some additional information.

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