Building Blockchain in Go. Part 5: Addresses

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In the previous articlewe started implementing transactions. You were also introduced to the impersonal nature of transactions: But there still must be something that identifies you as the owner of transaction outputs i. And this is what Bitcoin addresses are needed for. This part introduces significant code changes, so it makes no sense explaining all of them here. Please refer to this page to see all the changes since the last article. This is the very first Bitcoin address, which allegedly belongs to Satoshi Nakamoto.

Bitcoin addresses are public. If you want to send coins to someone, you need to know their address. In fact, such addresses are a human readable bitcoin ecdsa private key definition of public keys. In Bitcoin, your identity is a pair or pairs of private and public keys stored on your computer or stored in some other place you have access to.

Bitcoin relies on a combination of cryptography algorithms to create these keys, and guarantee that no one else in the world can access your coins without getting physical access to your keys. Public-key cryptography algorithms use pairs of keys: Public keys are not sensitive and can be disclosed to anyone.

You are your private keys in the world of cryptocurrencies, of course. In essence, bitcoin ecdsa private key definition Bitcoin wallet is just a pair of such keys. When you install a wallet application or use a Bitcoin client to generate a new address, a pair of keys is generated for you. The one who controls the private key controls all the coins sent to this key in Bitcoin. Private and public keys are just random sequences of bytes, thus bitcoin ecdsa private key definition cannot be printed on the screen and read by a human.

Such phrases are used instead of private keys and can be used to generate them. This mechanism is implemented in BIP Ok, we now know what identifies users in Bitcoin. But how does Bitcoin check the ownership of transaction outputs and coins stored on them? By applying a signing algorithm to data i. Digital signing happens with the usage of a private key, and verification requires a public key. The operation of signing produces a signature, which is stored in transaction inputs.

In order bitcoin ecdsa private key definition verify a signature, the following is required:. In simple terms, the verification process can be described as: Digital signatures are not encryption, you cannot reconstruct the data from a signature. This is similar to hashing: The difference between signatures and hashes is key pairs: But key pairs can also be used to encrypt data: Every transaction input in Bitcoin is signed by the one who created the transaction.

Every transaction in Bitcoin must be verified before being put in a block. Verification means besides other procedures:. As described above, public and private keys are sequences of random bytes. Bitcoin uses elliptic curves to generate private keys. What we need to know is that these curves can be used to generate really big and random numbers.

Now we know that this is a human-readable representation of a public key. Bitcoin uses the Base58 algorithm to convert public keys into human readable format.

The algorithm is very similar to famous Base64, but it uses shorter alphabet: Bitcoin ecdsa private key definition, there are no these symbols: Since hashing functions are one way i. But we can check if a public key was used to get the hash by running it thought the save hash functions and comparing the hashes. Some of the concepts should be more clear when written in code.

A wallet is nothing but a key pair. In the construction function of Wallet a new key pair is generated. The newKeyPair function is straightforward: ECDSA is based on elliptic curves, so we need one.

Next, a private key is generated using the bitcoin ecdsa private key definition, and a public key is generated from the private key. One thing to notice: Thus, a public key is a combination of X, Y coordinates. In Bitcoin, these coordinates are concatenated and form a public key. But I can assure you that the balance is 0 no matter how many times you generate a new address and check its balance. This is why choosing proper public-key cryptography algorithm is so bitcoin ecdsa private key definition The address generation algorithm utilizes a combination of open algorithms that are implemented in many programming languages and libraries.

The UsesKey method checks that an input uses a specific key to unlock an output. Notice that inputs store raw public keys i. IsLockedWithKey checks if provided public key hash was used to lock the output. Lock simply locks an output. When we send coins to someone, we know only their address, bitcoin ecdsa private key definition the function takes an address as the only argument.

The address is then decoded and the public key hash is extracted from it and saved in the PubKeyHash field. Transactions must be signed because this is the only way in Bitcoin to guarantee that one cannot spend coins belonging to someone else. If a signature is invalid, the transaction is considered invalid too and, thus, cannot be added to the blockchain. We have all the pieces to implement transactions signing, except one thing: What parts of a transaction are actually signed?

Or a transaction is signed as a whole? Choosing data to sign is quite important. The thing is that data to be signed must contain information that identifies the data in a unique way. Considering that transactions unlock bitcoin ecdsa private key definition outputs, redistribute their values, and lock new outputs, the following data must be signed:.

Since Bitcoins allows different types of such scripts, it signs the whole content of ScriptPubKey. A detailed process of getting a trimmed transaction copy is described here. The method takes a private key and a map of previous transactions. As mentioned above, in order bitcoin ecdsa private key definition sign a transaction, we need to access the outputs referenced in the inputs of the transaction, thus we need the transactions that store these outputs. The copy will include all the inputs and bitcoin ecdsa private key definition, but TXInput.

PubKey are set to nil. In each input, Signature is set to nil just a double-check and PubKey is set to the PubKeyHash of the referenced output.

Thus, inputs are signed separatelyalthough this is not necessary for our application, but Bitcoin allows transactions to contain inputs referencing different addresses. The Hash method serializes the transaction and hashes it with the SHA algorithm. This piece is identical to the one in the Sign method, because during verification we need the same data what was signed.

Here we unpack values stored in TXInput. PubKeysince a signature is a pair of numbers and a public key is a pair of coordinates. PublicKey using the public key extracted from the input and execute ecdsa. Verify passing the signature extracted from the input. If all inputs are verified, return true; if at least one input fails verification, return false.

Now, we need a function to obtain previous transactions. These functions are simple: FindTransaction bitcoin ecdsa private key definition a transaction by ID this requires iterating over all bitcoin ecdsa private key definition blocks in the blockchain ; SignTransaction takes a transaction, finds transactions it references, and signs it; VerifyTransaction does the same, but verifies the transaction instead.

Now, we need to actually sign and verify transactions.

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Elliptic Curve Cryptography ECC is one of the most powerful but least understood types of cryptography in wide use today. Fundamentally, we believe it's important to be able to understand the technology behind any security system in order to trust it. To that end, we looked around to find a good, relatively easy-to-understand primer on ECC in order to share with our users.

Finding none, we decided to write one ourselves. That is what follows. In other words, settle in for a bit of an epic because there's a lot to cover. If you just want the gist, the TL;DR is: ECC is the next generation of public key cryptography and, based on currently understood mathematics, provides a significantly more secure foundation than first generation public key cryptography systems like RSA.

If you're worried about ensuring the highest level of security while maintaining performance, ECC makes sense to adopt. If you're interested in the details, read on. The history of cryptography can be split into two eras: The turning point between the two occurred in , when both the RSA algorithm and the Diffie-Hellman key exchange algorithm were introduced.

These new algorithms were revolutionary because they represented the first viable cryptographic schemes where security was based on the theory of numbers; it was the first to enable secure communication between two parties without a shared secret. Cryptography went from being about securely transporting secret codebooks around the world to being able to have provably secure communication between any two parties without worrying about someone listening in on the key exchange.

Whitfield Diffie and Martin Hellman. Modern cryptography is founded on the idea that the key that you use to encrypt your data can be made public while the key that is used to to decrypt your data can be kept private. As such, these systems are known as public key cryptographic systems. The first, and still most widely used of these systems, is known as RSA — named after the initials of the three men who first publicly described the algorithm: What you need for a public key cryptographic system to work is a set of algorithms that is easy to process in one direction, but difficult to undo.

In the case of RSA, the easy algorithm multiplies two prime numbers. If multiplication is the easy algorithm, its difficult pair algorithm is factoring the product of the multiplication into its two component primes. Algorithms that have this characteristic — easy in one direction, hard the other — are known as Tra door Functions. Finding a good Trapdoor Function is critical to making a secure public key cryptographic system.

The RSA algorithm is the most popular and best understood public key cryptography system. Its security relies on the fact that factoring is slow and multiplication is fast. What follows is a quick walk-through of what a small RSA system looks like and how it works.

In general, a public key encryption system has two components, a public key and a private key. Encryption works by taking a message and applying a mathematical operation to it to get a random-looking number. Decryption takes the random looking number and applies a different operation to get back to the original number.

Encryption with the public key can only be undone by decrypting with the private key. Computers don't do well with arbitrarily large numbers. We can make sure that the numbers we are dealing with do not get too large by choosing a maximum number and only dealing with numbers less than the maximum. We can treat the numbers like the numbers on an analog clock.

Any calculation that results in a number larger than the maximum gets wrapped around to a number in the valid range. In RSA, this maximum value call it max is obtained by multiplying two random prime numbers. The public and private keys are two specially chosen numbers that are greater than zero and less than the maximum value, call them pub and priv.

To encrypt a number you multiply it by itself pub times, making sure to wrap around when you hit the maximum. To decrypt a message, you multiply it by itself priv times and you get back to the original number. It sounds surprising, but it actually works. This property was a big breakthrough when it was discovered. To create a RSA key pair, first randomly pick the two prime numbers to obtain the maximum max. Then pick a number to be the public key pub. As long as you know the two prime numbers, you can compute a corresponding private key priv from this public key.

This is how factoring relates to breaking RSA — factoring the maximum number into its component primes allows you to compute someone's private key from the public key and decrypt their private messages.

Let's make this more concrete with an example. Take the prime numbers 13 and 7, their product gives us our maximum value of Let's take our public encryption key to be the number 5. Then using the fact that we know 7 and 13 are the factors of 91 and applying an algorithm called the Extended Euclidean Algorithm , we get that the private key is the number You can take a number and multiply it by itself 5 times to encrypt it, then take that number and multiply it by itself 29 times and you get the original number back.

In order to represent a message mathematically we have to turn the letters into numbers. A common representation of the Latin alphabet is UTF Each character corresponds to a number.

Each of these digits are smaller than our maximum of 91, so we can encrypt them individually. Let's start with the first letter. We do that by dividing by 91 and taking the remainder.

Voila, we're back to This works with the rest of the digits, resulting in the original message. The takeaway is that you can take a number, multiply it by itself a number of times to get a random-looking number, then multiply that number by itself a secret number of times to get back to the original number. RSA and Diffie-Hellman were so powerful because they came with rigorous security proofs. The authors proved that breaking the system is equivalent to solving a mathematical problem that is thought to be difficult to solve.

Factoring is a very well known problem and has been studied since antiquity see Sieve of Eratosthenes. Any breakthroughs would be big news and would net the discoverer a significant financial windfall.

That said, factoring is not the hardest problem on a bit for bit basis. Specialized algorithms like the Quadratic Sieve and the General Number Field Sieve were created to tackle the problem of prime factorization and have been moderately successful. These algorithms are faster and less computationally intensive than the naive approach of just guessing pairs of known primes.

These factoring algorithms get more efficient as the size of the numbers being factored get larger. The gap between the difficulty of factoring large numbers and multiplying large numbers is shrinking as the number i.

As the resources available to decrypt numbers increase, the size of the keys need to grow even faster. This is not a sustainable situation for mobile and low-powered devices that have limited computational power.

The gap between factoring and multiplying is not sustainable in the long term. All this means is that RSA is not the ideal system for the future of cryptography.

In an ideal Trapdoor Function, the easy way and the hard way get harder at the same rate with respect to the size of the numbers in question. We need a public key system based on a better Trapdoor. Building blocks of a better Trapdoor After the introduction of RSA and Diffie-Hellman, researchers explored other mathematics-based cryptographic solutions looking for other algorithms beyond factoring that would serve as good Trapdoor Functions.

In , cryptographic algorithms were proposed based on an esoteric branch of mathematics called elliptic curves. But what exactly is an elliptic curve and how does the underlying Trapdoor Function work? Unfortunately, unlike factoring — something we all had to do for the first time in middle school — most people aren't as familiar with the math around elliptic curves.

The math isn't as simple, nor is explaining it, but I'm going to give it a go over the next few sections. If your eyes start to glaze over, you can skip way down to the section: What does it all mean. An elliptic curve is the set of points that satisfy a specific mathematical equation. The equation for an elliptic curve looks something like this:. There are other representations of elliptic curves, but technically an elliptic curve is the set points satisfying an equation in two variables with degree two in one of the variables and three in the other.

An elliptic curve is not just a pretty picture, it also has some properties that make it a good setting for cryptography. One of these is horizontal symmetry. Any point on the curve can be reflected over the x axis and remain the same curve. A more interesting property is that any non-vertical line will intersect the curve in at most three places. Let's imagine this curve as the setting for a bizarre game of billiards.

Take any two points on the curve and draw a line through them, it will intersect the curve at exactly one more place. In this game of billiards, you take a ball at point A, shoot it towards point B. When it hits the curve, the ball bounces either straight up if it's below the x-axis or straight down if it's above the x-axis to the other side of the curve.

We can call this billiards move on two points "dot. It turns out that if you have two points, an initial point "dotted" with itself n times to arrive at a final point, finding out n when you only know the final point and the first point is hard.

To continue our bizzaro billiards metaphor, imagine one person plays our game alone in a room for a random period of time. It is easy for him to hit the ball over and over following the rules described above. If someone walks into the room later and sees where the ball has ended up, even if they know all the rules of the game and where the ball started, they cannot determine the number of times the ball was struck to get there without running through the whole game again until the ball gets to the same point.

Easy to do, hard to undo: This simplified curve above is great to look at and explain the general concept of elliptic curves, but it doesn't represent what the curves used for cryptography look like. For this, we have to restrict ourselves to numbers in a fixed range, like in RSA.