Blockchain 101 - Part 2 - Public / Private Keys and Signing
Summary
TLDRThis video script delves into the mechanics of blockchain, particularly its use in financial transactions. It highlights the issue of unauthorized transaction creation and introduces public-private key pairs as a solution. The script explains how private keys are used to create unique signatures for transactions, ensuring that only the rightful owner can authorize transfers. It demonstrates the process of signing and verifying transactions, emphasizing the security and decentralization of blockchain technology, which allows for the creation of new addresses without a centralized authority.
Takeaways
- đ Blockchain transactions require a method to ensure that only the owner of the funds can create a transaction, which is where cryptographic protection comes into play.
- đ Public and private key pairs are fundamental to blockchain security. The private key must be kept secret, while the public key can be shared openly and is derived from the private key.
- đĄïž Digital signatures using private keys ensure that transactions are authenticated and cannot be altered without detection. The signature verifies that the person who signed the transaction had access to the corresponding private key.
- đ» The process of signing a message or transaction involves creating a unique signature that can be verified by anyone using the sender's public key.
- đ€ The inability to derive the private key from the public key is crucial for maintaining security and preventing unauthorized transactions.
- đŒ In a blockchain, transactions are structured with a 'from' and 'to' public key, and a signature that proves the transaction was initiated by the owner of the 'from' private key.
- đĄ The integrity of a blockchain is maintained by the fact that any alteration of a transaction's content will invalidate the signature, thus preventing tampering.
- đ The mining process in blockchain involves adding new blocks to the chain, but miners cannot alter the content of transactions within a block without invalidating the signature.
- đ Creating a new address in a blockchain does not require a central authority. It can be done by generating a new private key and deriving the corresponding public key.
- đ The script highlights the decentralized nature of blockchain technology, where transactions are validated across a distributed network without the need for a central entity.
- đ° The script also touches upon the financial context of blockchains, mentioning that successful blockchains use a token and operate in a financial context, similar to Bitcoin and other cryptocurrencies.
Q & A
What is the primary concern with the basic blockchain transaction system as described in the script?
-The primary concern is the lack of security to prevent someone from fraudulently adding a transaction that spends someone else's money, as there seems to be no protection mechanism in place.
What cryptographic primitive is introduced in the script to address the security issue in blockchain transactions?
-The script introduces the concept of public-private key pairs to address the security issue in blockchain transactions.
What is the significance of a private key in the context of public-private key pairs?
-The private key is a long, unique, and random number that must be kept secret by its owner. It is used to create digital signatures for transactions, ensuring that only the owner can authorize transactions from their account.
How is a public key related to a private key?
-A public key is derived from the private key and is meant to be shared openly. It does not reveal the private key and is used by others to verify the authenticity of a transaction signed with the corresponding private key.
What is the purpose of signing a message with a private key?
-Signing a message with a private key creates a digital signature that can be verified by anyone using the corresponding public key. This verifies that the message came from the owner of the private key without revealing the key itself.
How does a message signature verify the authenticity of a transaction?
-A message signature, when verified with the corresponding public key, confirms that the transaction was signed by the owner of the private key, ensuring the transaction's authenticity and integrity.
What is the role of a transaction in the context of a blockchain?
-A transaction in a blockchain represents a transfer of value, such as money or assets, from one party to another. It includes details such as the amount, the sender's and recipient's public keys, and a digital signature to prove the sender's identity.
How does the blockchain ensure that transactions are only created by the rightful owner of the funds?
-The blockchain uses digital signatures created with the sender's private key. Since only the rightful owner has the private key, this ensures that transactions can only be created by the person who owns the funds.
What happens if someone tries to alter a transaction in a blockchain?
-If a transaction is altered, the digital signature will no longer match the transaction's content. This breaks the signature's integrity, and the blockchain will reject the altered transaction as invalid.
How does the creation of a new address in a blockchain work?
-To create a new address, one simply generates a new private key, which is a random number. From this private key, a new public key is derived and can be shared to receive transactions on the blockchain.
What is the significance of the financial context in successful production blockchains?
-Successful production blockchains, like Bitcoin and other cryptocurrencies, operate within a financial context because they use tokens to facilitate transactions and incentivize participants, such as miners, in the network.
Outlines
đ Introduction to Blockchain Security with Public-Private Key Pairs
This paragraph introduces the concept of securing transactions in a blockchain. It discusses the issue of preventing unauthorized transactions and introduces public-private key pairs as a cryptographic solution. The explanation covers the generation of a private key, which should be kept secret, and the corresponding public key, which can be shared openly. The paragraph also explains how these keys are used to create digital signatures for transactions, ensuring that only the owner of the private key can authorize transactions, thus adding a layer of security to the blockchain.
đ€ Signing Transactions with Public-Private Keys in Blockchain
This paragraph delves deeper into the process of using public-private key pairs to sign transactions within a blockchain. It explains how a message signature is created using the private key and can be verified by anyone using the public key. The paragraph demonstrates the creation of a transaction, which includes the amount being transferred and the public keys of the sender and receiver. It emphasizes the importance of the signature in verifying the authenticity of the transaction and preventing tampering. The explanation also touches on the ease of creating new addresses in the blockchain by simply generating a new private key, thus enabling the creation of new public keys without the need for a centralized authority.
Mindmap
Keywords
đĄBlockchain
đĄTransactions
đĄPublic/Private Key Pairs
đĄCryptographic Primitive
đĄSignatures
đĄMessage Signature
đĄVerify
đĄTransaction
đĄMiner
đĄImmutability
đĄDistributed
Highlights
Introduction to blockchain and the need for securing transactions.
Explanation of the issue with unauthorized transactions.
Introduction of public-private key pairs as a solution.
Description of a private key as a long, random number.
Explanation of the public key derived from the private key.
Emphasis on keeping the private key secret.
Public key can be shared without compromising security.
Demonstration of generating a private key and its corresponding public key.
Explanation of using the private key to sign messages.
Verification process using the public key and the signed message.
Example of signing a message and verifying its authenticity.
Explanation of creating a transaction using public and private keys.
Verification of a transaction signature to ensure its validity.
Discussion on the impact of altering transaction details on signature validity.
Miners can't create valid signatures without the original private key.
Public-private key pairs allow decentralized creation of new addresses.
Overview of how public-private key pairs secure blockchain transactions.
Blockchain's financial context and use of tokens.
Summary of blockchain functionality similar to Bitcoin and other cryptocurrencies.
Transcripts
Welcome back
Last time we looked at a blockchain, and how it works
particularly in the financial context
and we have these transactions that we were creating that move money from one person to another but there's a
big problem with this and that is what's to stop somebody from just adding a
Transaction that spends all of someone else's money to them
There's seems to be no
Protection here for that so what we're gonna do is we're gonna look at ways to add
transactions to a blockchain
that
Keep it. So not just anyone can create these transactions in order to do this. We need to look at
another cryptographic primitive and that is
Public private key pairs, and then we'll use that for signatures, so let's take a look at that right now
so here's a
public/private key pair
The private key here
It's just you know
It's a really really long number and any number is a private key right you could
Make this be one one is a private key
It's not a very good one lots of people have thought of the number one before
but you could you know you could pick some really really long number and it's sort of a random number and
We can use that as a private key. Now. You can see every time. I'm adding digits here its
Recomputing the public key that relates to that private key, and that's why the stuff down
Here starts changing so as the name would imply this
Private key is to be kept private only you have this private key, and you never tell it to anyone else
Okay, and just as the name implies
Public key the public key here, you just tell everyone this is something that you want everybody to know
This is something that there's no harm in letting everyone know
There is not a way to derive from this public key
What the private key is okay? So it's just a kind of a public
Version of this private key that does not reveal what the private key is
Okay, so I'm gonna hit my little ray number generator, so I get a nice really long private key
And it's not something you know where the numbers are close together where I typed
On the keyboard it's something a little bit more random looking and then the system has derived a public key
From this so this is going to be my private key, and I'm gonna use this to do signatures
So let's do that right now, so
Here's a message signature
So here is a message. I'm gonna type. You know hello on ders. That's me
and I have
My private key here six five six whatever it is is my private key only
I have that and here's the message that only I have
And I can hit sign and come up with a message signature here now this message
Signature I can pass to someone else
I'm gonna hit my little verify button I'm gonna pass this message signature to someone else to anybody else okay
now of course they don't have my private key because I keep that private nobody else can see that but I
Publicize my public key, and they know that everybody knows that this is my public key
So given this message and everybody knows my public key and given the signature that I just made
You should be able to verify this now of course if I hit verify sure enough the screen goes green
This is a valid message
And I have verified that whoever signed this message and came up with a signal
Signature had access to the private key behind this public key
Okay, and if I have kept that private key secret that must be me okay
So that's a message signature
And how you can sign something and verify it now instead of just using this freeform text box
Let's put some structure around this. I'm gonna make a transaction here instead all right. This is similar to what we saw before
the message I'm gonna say is I'm gonna send twenty dollars from this happens to be my
public key to
Somebody else's public key whoever whoever this is that I'm sending money to okay? I
Of course because I'm Simon smashes. I have my private key
I never tell anybody the private key, but I can use this private key to sign this message
Which consists of these three things up here?
And if I hit sign I get a message signature great all right now
I send this whole thing out I send out my message and my signature to to
somebody else and
They know that I'm trying to send twenty dollars from my public key to this somebody else's public key
You'll notice this little blue box around the from public key that
suggests that
You can check this signature against this public key to see whether or not the private key behind, this public key
actually sign this message
so let's hit verify sure enough it verifies so I know that the person in possession with the
Private key behind this public key must only beyonders is sending twenty dollars
To some other public key, okay, now, let's use this in the blockchain
Let's go back to the blockchain case where we were that we're looking at before now
You'll notice a couple of different things here all right first of all
There's not names here anymore right there
There are just public keys in the from and the two and you'll also notice that that I added a signature
section here, okay, so
In this case this is this
Public key sending two dollars to this public key
And here's a message signature that says that it is well
What happens if I change this to you know 25 dollars okay?
Of course it broke the block
But it also broke the signature the signature is not verified and that's why the signature is turning red so Wow?
we couldn't press the little mine button you know a miner could take this altered block and
Remind this block
They're gonna end up with something where the block is signed
which should eventually happen and
there we go and
the signature though is still
invalid because the the minor has no they don't have my
Private key, they only have my public key, so they can't come up with the right signature. Okay, so that's the way
We can make sure that
The message this transaction here was posed
By the person that had the money and only that person not just anyone else on on the Internet
So that's how public private key pair
Message signing is used to protect
transactions and make sure that they are
from the people that they
proposed that they're from
Now if you think about it it actually works really well because in order to create a new
address a new public key the only thing you have to do is go back and
Come up with a new private key a new random number. You didn't have to go to a centralized Authority to
come up with a
Public/private key pair, you know you just make up a private key
And you use it you derive the public key from it and you put that out there
And and that's how people can pay you so
That's a blockchain and again. It's it's a financial context all successful production block chains that are
Distributed use a token of some sort so they did they're all they'll have a financial
context so that's
You know how a blockchain?
Will will work I mean I have glossed over a couple of
the details
But for the most part the the overall idea here that you're looking at is is very similar to the way that
Bitcoin works
And many other cryptocurrencies as well, so that's a blockchain. I hope it's helpful to you
please leave me some notes down below and let me know what you think of this and
I hope to see you next time in the next video
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