How Bitcoin Cryptography Works

How Bitcoin Cryptography Works

If you’re not too familiar with specific encryption codes and established algorithms, Bitcoin cryptography can sound all too complex. Those with a bit more technical knowledge and experience can understand it well enough, but what about the rest of those who want to understand Bitcoin but don’t know much about cryptography?

Here you’ll find a simple version of what Bitcoin uses to encrypt their data and how it works to keep the currency secure.

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What is Cryptography?

This is a centuries-old practice that involves writing a text (plain text), changing it in some way (encryption), sending it to a specific recipient (transmission), deciphering the message (decryption), and finally reading the message (plain text).

In short, cryptography is when you create a certain way to change data so that no one who intercepts it can read it. For cryptography to be effective, the person receiving the message who have a key to unlock the text and receive the message.

Which Cryptographic Functions Are Used?

For those with some knowledge of coding, these are the specific cryptographic codes used to form different parts of Bitcoin. Additionally, there’s a short description included for anyone that doesn’t know what the specific codes do:

- secp256k1 elliptic curve

This is referring to a cryptographic code used to create the private and public key sets used Cryptographyto confirm transactions. Every individual Bitcoin has a set of 1 public and 1 private key. Private keys are used as signatures on any transaction and make it possible for verification of the transaction. A new key set is given out for each Bitcoin as it is transferred between wallets, preventing the same person from trying to use the same Bitcoin more than once.

- SHA-256

Hashes are created from the transactions using this code. It will further encrypt data to make it nearly impossible to reverse engineer.

- RIPEMD-160

This code is a hash that creates the unique wallet address to which Bitcoins can be sent.

How Does Bitcoin Cryptography Keep Transactions Secure?

The main way that Bitcoin remains a secure form of payment is that each set of keys used to confirm a transaction is unique to an individual Bitcoin. For every coin you own, you will get 1 public key that anyone can see and 1 private key that you need to keep secret from everyone.

When you have the combination of both of these keys, you have control over the Bitcoin to which these keys relate. When you send the coins around, you digitally sign them with your private key. Miners will then match the private and public keys. If they don’t match it, the transaction is nullified. If they do match the keys, the transaction is confirmed and placed in the block chain.

This method of creating a specific set of digital keys is secure because no one can alter the data without rendering the signature invalid. Once transaction data has been signed and sent, it will become invalid if altered.


Bitcoin uses a combination of a lot of proven and well-developed cryptographic codes. It is a simple and elegant system that proves difficult to really break at any point of the process. Although it’s not impossible to find a weak spot, such as an individual’s wallet location.

However, the overall system has been encrypted in a secure manner that should assure most people of the safety of buying and selling Bitcoins.

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