Digital money known as cryptocurrencies is used to safeguard and verify transactions on a decentralized network. The use of mathematical algorithms to build and operate the blockchain, the decentralized ledger that keeps track of all network transactions, is one of the distinctive characteristics of cryptocurrencies. We will look at how cryptocurrencies use mathematical methods in this article.
For the security and anonymity of transactions, cryptocurrencies rely on a public key cryptography approach. A public key and a private key are used in conjunction with the public key cryptography algorithm to encrypt and decode data. While the private key is kept secret and is used to decode data, the public key is visible to everyone on the network and is used to encrypt data.
A user creates a transaction with the amount of digital currencies they wish to transfer and the recipient’s public key when they want to send cryptocurrency to another user. After being broadcast to the network, the transaction is then confirmed and added to the blockchain. Miners perform challenging mathematical problems using a mathematical procedure called Proof of Work (PoW) or Proof of Stake (PoS) to validate the transaction.
In PoW, miners compete to use their processing capacity to make calculations in order to solve a mathematical riddle. New cryptocurrency is awarded to the first miner who cracks the code, and the transaction is recorded on the blockchain. The blockchain is kept decentralized and secure thanks to this procedure, which also guarantees the security of transactions.
In the Proof-of-Stake (PoS) model, validators are selected at random to verify transactions and add them to the blockchain. To take part in the process, validators must possess a particular amount of cryptocurrency. This makes sure that validators are motivated to act in the network’s best interest because they have a stake in it.
Hash functions are one of the other mathematical techniques that cryptocurrency uses to protect the blockchain. Data is transformed using hash functions into a fixed-length character string known as a hash. Since the hash is unique to the data, every modification to the data will produce a new hash. Because of this, it is more difficult for hackers to alter the blockchain.
Various mathematical methods are used by cryptocurrencies to guarantee the security, confidentiality, and decentralization of transactions. Hash functions, PoW, PoS, and public key cryptography are a few of the mathematical techniques that are utilized in cryptocurrencies. We may anticipate new and creative applications of mathematics to safeguard and manage these digital assets as the underlying technology behind cryptocurrencies develops.
Note: the Information is collected through the digital media
Swikriti Dandotia
