Cryptocurrency is a form of electronic money that can be exchanged for traditional currencies. The exchanges are usually made between buyers and sellers on the Internet or other financial institutions. It is possible to buy or sell crypto-pairs with your online account.
A crypto currency is an alternate form of currency used in private or virtual markets. They are commonly referred to as digital currencies, virtual currencies, or digital assets. Cryptocurrencies are generally anonymous because there is no central issuing authority. Unlike normal currencies, these can be transferred instantly around the world from person to person without having to reveal the sender’s identity.
A Cryptosignature is a procedure that makes it impossible for any third party to intercept a transaction on the web. This process involves a group of keys which are commonly referred to as private keys. When a user wants to transfer money from one person to another, they make use of the transfer of funds service provider to transfer the money to the other person’s personal account. On receiving the money, the person transferring the money will receive their private key and the corresponding public key will be held by the service provider.
These keys have to be generated at a certain time prior to the transfer of funds. The recipient’s public key is used by the service provider to sign the receipt of the funds. The recipient’s private key is used by the service provider to authenticate the signature. The private key is held in a database called the blockchain, which is also called the digital ledger.
If the recipient’s private keys are lost or compromised, then the funds cannot be transferred. But if they are recovered, the service provider will still use the private key to validate the signature.
Transactions done using a Cryptosignature require users to generate new keys for every transaction they execute. These keys are stored in a database where they are encrypted and verified before being sent to the appropriate parties.
Each key pair, also known as a signature, has a specific encryption level. This means that when a transaction is generated, the transaction is encrypted with the key of the recipient’s key pair.
To make sure that the receiver’s public key is not leaked to the transaction and therefore prevented fraud, the transfer is verified and signed using the private key. Therefore, only the recipient’s private key is kept and used to validate the signature.
Before a transaction is executed, the service provider will encrypt the key pairs so that only the key pair that has been sent is used to sign the transaction. The decryption process is controlled by the service provider.
Transactions are not made between two people directly using a Cryptosignature but instead between two parties using two key pairs. There is a process called dual signing which is used for this purpose. In Dual Signatures, the key pairs that the parties want to exchange are encrypted and both parties provide them to the service provider for decoding.
Once the deciphering of the keys is done, the two parties provide them to the service provider together, in which the public key is passed to the service provider. The key pair that the service provider decrypts to the public key is now identified to the two parties.
Then, the service provider starts the process of decrypting the key pair, as the decryption process starts, the public key of the service provider is decrypted with the private key of the parties. The two parties now have the same private key, and there is no longer any need for the decryption step. The party with the public key is identified and the signing process continues.