What is Cryptography? – Definition & Meaning

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By PrimeXBT

Reviewed by Dirk Hartig

July 21, 2022
Reading Time: 6 min
What is Cryptography? – Definition & Meaning - What is cryptography

Cryptography is often used in computer science and refers to securing information and communication via mathematical concepts and a set of rule-based calculations known as “algorithms.” Cryptography is the reason that cryptocurrencies can exist.

Cryptography allows secure communication in the presence of potentially malicious third parties. The encryption uses an algorithm and a key to transform the initial input, into an encrypted output. For example, the information, more often than not, will be plain text but then ends up in cipher text.

If the same key is used, the algorithm will transform the text back and forth, making it reusable. The sender and receiver must have duplicate keys to open the secured data when transferring information. As long as attackers cannot open up the information, cryptography makes processing information and transmitting value secure.

The History of Cryptography

The history of cryptography goes back to ancient times, with the original cryptography known as the Caesar Cipher. The earliest forms of encryption were used heavily by the Romans, as quite often, there would be a “key” that would tell you how to decipher what looked like somewhat nonsensical text.

Today’s algorithms are much more advanced because the data is more advanced and are used almost exclusively via computer. With computer advances, most of today’s algorithms could take years or even decades to unravel. This is unlike the original algorithms and ciphers that are now widely known and easy to crack.

With the advent of quantum computing, cryptography will more likely than not be forced to take another leap forward, and there are computer scientists currently working on that exact problem.

Cryptography vs. Cryptology vs. Encryption

There are a handful of terms that you hear tossed about when speaking of keeping information safe. The syllable “crypt” comes from a Greek word that means “hidden” or “secret.” As an example, cryptography has a literal translation of “secret writing.”

The term cryptography means the practice of writing secret messages, while cryptology is the theory of the practice. Encryption is the process of turning plain text into cipher text. You should think of it as the following: cryptology is the study of cryptography, which is only possible through encryption. SImply put, if it wasn’t for cryptography, online safety and cryptocurrencies would be impossible.

What Are the Principles of Cryptography?

One of the essential principles of cryptography includes the Kerckhoff Principal, named after the 19th-century Dutch cryptographer Auguste Kerckhoff. He stated, “a cryptographic system should be secure even if everything about the system, except the key, is public knowledge.”

The idea is that the algorithm doesn’t need to be secret to conceal information successfully. Claude Shannon, a World War II cryptographer who became a pioneer and information theory, was a leading proponent of this aspect.

In modern times, the public nature of cryptographic algorithms is considered a good thing, as they have been widely studied and stress tested. Coming up with your private algorithm is more likely than not going to fail, as security through obscurity typically serves no real purpose.

The biggest concern is keeping your cryptographic key secret. If that key is secret, your information should be safe and concealed from prying eyes.

What is Cryptography Used For?

Put succinctly; cryptography is used for any situation where privacy is desired. Military secrets are probably one of the most complex issues in the world that involve cryptography, but certainly not the only use.

Financial transactions are also a large area where cryptography comes into play, as protecting financial information and value is crucial. Cryptography touches your bank account, online payments, and ATM cards daily. Without it, cybercriminals could empty your bank account at any time.

Databases with sensitive information almost always have cryptography, such as medical records, Social Security and national ID numbers, and customer lists.

How Cryptography is Used in Cryptocurrency Ecosystems

Cryptography is used extensively in financial transactions, and it should be no surprise that cryptocurrency uses it as well. A cryptocurrency network will use encryption methods to execute, verify, and protect financial transactions. Simply put, it allows information and data to be sent across the network with protection, as only the owner of the proper keys can unlock the information or value.

What Are the Types of Cryptography?

When it comes to cryptography, three main types are used. The most common are symmetric encryption, asymmetric encryption, and hash functions.

What is Symmetric Encryption?

Symmetric encryption is encryption that relies on a single key. This means that both the sender and the receiver of data share the same key, which is used to both encrypt and decrypt the information being sent.

The secret key needs to be agreed upon ahead of time. While it is still a strong encryption source, the fact that there is only a single key protecting information means risk in sending it over the network. This can be thought of as sharing your dorky with a friend by hiding it under the mat. A stranger could find it.

What is Asymmetric Encryption?

Asymmetric encryption, sometimes known as “public-key encryption,” uses a pair of keys. This instantly increases data protection, as each key serves a specific function. For example, the participants of a transaction will use one key to encrypt data, while the other will be used to decrypt it.

A public key can be exchanged with anybody over the network, offering information on how to encrypt data, and anyone can use it. However, the private key is what decrypts the information and is not shared with the public. These keys are generated by an algorithm that uses large prime numbers to create two unique mathematically linked keys. In other words, anybody with a public key can encrypt a message, but only the private key holder can decipher it.

What are Hash Functions?

What is Cryptography? – Definition & Meaning - cryptography

Hash functions are another way to secure information cryptographically. Instead of keys, it relies on algorithms to turn data input into a fixed-length string of random characters. Hash functions are different from other forms of encryption. You cannot turn a hash back into its original data.

Hashes are crucial for blockchain management because they can encrypt large amounts of information without compromising the original data. This gives a blockchain an organized way to structure data without damaging it and increases efficiency.

Furthermore, hash functions leave digital fingerprints, which can identify and secure information against unauthorized modifications.

What is the Master Key in Cryptography?

The master key in cryptography encrypts all other keys on the system. Other keys encrypted under these master keys are stored outside the protected area of the cryptographic feature.

What is the Secret Key in Cryptography?

The secret key in cryptography is a piece of information or framework used to decrypt and encrypt messages. This is a key that both the sender and receiver of data or, in the case of many crypto networks, smart contracts, have to open up the message so it can be sent back and forth safely.

What Are the Advantages of Cryptography?

The most apparent advantages of cryptography come down to safety and security. After all, not all information is meant to be shared with the world. Some of the most fundamental advantages include:

  • Confidentiality: Confidentiality is a huge advantage when using cryptography. If a message or data is not meant to be seen by the rest of the world, you must keep that information hidden.
  • Integrity: Good cryptography not only keeps messages secret but it protects the integrity of the data being sent. Modern cryptographic processes can protect information as well as keep it whole.
  • Authentication: Cryptography provides a secure method to authenticate users in the system. This is true, be it a password, intended users, or authenticating the sender of a transaction or information.

What Are the Disadvantages of Cryptography?

While it is almost impossible to imagine a world without cryptography, the reality is that there are a few headaches along the way when using it. This includes:

  • Difficulty accessing: Sometimes, cryptographic messages can be difficult to access, even for the intended user. Ease-of-use is something that sometimes alludes to developers.
  • Threats due to poor design: Although cryptography has increased exponentially over the years, the reality is that there are sometimes poor designs that get leaked into the world. Because of this, you must pay close attention to the network and the security you are using.
  • High-availability: Unfortunately, even if cryptography is applied to a network, the major problem is that in a highly available network, other attacks can occur, such as “denial of service attacks” that can make recovering information very difficult.


Cryptography is everywhere. In the modern digital world, it’s impossible to imagine a scenario where we would not use it. You deal with cryptography daily, be it medical records, tax information, bank accounts, ATM cards, and a host of online activities.

Cryptography is not an all-encompassing benefit, though, because some cryptography is better than others. Data breaches from time to time, such as the retail chain Target in the United States, which lost sensitive information to millions of its customers. There have even been acts of central banks, such as in Bangladesh. That being said, anytime you transmit data, you must use protection. That protection is what is known as cryptography.

Cryptocurrencies would not exist without cryptography because, quite frankly, they would not serve a purpose. The idea of protecting financial transactions and data on a secure network makes cryptocurrency so interesting. Because of this, it’s essential to understand whether or not the network you are dealing with has had problems with hacks. Regardless of what you do digitally, cryptography is a massive part of it.

FAQ: Frequently Asked Questions

What is cryptography in simple words?

Cryptography is securing information and communication techniques. These are derived from mathematical expressions and rule-based calculations known as algorithms.

What are three types of cryptography?

Secret Key, Public Key, and Hash Functions are the three types of cryptography. They are all important for safety, serving different use case scenarios.

What is cryptography used for?

Cryptography is used to protect communication and information against malicious third parties. Cryptography uses encryption techniques to make the transfer of information and communication much safer than in its “raw form.”

Who uses cryptography?

Cryptography is used in many situations such as banking transactions, debit cards, computer passwords, and commerce e-transactions. Cryptocurrencies are also a central area of cryptography, as the entire space continues to expand on it.

How is cryptography used in everyday life?

Cryptography is used in ATM cards, online transactions, and cryptocurrency ecosystems, and almost anything is done online that involves the transfer of sensitive information.

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