From ancient ciphers to blockchain: How cryptography protects your digital assets

Have you ever wondered why internet transactions are so secure? Why are the cryptographic assets in your wallet protected? Behind all of this is the power of cryptography. This ancient yet modern science is quietly safeguarding our digital world.

The Essence of Cryptography: More Than Just Encryption

Many people confuse cryptography with encryption, but this is a misconception. Encryption is just one tool in the cryptography toolbox.

Cryptography is a science aimed at protecting four key attributes of information:

Confidentiality — Ensuring that only authorized individuals can read your information. For example, your private key must be kept secret, or your assets could be at risk.

Integrity — Guaranteeing that information has not been tampered with during transmission. Blockchain leverages this principle to ensure transaction records are unforgeable.

Authentication — Verifying that the other party is indeed who they claim to be. Digital signatures are an application of this principle.

Non-repudiation — Preventing the sender from denying having sent a message afterward. This is crucial for financial transactions.

The Evolution of Cryptography: From Sparta to Bitcoin

The history of cryptography spans thousands of years. As early as 500 BC, the ancient Spartans used a tool called the “Spartan rod” to encrypt messages. The encryption method was simple—wrapping a message on a strip of paper around a rod of a certain diameter, readable only by someone who knew the correct diameter.

In the era of Caesar, the Caesar cipher appeared—shifting each letter by a fixed number of positions. It sounds clever but is actually easy to crack.

In the Middle Ages, the Vigenère cipher addressed this problem by using a keyword to change the shift for each letter. For centuries, people believed this cipher was unbreakable (even called it the “unbreakable cipher” in French). It wasn’t until the 19th century that British mathematician Charles Babbage and German Friedrich Kasiski cracked it.

World War II changed everything. The Germans’ Enigma machine represented the pinnacle of mechanical cryptography. This machine, equipped with rotors and plugboards, could generate incredibly complex encryptions. Yet, even so, British mathematician Alan Turing and his team successfully broke it, directly impacting the course of the war.

The real revolution happened with the advent of computers. In the 1970s, the US government adopted DES (Data Encryption Standard) as the official encryption standard. Later, in 1976, Whitfield Diffie and Martin Hellman proposed a revolutionary idea: public-key cryptography. Soon after, the RSA algorithm was born, which remains a cornerstone of internet security today.

The emergence of Bitcoin gave cryptography a new stage. Blockchain technology integrates multiple branches of cryptography to create a transparent yet secure system.

Two Distinct Cryptographic Methods

Symmetric Cryptography: The Speed King

Imagine you have a key that can both lock and unlock. That’s the principle of symmetric cryptography.

The sender and receiver use the same key to encrypt and decrypt information. This method is very fast and especially suitable for encrypting large amounts of data.

Common symmetric encryption algorithms include:

• AES (Advanced Encryption Standard) — the most widely used standard today
• 3DES — outdated but still in use
• Blowfish — compact and efficient

But symmetric cryptography has a fatal weakness: you need to securely transmit the key to the other party. If the key is intercepted during transmission, the entire protection collapses.

Asymmetric Cryptography: Solving the Key Distribution Problem

Asymmetric cryptography uses a pair of related keys: a public key and a private key.

You can think of the public key like a mailbox—placed publicly, anyone can use it to encrypt messages sent to you. Only you, with your private key, can decrypt those messages.

It sounds slow—indeed, asymmetric encryption is only about one-thousandth the speed of symmetric encryption. But it solves the fundamental problem of key distribution.

Common asymmetric algorithms:

• RSA — still widely used, especially in digital signatures
• Elliptic Curve Cryptography (ECC) — more efficient, requiring shorter keys, used in Bitcoin and Ethereum
• Diffie-Hellman — used for secure key exchange

Hybrid Approach: The Best of Both Worlds

Modern security systems typically adopt a hybrid approach: first, use asymmetric encryption to exchange a symmetric key, then use symmetric encryption for fast processing of large data. HTTPS works this way.

Hash Functions: The “Fingerprint” of Data

Hash functions are another key tool in cryptography. They convert input data of any length into a fixed-length output—the “fingerprint” of the data.

Hash functions have several magical properties:

One-wayness — It’s impossible to reverse-engineer the original data from the hash value.

Determinism — The same input always produces the same output.

Avalanche Effect — Changing just one character drastically changes the hash.

Collision Resistance — Finding two different inputs that produce the same hash is nearly impossible.

Common hash algorithms:

• MD5 — outdated and insecure
• SHA-1 — also outdated
• SHA-256 — used in Bitcoin
• SHA-3 — the latest standard

Hash functions are ubiquitous in blockchain. Each block contains the hash of the previous block, forming an unbreakable chain. Any attempt to tamper with an old block changes its hash, causing all subsequent blocks to become invalid—attackers are immediately detected.

The Threat and Future of Quantum Computing

A storm is brewing: quantum computers.

A sufficiently powerful quantum computer could crack RSA encryption in minutes—something that would take millions of years on classical computers. This is not just hype—it’s a real threat.

To address this challenge, two directions are developing:

Post-Quantum Cryptography (PQC) — designing new algorithms resistant to both quantum and classical computers. The US National Institute of Standards and Technology (NIST) is conducting an international competition to select new standards.

Quantum Key Distribution (QKD) — using principles of quantum mechanics to securely transmit keys. Any interception attempt alters the quantum state, alerting sender and receiver immediately.

Though these technologies are still in development, they will ensure cryptography continues to protect our data in the quantum era.

Cryptography Protects Everything About You

Your Banking and Payments

When you see the green lock icon and “https” in your browser address bar, TLS/SSL protocols are at work. They use public-key cryptography to verify server identity and establish an encrypted channel, protecting your passwords, bank card numbers, and personal information.

The chip in your bank card (EMV) contains cryptographic algorithms to authenticate transactions. Online payment systems use complex cryptographic protocols to authorize each transaction. Communication between ATMs and backend systems is also fully encrypted.

Your Communications

Signal and WhatsApp use End-to-End Encryption (E2EE). This means messages are encrypted on your device and can only be decrypted on the recipient’s device. Even the application servers’ operators cannot see your message content.

Digital Signatures: Proving Your Identity

Digital signatures are an elegant application of cryptography. When you sign a document, you are essentially:

1. Calculating the hash of the document
2. Encrypting this hash with your private key
3. The recipient decrypts the hash with your public key
4. If the decrypted hash matches the document’s hash, it proves the document is from you and unaltered

This is widely used in legal documents, e-governance, and transactions.

Cryptocurrencies and Blockchain

Bitcoin, Ethereum, and other blockchains are the ultimate applications of cryptography. They simultaneously use:

• Hash functions — linking blocks and protecting transaction history
• Public-key cryptography — creating wallet addresses and digital signatures
• Timestamping and consensus mechanisms — preventing double-spending attacks

This creates a trust system without central authority. Your private key is proof of your assets—no one can move your funds without it.

Cryptography as a Career

If you’re interested in this field, cryptography offers exciting career opportunities.

Cryptography Researchers develop new algorithms and protocols. They need a strong mathematical foundation (number theory, algebra, probability).

Cryptanalysts specialize in cracking cryptosystems—either working defensively to find vulnerabilities or offensively in intelligence agencies.

Information Security Engineers apply cryptography tools in real-world scenarios. They configure VPNs, implement Public Key Infrastructure (PKI), manage encryption systems, and monitor security.

Security Software Developers are programmers knowledgeable in cryptography. They know how to properly use cryptographic libraries and APIs to build secure applications.

Penetration Testers look for cryptography vulnerabilities, including misuses.

To enter this field, you need:

• Solid mathematical background
• Programming skills (Python, C++, or Java)
• Understanding of networks and operating systems
• Continuous learning motivation

Many top universities (MIT, Stanford, ETH Zurich) have cryptography and cybersecurity programs. Online platforms like Coursera and edX also offer relevant courses.

Job prospects are bright. Starting as a junior engineer, you can advance to senior expert, security department head, security architect, or independent consultant. Financial tech companies, crypto exchanges, telecoms, government agencies, and large traditional firms are all seeking cryptography professionals.

Conclusion: The Future Shaped by Cryptography

Cryptography is no longer just stuff from spy movies. It has become the infrastructure of digital life. From your personal communications to national security, from your bank accounts to your crypto assets, cryptography works silently.

Understanding the basics of cryptography has become an essential skill in the digital age—not only for security professionals but for everyone who wants to protect their online privacy and assets.

As new threats emerge—especially quantum computing—cryptography continues to evolve. Post-quantum cryptography and quantum key distribution will ensure we can still communicate and transact securely in the future.

This is a field full of opportunities and challenges. Whether you want to protect your digital assets or build a career in this vibrant industry, cryptography is worth your deep exploration. After all, in this increasingly digital world, cryptography is the key to a secure future.