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The crypto in cryptocurrency refers to cryptography. So, what exactly is cryptography?

According to The Oxford English online dictionary, cryptography is “the art of writing or solving codes.” Wikipedia’s explanation is more complicated and more digital: “The practice and study of techniques for secure communication…cryptography is about constructing and analyzing protocols that prevent third parties or the public from reading private messages.”

The history of cryptography goes back at least 4,000 years. People have always needed to send secret messages now and then, and that’s what cryptography is all about.

Today’s cryptography, with the help of computers, is far more complicated than the ancient ciphers of the classical world, and it’s used more extensively. In fact, cryptography is an integral part of the Internet; without it, the Internet just wouldn’t work in the way we need it to work.

Almost every time you use your web browser, you’re employing cryptography. Remember the little lock icon, shown in Figure 2-2, in your browser’s Location bar?

FIGURE 2-2: Your browser’s lock icon means that data submitted back to the web server will be encrypted with cryptography.

The lock icon means the page is secured. When you send information from your browser to the web server (and receive information back), that information is encrypted — scrambled — so that if it’s intercepted on the hundreds or thousands of miles of Internet transmission between the two, it can’t be read. When your credit card number is transmitted to an ecommerce site, for example, it’s scrambled by your browser, sent to the web server, and then unscrambled by the receiving server.

Ah, so, the blockchain is encrypted, right? Well, no. Cryptocurrency uses cryptography, but not to scramble the data in the blockchain. The Bitcoin blockchain is plain text which is open, public, and auditable. Figure 2-3 shows you an example of a blockchain explorer designed for Bitcoin. Using a blockchain explorer, anyone can investigate the blockchain and see every transaction that has occurred since the genesis block (the first block of Bitcoin created).

FIGURE 2-3: An example of a blockchain explorer tool, found at https://live.blockcypher.com/btc/.