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PUBLIC KEY ENCRYPTION

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Cryptography is the crypto in cryptocurrency; it uses what’s known as public key encryption. It’s how you prove that you own the money associated with an address. The person spending the cryptocurrency uses a private key to encrypt the message and then bundles the associated public key with the message. The miner can determine that the address from which the cryptocurrency is coming is associated with the public key, and thus if the public key can decrypt the message, the message must have been created by the person controlling the associated private key. (All three — private key, public key, and address — are mathematically and uniquely associated.) See Chapter 2 for more details.

This transaction information is put into a script, a text message that will be sent out over the crypto network. Your wallet software uses your private key to sign the transaction — that is, it encrypts the transaction information using the private key. It then adds the associated public key to the message and sends the transaction out onto the Bitcoin network. Within seconds, a node will receive the transaction; just as, when you send an email, within seconds your email will be received by a mail server. (You can think of your wallet program as a special form of messaging software, in fact.)

Cryptocurrency Mining For Dummies

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