No reason to be afraid of modern cryptography for consensus

Nearly all cryptocurrency projects use asymmetric cryptography for signing transactions. All transactions are put into a block and the protocol must come to a consensus that decides whether the block will be eventually added to blockchain or not. The first consensus was Bitcoin PoW and currently PoS is on the rise. Both PoW and PoS consensus use cryptographic tools. However, many people believe that only the cryptographic tool used in PoW is a valid solution and any different approach cannot work within PoS. We would like to show you that there is no strong reason to believe that.

We do not want to explain to you how exactly cryptographic tools work or how they are used to solve a particular problem in a given project. We would like to highlight the basic principles of cryptography. You should understand why cryptography is secure and under which conditions. After that, we will show you how modern cryptography tools Verifiable Random Function and Key Evolving Signature can be used in Ouroboros PoS consensus.

Nevertheless, we have recently explained the basics of asymmetric cryptography and hashing for wallet users. It can help you to understand the basics:

Cryptography for Cardano Wallet Users

Asymmetric cryptography

Asymmetric cryptography or public cryptography is an essential component of cryptocurrencies like Bitcoin and others. These cryptographic techniques ensure that the source of transactions is legitimate and that hackers can not steal users' funds. People sending transactions might not realize that since everything is done by a wallet. Under the hood, there is a pair of keys. A private key that must be kept secret and a public key that can be broadcasted out to the network.

Bitcoin uses Elliptic Curve Digital Signature Algorithm (ECDSA) to create a set of the private key and corresponding public key. The public key is then used with a hash function to create the public address that Bitcoin users use to send and receive funds. The private key is kept secret and is used to sign a digital…