Cryptography and Network Security

Cycle II – Report

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SYED HAMEED.M

15Z355
Diffie-Hellman Key Exchange:

STEP 1: Set the public parameters for both the parties

STEP 2: Choose the secrets for the respective ends

 STEP 3: Create the shared keys

STEP 4: Exchange the respective values of the shared keys

 STEP 5: Generate the common session key

RSA Algorithm:
Digital Signature:
 The final values of the signatures, stored in a .txt file

MD5:
SHA:

HMAC:
Elliptic Curve Cryptography:
Fermat Test:
CRYPTOCURRENCY:
A cryptocurrency can be classified as a subset of digital currencies and are also
classified as a subset of alternative currencies and virtual currencies. They can be
considered as a digital asset designed to work as a medium of exchange using
cryptography to secure the transactions and to control the creation of additional units
of the currency. The cryptocurrencies use decentralized control as opposed to
centralized electronic money/centralized banking systems. The control is related to the
use of blockchain transaction database in the role of a distributed ledger.

Advantages:
 Cryptocurrency isn’t inflationary. With coins like bitcoin there is a set
amount that will ever be created.
 Cryptocurrency makes trading anywhere in the world easy. It’s a
decentralized currency. This opens up financial options for people in
countries that don’t have access to financial services.
 Since the cryptocurrency market is volatile it can be a high reward
investment.
 Through the process of mining (securing cryptocurrency transactions)
anyone with access to a computer and the internet can make money
mining coins.
 Cryptocurrency is legal and, if it is claimed correctly for tax purposes,
opens up another avenue for transactions.
 Most cryptocurrencies are built from the bottom up with security and
privacy in mind. This means users can expect transactions to be private
and secure.
 Cryptocurrency has low transaction costs compared to other digital
payment methods

Disadvantages:
 Third parties involved in cryptocurrency, like those who produce
wallets and exchanges, don’t always have the same security.
 Any given cryptocurrency lacks the flexibility of centralized currency
due to it is inability to flexidate.
 Cryptocurrency is not anonymous. The public ledger system might
provide others insight into previously unknown activity.
  If something goes wrong with a transaction or if a coin is lost there is
no way to recover it. If someone does steal coins there is no way to
rectify the issue.
 The cryptocurrency market is volatile, the value of coins can change
wildly in a short amount of time
 Cryptocurrency is only accepted by certain vendors. Between that and
fluctuating prices the money saved in transaction costs could be
negligible.

Some Cryptocurrencies used:

1) Litecoin (LTC)
Litecoin, launched in 2011, was among the initial cryptocurrencies following
bitcoin and has often been referred to as “silver to bitcoin’s gold.” It was created by
Charlie Lee, an MIT graduate and former Google engineer. Litecoin is based on an
open source global payment network that is not controlled by any central authority
and uses "scrypt" as a proof of work, which can be decoded with the help of CPUs of
consumer grade.

PROS:

Although Litecoin is like bitcoin in many ways, it has a faster block generation
rate and hence offers a faster transaction confirmation. Other than developers, there
are a growing number of merchants who accept Litecoin. As of October 5, 2018,
Litecoin had a market cap of $3.40 billion and a per token value of $58.09.

CONS:

The main disadvantage of Litecoin is its absolute anonymity, which creates

a bad image for the coin, as it is often used for illegal things in DarkNet.

2)Zcash (ZEC)
Zcash, a decentralized and open-source cryptocurrency launched in the latter
part of 2016, looks promising. “If bitcoin is like http for money, zcash is https," is one
analogy zcash uses to define itself. Zcash offers privacy and selective transparency of
transactions. Thus, like https, zcash claims to provide extra security or privacy where
all transactions are recorded and published on a blockchain, but details such as the
sender, recipient, and amount remain private. Zcash offers its users the choice of
“shielded” transactions, which allow for content to be encrypted using advanced
cryptographic technique or zero-knowledge proof construction called a zk-SNARK
developed by its team. As of October 5, 2018, Zcash had a market cap of $633.64
million and a value per token of $128.08.

PROS:

 Selective transparency
 GPU mining to prevent centralization
 Potentially more effective governance
 Offers exclusive privacy
 Improved block-time of 2.5 minutes

CONS:

 Centralization
 Fungibility
 Anonymity of transactions encourages its illicit use

3) Ethereum (ETH)
Launched in 2015, Ethereum is a decentralized software platform that enables
Smart Contracts and Distributed Applications (DApps) to be built and run without any
downtime, fraud, control or interference from a third party. The applications on
ethereum are run on its platform-specific cryptographic token, ether. Ether is like a
vehicle for moving around on the ethereum platform, and is sought by mostly
developers looking to develop and run applications inside ethereum, or now by
investors looking to make purchases of other digital currencies using ether. During
2014, ethereum launched a pre-sale for ether which received an overwhelming
response; this helped to usher in the age of the initial coin offering (ICO). According
to ethereum, it can be used to “codify, decentralize, secure and trade just about
anything.” Following the attack on the DAO in 2016, Ethereum was split into Ethereum
(ETH) and Ethereum Classic (ETC). As of October 5, 2018, Ethereum (ETH) had a market
cap of $22.97 billion and a per token value of $224.42.

PROS:

 Ethereum uses the turing language on the blockchain. This allows the
exchange of simple or complicated contracts on the network which
allows the elimination of third parties .
  Ethereum has the backing from corporate clients, and in recent days the
price of its cryptocurrency ETH has rocketed. The Ethereum Enterprise
Alliance (EEA) are working with dozens of enterprise grade companies in
all verticals from banking to healthcare. Only Bitcoin can match this level
of corporate buy in. No other cryptocoins have this much corporate
cloud.
 Ethereum comes with a great roadmap of where they want to be in years
3 to 5, and they are implementing it with a strict rigour of which the
community is proud of. This is a platform with a clear vision of where it
wants to go.

CONS:

 Bottom dollar: Ethereum is a platform, and thus will never be seen as

efficient asother faster blockchains. Many complain at the speed of
transactions for its cryptocurrency ETH.

 The roadmap instils major upgrades all the time it seems, and this
includes moving Ethereum from a proof of work platform to a more
efficient proof of stake one. This will be a tricky upgrade that will keep
the developers busy, as well as the daily attacks that happen on the
blockchain by rogue hackers.

BLOCKCHAIN DEVELOPER TOOLS:

Decentralized and public blockchains:

.Bitcoin and Ethereum are both decentralized, open source and public chains, while
Hyperledger is a private one- but also open source – created by the Linux
Foundation. Of course, they are different enough, and we have to say that Bitcoin is
not a good choice to build apps on because it was designed for peer-to-peer
transactions and not for this task.

Tierion:

It enables to create a verifiable database of any data or process on the bitcoin

blockchain by offering developer tools & API to add data to the distributed
ledger. Tierior has also developed an open standard called ChainPoint for recording
data and generating receipts that contain all the info needed to verify the data without
relying on any intermediaries.
Embark:

It is a developer framework for Ethereum dapps, so this means that it allows you
to easily develop and deploy dapps, or a serverless html5 application that uses
decentralized technologies. Embark enables you to create new smart contracts and
make them available in the JS code. Also, it watches for changes, and if you update the
contract, Embark will automatically modify the contracts .

Solc:

Solc is the Solidity Compiler (Solidity is the programming language to write

code on the Ethereum chain). A good number of Ethereum nodes natively includes a
solc implementation, but it is also packaged as a standalone module for an offline
compiling. So, you can decide to use web3.eth.compile.solidity to compile your Solidity
files using your node, or you can start using a solc.compile that doesn’t rely on any
external node.

Ether Scripter:

This is a tool that helps you writing the script (or code) of your smart contract. It
is an user-friendly platform created back in 2014. At the moment, it can only be used
with the Serpent programming language.

Coinbase’s API:

Coinbase’s APIs allow blockchain developers to easily build new bitcoin apps
and integrate bitcoin into already existing applications. This system enables a wide
range of capabilities from gathering read-only data to building something really
new. Also, Coinbase’s APIs provides a system to create bitcoin wallets and addresses,
buy, sell, send and receive bitcoins worldwide, and they offer several client libraries
and mobile SDKs that are quite useful for a developer.

Mist:

For Ethereum developer, you can use Mist not only to store Ether or send
transactions but also to deploy smart contracts. You can use the native Mist
application in order to develop your dapps on the Ethereum blockchain or on its
testnet. You just have to get Mist and start working on the browser. Of course, to
execute your own smart contract you will need to spend some Ether, as the fuel to run
it on the Ethereum network. Ether, in fact, is like the electricity that keeps Ethereum
alive.
Blockchain Testnet:

If you are blockchain developer, whether you want to create a new dapp
using Ethereum or another chain, you should use the related testnet or a system that
works as a substitute for the real blockchain that you will want to use for the real dapp.

BaaS: blockchain as a service by Microsoft:

Microsoft Azure created the so-called BaaS, or Blockchain as a service, a useful

tool for developers to build dapps in a safe and cheaper environment that supports
several chains, including MultiChain, Eris, Storj, and Augur. BaaS was created with the
main goal of enabling the backend the capabilities needed by blockchain solutions, so
you can launch the blockchain with just a few clicks, rather than setting up your own
on Azure.