*It is important to note that the core bitcoin network/ledger does not use any encryption. It is all hashing as explained here - https://www.narendranaidu.com/2022/05/ruminating-on-proof-of-work.html
But each and every transaction is digitally signed by a user (or wallet).
Hence a bitcoin network uses digital signatures and as we know a digital signature is nothing but an encrypted hash of the data.
You can digitally sign any data in the following way (creating an encrypted hash of the data)
- Hash the data using SHA-256.
- Encrypt the generated hash using your private key.
- Package this encrypted hash and your public key together.
The public key is part of the digital signature, whereas the private key is securely stored in a digital wallet (never to be shared with anyone).
In the bitcoin network, this digital signature is created using the Elliptic Curve Digital Signature Algorithm (ECDS). ECC encryption is not used! - Many folks get confused by this :)
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