On Monday, Coinbase, the world’s fourth-largest cryptocurrency exchange by trading volume, announced the creation of a new crypto library, Cryptology, as a toolkit for blockchain developers. This includes secure, updated, and easy-to-use APIs, and an archive of common problems and experiences throughout the history of programming.
Without encryption, cryptocurrencies like Bitcoin would be digital lines of code that anyone could copy / paste. It would be easy to copy and counterfeit, leading to big problems like using double coins. Recent developments include Boneh-Lynn-Shacham or BLS signatures, which are used to verify the identity of the sender and confirm transactions while keeping their data secure. Another recent introduction is the Shamir Secret Sharing algorithm, or SSS. The SSS shares the secret value among many participants, called participants, who must then work together to recover the secret. The design is ideal for storing private keys that serve as a gateway to decentralized finance or DeFi, pools and smart contracts that block a significant amount of money.
In addition, there is proof of ignorance which ensures that encrypted messages can be forwarded and verified without revealing sensitive personal data, making them ideal for use in complex DeFi applications. Finally, developing new elliptic curves like macaroni could also improve crypto wallets.
A leading area of crypto innovation is privacy coins, which can allow users to avoid being tracked by forensic blockchain companies and prevent third parties from seeing the details of their transactions. Law enforcement agencies avoid the use of such technology due to its potential to facilitate illegal activities.