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The aphorism Knowledge is Power is usually credited to Sir Francis Bacon, but the same idea can be found echoed in spiritual and philosophical traditions around the world.

Since ancient times, the wise and the powerful have sought to preserve their knowledge (and their power) by concealing sensitive information with cryptography.

Today, cryptography plays a hidden role in many everyday tasks—like accessing a webpage via https://, sending a WhatsApp message, or even logging in to your smartphone.

Let’s take a look back at how we got here, and see how cryptographic methods have evolved to enable sophisticated technologies and concepts like Web 3.0 and digital scarcity.

Find out more about the evolution of encryption in our ebook, From Lock and Key to Cryptographic Code: Solving the Security and Compliance Challenges of Crypto Asset Custody.

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Cryptographic origins

The first cryptographic tools can be traced back to the seventh century BC, when Spartan warriors in Ancient Greece would pass secret messages to each other using a simple method of encryption: the cipher.

Cipher: a system of writing that prevents most people from understanding the message.

Messengers would wear a leather belt called a Scytale that was inscribed with what seemed to be a nonsensical sequence of characters. When the messenger reached his destination, this code could be deciphered by stretching the belt around a piece of wood of a specific diameter—revealing a hidden message.

This cryptographic technique served two purposes: protecting the integrity of messages, and maintaining secrecy.

The message could only be understood by the intended recipient—an allied military commander who would already have been provided with the decryption device, and the message could not be altered without this becoming evident when the belt was stretched out.

 

pasted image 0Scytale, Wikimedia Commons

 

The Caesar Cipher, devised by Roman dictator Julius Caesar, was another early encryption method that relied on shifting letters around so that each character in the cipher represented a letter at a different position in the alphabet. Just like the Scytale, this was used to help Roman military officers communicate securely.

 

pasted image 0 (1)

                                                                                                                             Caesar Cipher, Wikimedia Commons

 

Greek tyrant Histiaeus was responsible for another cryptographic innovation. To send a secret message to his allies in the war against the Persians, he singled out his most trusted slave and tattooed a message on his shaved head. Then, he waited for the hair to grow back before sending him off to meet with the allied military commander.

This is one of the first recorded examples of steganography—a cryptographic technique which hides messages in plain sight.

Steganography: the art or practice of concealing a message, image, or file within another message, image, or file.

Despite being quite primitive, this cryptographic method has persisted today, but is now used for entertainment purposes by artists like Pascal Boyart, who encoded a bitcoin private key in his pro-crypto mural on the streets of Paris.

 

Cryptographic evolution

Ciphers and concealed messages remain essential military tools. During WWII, great effort was focused on cracking the German multi layer cipher "Enigma" code. Finally broken by Alan Turing and his team — many credit this effort as the turning point to the allies winning the war.

Since then, computers have developed exponentially, and most ciphers can easily be cracked with a simple algorithm and a high-performance processor.

To stay secure, the next phase of cryptographic tools needed to work on a new paradigm—an approach which led GCHQ cryptographers James Ellis and Clifford Cox to create a form of encryption that would set the stage for the invention of the internet, and a few years afterwards, the invention of cryptocurrency.

Public key cryptography, which was declassified in 1997 almost thirty years after its discovery, is a form of encryption that relies on two keys—a public key and a private key.

The public key algorithm generates a public and private key that are mathematically linked to each other: Data that has been encrypted by a public key can only be decrypted by the matching private key.

Bitcoin addresses are one form of this public/private key system. The sender of the bitcoin uses the recipient's public key to encrypt the numbers that are sent, and the recipient uses their corresponding private key to decrypt them.

 

Cryptographic futures

As technology develops, more ways to encrypt messages emerge, along with more ways to decrypt them. This creates a never ending game of cat and mouse, as each time a cryptographic method is solved, the power balance shifts.

Quantum computing is thought to be the upcoming threat to existing cryptographic methods which some suggest could make certain cryptocurrencies obsolete. Research has already begun into the development of post-quantum cryptographic methods which will again have impossible odds of decryption even with the computational power of qubits.

This ongoing evolution is responsible for the cambrian explosion of cryptoassets — putting real force behind ideas of digital scarcity, and turning the abstract idea of peer-to-peer trustless transactions into an everyday reality.

So far, the uptake of cryptocurrency has been driven by curious retail individuals, and large traditional institutions have struggled to reconcile this new asset class within their traditional model of custodianship.

The innovators and entrepreneurial community has listened and developed concepts of industrial cold storage, allowing the traditional players to make their first steps into this world. Indeed, the cold storage custodians have bloomed, but they have a chink in their armour, they fail to recognise the true nature of cryptographic assets, and the possibility of a custodial solution governed by the same laws that control cryptocurrency—the laws of mathematics, rather than fallible people.

Qredo uses battle-tested cryptographic processes to help you manage and secure your keys, extending the process of cryptographic evolution to custodianship for retail and institutional players alike.

Find out more about the past, present and future of cryptography in our ebook, From Lock and Key to Cryptographic Code: Solving the Security and Compliance Challenges of Crypto Asset Custody.

Solving the security and compliance challenges of crypto asset custody