Blockchain/Bitcoin for beginners 3: public/private keys, signatures… and first ever transaction


Detailed overview of public/private key encryption and live demo of exactly how digital signatures work on Mac, combining public and private keys and hash functions. Welcome to episode 3 of my series on Blockchain/Bitcoin. I'm joined once again by my girlfriend Nadisha who is my classroom pupil... I build on the hash function concepts from the previous episode and explain the basic concepts public and private keys and how to use them to create digital signatures - a key part of the bitcoin infrastructure. We demonstrate in a Mac terminal how you can generate your own keys and encrypt and decrypt and sign your own resources - learning by doing always works. We touch on bitcoin addresses, what they represent and how they are created. Finally I go back for a refresh of the bitcoin blockchain browser and look at the first ever bitcoin transaction in the "Genesis Block" to show what a real bitcoin address looks like. Bitcoin Blockchain browser Online hash calculator - great way to practice and familiarise with hash functions - one of the most important building blocks of Blockchain/Bitcoin Course to date (previous videos) 1. Blockchain introduction 2. Hashing, blockchain networks and look at blockchain browser SAMPLE COMMANDS: You will need to use your own document - pick any document, obviously your hash values will be different to mine. Also I had to use (right arrow) - since comments do not allow "chevron" symbols # EXAMPLE 1: # generate public and private keys openssl genrsa -out mykey 2048; cp mykey privatekey; openssl rsa -in mykey -pubout -out publickey; rm mike #encrypt with public key echo “the cat sat on the mat” | openssl rsautl -encrypt -pubin -inkey publicly (right arrow) cipher.txt # show the garbage cat cipher.txt # decrypt with private key - The cat sat on the mat cat cipher.txt | openssl rsautl -decrypt -inkey privately # EXAMPLE 2: Sign Alice in wonderland #check the SHA256 hash of the document to send - d9db7b8984d808b2821070cc6cc76e4415229d3356452b2a0f06ec3608f13b6c shasum -a 256 alice-in-wonderland.txt | cut -d" " -f1 # create a text file called signature which hashes the document and encrypts with private key shasum -a 256 alice-in-wonderland.txt | cut -d" " -f1 | openssl rsautl -inkey privatekey -sign (right arrow) signature # wrap the signature up with the public key, the document and the signature and send it … we just copy to another folder tar -cvf alice.tar signature alice-in-wonderland.txt publickey;mkdir -p inbox;cp alice.tar inbox;cd inbox;tar -xvf alice.tar # inspect the public key and verify with the sender that it belongs to the sender cat publickey #decrypt the signature with the received public key - d9db7b8984d808b2821070cc6cc76e4415229d3356452b2a0f06ec3608f13b6c openssl rsautl -inkey publickey -pubin -in signature # hash the received document - d9db7b8984d808b2821070cc6cc76e4415229d3356452b2a0f06ec3608f13b6c shasum -a 256 alice-in-wonderland.txt | cut -d" " -f1 # if they are both the same then the document cannot have been changed since it was signed by the genuine owner of the # private key corresponding to the public key