One of the popular encryption methods is symmetric key encryption. This is a basic technique in the field of cryptography, allowing data to be encrypted and decrypted using a single public key.
What is Symmetric Encryption?
Symmetric encryption (or symmetric key encryption) is a method of encryption where the same key is used to both encrypt and decrypt data. This key is called a “symmetric key” because both parties involved in the exchange of information use a single, shared key for both the encryption and decryption processes.
In the context of the crypto and blockchain market, symmetric keys are widely used to protect sensitive data. Prominent applications include securing transaction information, protecting cryptocurrency wallet data, and enabling secure communication systems.
How Symmetric Encryption Works
The core of symmetric encryption is the use of a single key for both the encryption and decryption processes. This is the biggest difference between symmetric encryption and asymmetric encryption, which requires two keys (a public key and a private key).
The mechanism of encryption focuses on two main parts:
- Encryption: The original data (plaintext) is transformed into encrypted data (ciphertext) using the shared key.
- Decryption: To recover the original data, the recipient uses the same shared key to decrypt the ciphertext back into its original form (plaintext).
Let’s say A wants to send a message to B. A will encrypt that message using the shared key that both A and B know. After receiving the encrypted message, B will use that shared key to decrypt and read the original message. However, if a third party does not have this shared key, they will not be able to decrypt the information.
Symmetric keys are often used in situations that require speed and processing of large amounts of data because it is faster than asymmetric encryption. However, one of the main limitations is secure key transmission. If the key is compromised, all data can be exposed.
A report from Chainalysis indicates that over 60% of attacks on the crypto market are related to compromising symmetric encryption keys or lacking strong security in key management.
Common Symmetric Encryption Algorithms
There are many algorithms used in symmetric encryption, but here are the most common ones in the crypto market:
- AES (Advanced Encryption Standard): AES is one of the most widely used symmetric encryption algorithms today. It offers three key length options: 128, 192, and 256 bits, with AES-256 being the highest level of security and commonly used in many security systems, including crypto wallets like Ledger and Trezor.
- DES (Data Encryption Standard): Although now obsolete, DES was once one of the most popular symmetric encryption methods.
- Blowfish and Twofish: These two algorithms are also commonly used in security applications to protect sensitive data. They are often used as an alternative to AES in some applications.
Applications of Symmetric Encryption in the Crypto Market
The focus in the application of encryption types is to help with security. With the mechanism of using the same key for both encryption and decryption, symmetric encryption helps ensure that sensitive information such as private keys, transaction data, and users’ personal information is securely protected.
For example, when users transact on cryptocurrency exchanges or interact with crypto wallets, symmetric encryption helps encrypt information to prevent data theft or attacks.
Layer 2 scaling solutions like Optimism and Arbitrum in the crypto market use symmetric keys to encrypt and secure off-chain transactions before they are verified and brought back to the main blockchain. This not only helps speed up transactions but also ensures data security.
In addition, this technology is also used to protect off-chain data in decentralized applications (dApps) and in storing users’ sensitive information. Many large exchanges and DeFi platforms such as Aave or Compound also integrate symmetric encryption to protect users’ assets from cyberattacks.
According to a report from Cointelegraph in 2023, more than 80% of major cryptocurrency wallets and exchanges use symmetric encryption algorithms such as AES to protect customer and transaction information. Symmetric encryption has proven effective in mitigating security risks, creating a safe environment for the crypto market to grow stronger.
Read more: The role of cryptography in blockchain.
Challenges in Using Symmetric Keys in Crypto
Key Sharing and Management Issues
In symmetric encryption, both parties need to have the same key to encrypt and decrypt information. This requires the key to be securely shared between the parties. However, this process can cause security vulnerabilities if the key is stolen during transmission. Once the secret key is compromised, all encrypted information can be decrypted.
One method to address this challenge is to combine symmetric encryption with asymmetric encryption. In this case, asymmetric encryption is used to securely exchange symmetric keys. For example, security protocols like SSL/TLS use symmetric encryption for data transmission after the key has been securely exchanged via asymmetric encryption.
Vulnerability to Brute-Force Attacks
Although symmetric encryption like AES has a high level of security, there is still a risk of brute-force attacks, especially when the encryption key has a short length (for example, the 56 bits of DES). This requires users and organizations to use encryption methods with larger key lengths (such as AES-256) to ensure the safety of digital assets.
In the late 1990s, the Electronic Frontier Foundation (EFF) created a machine called Deep Crack, specifically designed for brute-force attacks on DES encryption. DES uses a 56-bit key length, and although previously considered secure, advances in technology have made brute-force attacks feasible.
Deep Crack proved this when it successfully decrypted a DES-encrypted message in just about 22 hours. The cost of building the Deep Crack machine was about $250,000, and it could try 88 billion keys per second.
This successful brute-force attack showed that DES is no longer secure against well-resourced adversaries, leading to the transition to the AES encryption standard, which provides a much stronger level of protection.
Risks When the Key is Exposed
In symmetric encryption, only one secret key is used for both encryption and decryption. If this key is exposed, attackers can access all data encrypted with that key. This is especially dangerous in the crypto market, where transaction information and personal data are highly sensitive.
Frequently changing the key is one solution to mitigate this risk. Additionally, implementing security mechanisms like multi-factor authentication (MFA) and hardware security modules (HSMs) for key management can also help reduce risk. Tools like Key Management Systems (KMS) that support secure key management and storage are also recommended.
Some crypto exchange hacks have occurred due to errors in secret key management. For example, the Mt. Gox exchange lost over 850,000 Bitcoin due to exposed secret keys.
Insider Threat Risk
If an employee or user with access to the symmetric key engages in malicious behavior, encrypted data can be easily compromised from within. This is especially dangerous in financial institutions and large crypto exchanges.
Employing Zero Trust Architecture and a decentralized access control system can help mitigate insider threat risks. Additionally, using multi-factor authentication and strict access management can help minimize this risk.
The Threat of Quantum Computing
One of the biggest challenges to symmetric encryption in the future is the development of quantum computers. Quantum computers can break current encryption algorithms quickly. This is raising concerns about the security of security systems based on symmetric keys in the near future.
Comparing Symmetric Keys and Asymmetric Keys
To better understand the role of symmetric keys in the crypto market, it is important to compare them with asymmetric keys (asymmetric encryption).
In asymmetric key cryptography, there are two separate keys: a public key and a private key. The public key is used to encrypt data, while only the private key can decrypt it. Asymmetric keys are often used in crypto transactions because they do not require users to share their security keys with others.
However, because asymmetric key encryption is significantly slower than symmetric key encryption, it is often combined with symmetric keys in crypto applications for maximum efficiency. For example, asymmetric keys can be used to securely transmit symmetric keys.
- Symmetric Key: Suitable when encrypting large amounts of data and requiring speed, but faces difficulties in secure key exchange.
- Asymmetric Key: Suitable for applications requiring secure key exchange without sharing the private key, but not efficient when encrypting large amounts of data due to slow speed.
In the future, symmetric keys are expected to continue to play an important role in the crypto market. With the development of technologies like zk-SNARKs in Zero-Knowledge Proof systems, symmetric keys can be integrated into more advanced security protocols, helping to enhance anonymity and security for users.
Furthermore, with the rise of decentralized applications (dApps) and new-generation blockchain networks, the combination of symmetric and asymmetric keys will become even more prevalent.
Read more: What is asymmetric encryption? Applications of Asymmetric Encryption in Crypto.
