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Coinbase Launches Open Source Encryption

The library will help develop complex cryptographic techniques to meet the needs of the growing DeFi industry.

On Monday, Coinbase, the world’s fourth-largest cryptocurrency exchange by turnover, announced the creation of a new cryptography library, Kryptology, as a compendium of blockchain developer tools. This includes secure, audited, and easy-to-use APIs, as well as a repository of common issues and lessons learned throughout the history of cryptography.

Without encryption, cryptocurrencies like Bitcoin would be lines of digital code that anyone can copy/paste. It would be easily replicable and falsifiable, leading to big problems like spending double the money. Recent advances include Boneh-Lynn-Shacham, or BLS, companies that senders cannot deny the validity of their transactions, ensuring that their data is securely stored. Another recent adoption is the Shamir Secret Sharing, or SSS, algorithm. The SSS shares a secret security between several participants, called shareholders, who must work together to rebuild the secret. The setup is ideal for storing private keys that have access to decentralized finance, or DeFi, smart pools and contracts that lock a large amount of money.

Then there are zero knowledge tests, ensuring that encrypted messages can be transmitted and validated without revealing underlying personal data, making them ideal for use in complex DeFi applications. Finally, designing new elliptic curves, such as Pasta, could also potentially improve cryptographic portfolios.

One of the main areas of innovation in cryptography is privacy coins, which can allow users to avoid tracking blockchain forensic signatures and prevent outsiders from seeing the details of their transactions. Law enforcement agencies have rejected this technology because of its ability to promote illicit activities.

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