Cipher

A cipher is the algorithm itself, the precise mathematical procedure that a key runs on data to scramble it or reverse the scrambling. The key supplies the specific input, but the cipher defines the fixed rules for how substitution, permutation, or bitwise operations turn plaintext into ciphertext, which is why the same cipher can protect completely different messages simply by using a different key.

Ciphers fall into two broad families. Symmetric ciphers, such as the Advanced Encryption Standard (AES), use one shared key for both encryption and decryption and are fast enough for bulk data, which is why AES-256 secures encrypted wallet files and hardware wallet firmware. Asymmetric ciphers, including RSA and elliptic curve algorithms, use a mathematically linked public key and private key pair, trading speed for the ability to let anyone encrypt a message that only the key holder can decrypt, without ever sharing a secret over an insecure channel.

Within symmetric cryptography, ciphers further split into block ciphers, which encrypt fixed-size chunks of data at a time (AES processes 128-bit blocks), and stream ciphers such as ChaCha20, which encrypt a continuous stream of bits and suit real-time traffic like VPN tunnels. Blockchain systems lean on both families: transaction signing on networks like Bitcoin relies on asymmetric elliptic curve cryptography, while exchanges and wallet software use symmetric ciphers to encrypt private keys and seed phrases at rest.

Cipher strength depends entirely on key length and the algorithm's resistance to known attacks; older ciphers like DES and RC4 are now considered insecure and have been retired in favor of AES and modern stream ciphers. Choosing an unproven or outdated cipher, rather than a peer-reviewed standard, remains one of the most common ways custom wallet or exchange software gets compromised.