THE ROLE OF CRYPTOGRAPHY IN SECURING DISTRIBUTED LEDGER TECHNOLOGIES IN FINANCIAL SYSTEMS

Abstract

Distributed Ledger Technologies (DLTs), including Blockchain, have revolutionized financial systems by offering decentralized, transparent, and secure mechanisms for data management and transactions. However, for these systems to maintain integrity and protect sensitive financial data, robust cryptographic techniques are essential. Cryptography ensures data confidentiality, authenticity, integrity, and non-repudiation, which are critical for the security of financial transactions in DLTs. This article examines the role of cryptographic protocols such as hashing, digital signatures, asymmetric encryption, and zero-knowledge proofs in safeguarding distributed ledgers. Furthermore, we explore their applications in securing financial transactions, preventing fraud, ensuring compliance, and enhancing the overall reliability of DLTs in financial systems. The discussion also delves into the challenges of cryptographic security in the face of emerging threats and the potential impact of quantum computing on existing cryptographic protocols.