Describe the difference between symmetric and asymmetric encryption, and specify which type is used for securing transactions on a blockchain.

Symmetric and asymmetric encryption are two fundamental approaches to encrypting data, each with distinct characteristics, advantages, and use cases. Symmetric encryption uses a single key for both encryption and decryption, while asymmetric encryption employs a pair of keys—a public key and a private key—for these processes.

In symmetric encryption, the same secret key is used to encrypt and decrypt data. This key must be shared between the sender and receiver securely. Examples of symmetric encryption algorithms include AES (Advanced Encryption Standard) and DES (Data Encryption Standard). The primary advantage of symmetric encryption is its speed and efficiency. It is much faster than asymmetric encryption, which makes it suitable for encrypting large volumes of data. However, the main drawback lies in the need for a secure channel for key exchange. If the shared secret key is compromised, the security of all encrypted communications becomes compromised. For example, in a file-sharing application, if you use the same key to encrypt and decrypt a file, you would need to securely provide that key to the recipient so that they can decrypt it. The secure sharing of that single key is a challenge.

Asymmetric encryption, also known as public-key cryptography, overcomes the key exchange problem of symmetric encryption by using a pair of keys: a public key and a private key. The public key can be shared openly, and anyone can use it to encrypt data. However, the data can only be decrypted by the corresponding private key, which is kept secret by the owner. Examples of asymmetric encryption algorithms include RSA and ECC (Elliptic Curve Cryptography). The advantage of asymmetric encryption is that it allows secure communication without having to exchange a secret key securely. Anyone can encrypt a message using the recipient's public key, but only the recipient holding the corresponding private key can decrypt it. The disadvantage is that it is slower and more computationally intensive than symmetric encryption. For example, in email encryption, you would use the recipient’s public key to encrypt the email. Then, only the recipient with the corresponding private key can decrypt and read it. The need to manage two keys makes it more complex.

For securing transactions on a blockchain, asymmetric encryption is primarily used. This is because of its unique ability to authenticate transactions and ensure privacy without relying on a shared secret key. When a user initiates a transaction, they use their private key to create a digital signature that is attached to the transaction data. This signature is a unique cryptographic identifier and proves that the user authorized the transaction. The network can then verify the validity of the signature using the user's public key, which is associated with their wallet address. This verifies the authenticity of the transaction and that it was initiated by the wallet owner without compromising their private key. The actual transaction data itself is not encrypted via asymmetric encryption; it is hashed. Thus, asymmetric encryption provides both non-repudiation and integrity, by ensuring that the transaction cannot be altered by any third party and only the user with the private key could have made the transaction. This also verifies that the public key does indeed belong to the private key owner.

In summary, symmetric encryption is faster and uses the same key for encryption and decryption but has the key exchange problem. Asymmetric encryption is slower and uses a pair of public and private keys, allowing for secure communication without needing a prior secure key exchange. Blockchain transactions leverage asymmetric encryption for secure authentication and non-repudiation because it allows verification of the source of the transaction, while preserving the private key and thus securing the assets.