Bitcoin and encryption To the best of my understanding Bitcoin uses encryption to create the digital signature, basically, by encrypting the hashed message (transaction?).

Would like to get your expert opinion to my claim the encryption is used by the Bitcoin protocol/algorithm.
Bitcoin uses cryptography to create digital signatures and cryptographic hash functions for various purposes such as transaction ids, block ids, and to commit to specific transactions in blocks. The Bitcoin protocol itself does not use encryption anywhere, but many wallets use encryption to secure private key material. There is also a Bitcoin Improvement Proposal (BIP) that aims to introduce encrypted peer-to-peer communication between Bitcoin nodes.

To follow-up on the question in the comments:


  "You have a bit-stream and you use a means called 'private key' to generate a bit-stream based on the original and then you use a 'public key' to uncover the original bit-stream - you use encryption."


The signatures in Bitcoin are created by means of the Elliptic Curve Digital Signature Algorithm (ECDSA). ECDSA uses two functions: 


sign(privkey, message) which returns a signature
verify(pubkey, message, signature) which returns true or false


ECDSA does not qualify as an encryption algorithm, because the signature does not transport the message and there is no way to "recover the original bit-stream" from the signature. The verification of the signature validates that the correct key committed to the given message. This happens by means of evaluating an equation testing a mathematical relationship the triplet of pubkey,message,signature must fulfill for a valid signature.

H/T Pieter Wuille, David Schwartz, and John Newbery for the helpful comments.