Public Key And Private Key: Everything You Need To Know In 2022
Cryptocurrency wallets are the medium for digital transactions where they store keys. When we talk about crypto keys, there are two types of keys available: a public key and private key.
Any person dealing with cryptocurrency should know about the keys. They might have questions like how is a key related to cryptocurrency? What work do they do?
Public Key And Private Key – Explained
Well, before entering the cryptocurrency world we need to have a basic knowledge of the keys so that the decisions making and trading of the currencies can be done smoothly.
Hence in this article, we will discuss the cryptocurrency keys public key and private key in detail. So, let’s get started with it.
What Are Cryptocurrency Keys?
Cryptography involves techniques through which information related to various things can be kept confidential to prevent any third-party involvement.
To encode or decode any cryptography information, a set of letters and numbers are stored that, when needed, are processed through an algorithm. This set of numbers and letters is known as keys.
The cryptocurrency keys are of various sizes and categories. This key works on an algorithm and is used to keep important data and information confidential.
The information of the key must be kept secret, except for the authorized party. The whole safety and security of the system rely on this key.
What Is a Public Key?
The public key is used for cryptocurrency transactions. This key is used to encode and decode the transactions, without which any users can’t receive or send cryptocurrencies.
The public key is a long-form set of numbers and letters, which is shortened. This shortened form is known as the address and transactions are received through this address.
During a transaction, the sender sends cryptocurrency to the public key, the receiver needs to unlock it with the private key to ensure that the original owner has received the transaction.
The users of cryptocurrency can reveal and share the public key with anyone.
What Is a Private Key?
The private key is a kind of a password, however stronger than that with which the users can access their account and can withdraw amounts.
The private key consists of an alphanumeric set of characters. It can also be in the form of a QR code or mnemonic phrase.
This key is proof that the particular user is the owner of the account and is allowed to withdraw or transfer funds. It is in long form for security purposes.
Sharing of this key is strictly prohibited, because if revealed then any third party can access your account and use your funds.
How Do Public Keys And Private Keys Work?
The public key can be shared with everyone while the private key needs to be kept a secret. The public key is for encrypting and the private key is for decrypting.
A private key is a unique set of alphanumeric characters that can’t be predicted using the public key. Both the keys come under asymmetric encryption.
Let’s understand the work of both the keys with a small example:
Suppose, David wants to send some cryptocurrencies with a message to Ana. David takes Ana’s public key and sends her the transaction. Ana accesses the account with her private key and gets the shared transaction.
Even the owner companies don’t have the power to access the account, because the private key is only known by the account user.
What If I Lose My Crypto Key?
Ensuring the safety of your crypto keys is necessary. The key has access to your cryptocurrencies, and if lost you will entirely lose your holdings.
If you lose your public key, then it can be recreated with some basic steps. As public keys are sharable and don’t need to be kept a secret, losing them will not create many difficulties.
If you lose your private key then you will lose your whole crypto holdings. With the private key, you can access your account, losing it will remove you as the owner of the account and also of the cryptocurrencies.
Best Crypto Key Storage
For the safety of the private key, they need to be stored in some secure place. They can be stored on computers, mobile phones, USB drives, hardware wallets, or on a piece of paper.
Hardware Wallet For Long Term Investors
Hardware wallets are good for long-term investors, storing huge amounts of money in a physical wallet keeps it more secure. Let’s know some of the best hardware wallets:
This is the upgraded version of Ledger wallets and has more features enabled. This wallet supports 1800 coins and also supports Bluetooth. A very easy and secure wallet to use.
This wallet uses modern cryptography and also has an LED display. It has two-factor authentication for security purposes and also offers 500 altcoins for trading.
- SafePal S1
This wallet is portable and comes in the size of a credit card. Users can easily take this wallet to any place without any difficulty. It offers around 10,000 coins for trading, which means users can do all types of investments in this wallet.
Trust Wallet For Short Term Investors
This is a decentralized mobile wallet for cryptocurrencies that allows the trading and staking of coins.
The wallet has a Web3 browser and offers a wide range of currencies for staking and trading. This is a software wallet acquired by Binance.
It also has its own token called the Trust wallet token and doesn’t charge any initial fees from the users.
Do All Coins Have Public Keys and Private Keys?
Cryptocurrency wallets work on an algorithm that generates lengthy and random numbers. These numbers are converted into a private key as per the cryptocurrency requirements.
From the private key, they generate the public key. Information about these keys can be available either to the wallets or the user.
These keys are automatically generated through digital wallets for every type of coin available. If the user doesn’t have the information about these keys, then they are entirely accessible to the wallet system and they keep them safe.
But if the user knows then he has the whole access and needs to be kept safe and secure by the user.
Public Key vs Private Key: Conclusion
Cryptocurrencies are virtual currencies that don’t have any centralized regulatory body. Digital wallets give them a platform for trading and transactions.
These wallets need to ensure the safety and security of the users and their funds because users might be skeptical about these due to various reasons.
The trading and transactions of currencies are done smoothly without any third-party involvement, the wallet generates public keys and private keys.
These keys maintain the security and secrecy of the user’s funds. It’s the responsibility of the wallet owners as well as the users to follow the safety protocols and instructions for ensuring safety.