Public vs. Private Keys in Crypto: What’s the Difference?
If you own any kind of cryptocurrency, then chances are you’ve heard of public and private keys. These are fundamental in how cryptocurrency works, and ensure that your funds are kept safe from hostile parties. But how do public and private keys actually work? Today, we’ll be highlighting the differences between the two, and breaking down why they’re so important in crypto.
What Is a Private Key?
In the crypto world, your private key is about the most valuable piece of data you’ll be given. A private key acts as a passcode and is required to conduct transactions using your funds. It is effectively used to “sign” each transaction to confirm it was authorized by you. And, of course, private keys are just that, private. You should never share your private key with anyone, as it gives them direct access to your crypto.
Most crypto owners choose to store their private keys in a wallet. Today, there is an endless list of crypto wallets to choose from, each with its own perks and drawbacks. But some choose to store their private keys physically, without the use of any tech. Either way, you should ensure that your private keys are always being kept as safe as possible.
However, there are cases in which your private key is held by a third party. If you use a custodial crypto wallet, your private keys are held by the wallet provider. Some prefer this kind of wallet for its convenience, while others would rather keep their private keys to themselves, as custodial wallets can pose a security risk.
A private key comes in the form of a random alphanumeric string of characters, and can vary depending on the type of crypto it’s being used for. For example, Bitcoin uses 256-bit private keys, while Ethereum uses 64 hexadecimal character private keys.
We won’t go into how each private key type differs today, but what you should keep in mind is that every private key is formed in a process known as public-key cryptography (PKC). In this process, two large prime numbers are used to create the key itself. Cryptography itself can be a little complex but is invaluable to much of the decentralized world.
As the name suggests, public keys are also formed in this process. So, how do they differ from private keys?
What Is a Public Key?
Unlike a private key, a public key can be seen by or shared with any user on a given blockchain. Like a private key, a public key is also a long line of random characters and is unique to you and your assets. Because public keys are so long, they are shortened into wallet addresses so that people can more easily conduct transactions with you.
While you can think of a private key as a kind of password, you can think of a public key as an email address or a bank account number. They identify you or an account you own. Sharing your public key doesn’t put your crypto at risk, as there is no way through which it can be used to access or move your funds.
Though public and private keys are used for different purposes, they are very closely related to each other. In fact, your public key is generated by your private key and will always be paired with each other.
But don’t worry, it’s basically impossible to retrieve someone’s private key from their public key. If a malicious individual was to try, it would take them billions of years to be successful. In public-key cryptography, public keys encrypt, and private keys decrypt, so no funds can be stolen using a public key alone. This is why public keys don’t need to be protected, but private keys absolutely do.
Public and Private Keys Are Your Gateway to Crypto
Without public and private keys, conducting cryptocurrency transactions would be a much less secure process. With no way of knowing who is moving your funds from place to place, and without the protection levels of public-key cryptography, there’d be a lot more room for malicious individuals to get their hands on your assets. It’s this vital pair of random characters that ensures all your transactions are verifiable while your crypto is being kept safe.
What Are Crypto Private Keys and Why Are They Important?
About The Author
(257 Articles Published)
Katie is a Staff Writer at MUO with experience in content writing in travel and mental health. She as a specific interest in Samsung, and so has chosen to focus on Android in her position at MUO. She has written pieces for IMNOTABARISTA, Tourmeric and Vocal in the past, including one of her favourite pieces on remaining positive and strong through trying times, which can be found at the link above. Outside of her working life, Katie loves growing plants, cooking, and practicing yoga.
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May 9, 2022 at 04:18AM