For crypto explorers new and old, there are two things that you will definitely come across. There are two keys that every crypto wallet comes with – one private key and one public. The idea of a public key may be foreign to some, since keys are typically used to get into secure and private places, but that’s not what a public key is for. The public key is public, and even your digital assets will not be compromised if it’s revealed. Private keys, however, are different.
How are they different? Let’s first take a look at how they are generated and how they do their jobs.
An Intro to Private and Public Key Cryptography
So, what are private and public keys, and why does your crypto wallet need two? They are partners in crime, a dynamic duo if you will, and each key is unique to the wallet. Each public key has a corresponding private key. Your private key is your secret, like a hidden treasure map. Your public key, on the other hand, can be freely shared.
Although they are linked, you can’t figure out the private key from the public one. The treasures in your wallet are safe despite one of the keys being public knowledge.
How are Public and Private Keys Generated?
Now, let’s dive into the key generation.
Generating a pair of public and private keys begins with a process known as a key algorithm. This starts by randomly generating a private key, which is essentially a large, random number. Next, the private key undergoes a series of complex, one-way mathematical operations, a process often referred to as a one-way function. The result of these operations is the public key.
How Do They Work?
What does the above all mean? Here is an easier example to understand.
Think of your private key as a specific amount of Bitcoin. This Bitcoin is represented as a super complex number that you keep safely tucked away in your digital wallet. This is yours alone, like your very own secret password.
Now, to receive Bitcoin from others, you don’t want to give them access to your secret password, right? So, you put this number (your private key) through a mathematical formula. This formula is like a Bitcoin minting machine, turning your Bitcoin into a shiny new coin with its own unique pattern — that’s your public key.
The public key is like a coin deposit box address that people can send Bitcoins to. They can look at the coin and its pattern, but they can’t reverse-engineer it back into your secret Bitcoin number. This means that despite knowing the address (public key) and seeing the coin (the data it secures), there’s no way for them to figure out your original secret password (private key) to get to your assets.
In the context of cryptocurrencies, the public key is like your account number that you can share with others so they can send you money, while the private key is like the PIN to that account, which you use to access your funds and approve transactions. Just like you wouldn’t share your PIN with anyone, you should also keep your private key secret to ensure the security of your digital wallet.
Public Keys VS Private Keys
- Public keys are publicly accessible and can be shared with anyone, removing any security worries.
- In public key encryption, they are used by others to convert plain text into cipher text, scrambling information so it’s unreadable to anyone without the matching private key.
- Public keys can verify digital signatures to authenticate that a transaction or message is genuine and from the stated sender.
- In crypto, public keys act as addresses where funds are sent, like a PO Box only the intended recipient can access.
- They are derived from the private key through a one-way mathematical function in public key cryptography.
- Can’t decrypt the cipher text or access funds; that job is reserved for the private key (owned by the intended recipient).
- Crucial and must be kept secret and secure. They provide the intended recipient with exclusive access to the information or funds.
- In public key cryptography, private keys decrypt cipher text back into plain text, making the scrambled information readable again.
- Used to create digital signatures, which serve as a confirmation of the sender’s authenticity.
- In crypto transactions, private keys are used by the wallet’s owner to access and send funds.
- The private key is the starting point in public key cryptography. It’s a unique, random string of numbers from which the matching public key is generated.
- The security of the system is maintained because private keys cannot be reverse-engineered from their corresponding public keys.
How to Store Your Private Key Safely
Both these keys play vital roles in holding your crypto assets in a secure wallet. So, how do you store your private key safely?
You can start by using a paper wallet, which can sometimes be as literal as using a piece of paper and jotting down your private key. However, we all know that paper is quite fragile and is susceptible to the elements. So, why not go for something fireproof and water-resistant like the SecuX XSEED line of “paper wallets”, but by paper we actually mean stainless steel and aluminum.
The XSEED line is extra secure and has storage for up to 8 wallets/backup sets of 12 recovery words or 4 wallets/backup sets of 24 recovery words. After self-engraving your private key onto the surface of the card, store it in a safe place.
Remember that you cannot recover a lost private key. So, ensure you have multiple copies stored in separate and secure locations. Keeping your private key secure is essential, and a product like the SecuX XSEED can provide a reliable solution. Remember, your private key is like the key to a treasure chest. Protect it like one!