The Difference between Public Key and Private Key

Public and private keys are fundamental to the security and privacy of a crypto wallet. They enable users to send and receive crypto without having to involve a third party to verify the transaction.

For proper and secure management of our crypto wallets, it is crucial for users to understand the differences and functions of public and private keys. In the following article, we will delve deeper into the difference between the two and how to manage them to make our crypto wallets more secure.

What is a Public Key?

A public key is a string of alphanumeric characters that its owner uses to receive crypto assets at a specific crypto wallet address. While public keys are often equated with crypto wallet addresses, the latter are technically “hashed versions” of public keys.

In essence, a public key serves to identify addresses within a blockchain network. It can be likened to a bank account number, allowing anyone who knows it to send crypto assets to your designated address. However, accessing these assets requires the corresponding private key.

What is a Private Key?

A private key is also a string of alphanumeric characters, but it is used by its owner to access a crypto wallet at a specific address. Private keys can take various forms, including 256-character binary codes, 64-digit hexadecimal codes, QR codes, and mnemonic phrases.

The primary function of a private key is to digitally sign transactions and prove ownership of crypto assets on the blockchain. Think of a private key as a PIN or password for your crypto wallet. Consequently, private keys must remain confidential and be stored securely. If an unauthorized individual gains access to a private key, they can access and take control of the associated crypto wallet.

How Public and Private Keys Work

Upon the creation of a new account on a crypto wallet, a unique public key and a corresponding private key are generated. These keys are always created as a pair because public keys are derived from private keys. From the generated public key, a shorter, more shareable version is created, which is known as the crypto wallet address.

Another reason public keys and private keys are created in pairs is to perform the encryption and decryption process of a message. When making a transaction, the sender will use the public key to encrypt the message. This encryption of the message is useful to protect sensitive or confidential information, especially when moving from the sender to the recipient.

Once in the recipient’s crypto wallet, only the owner of the corresponding private key can decrypt the incoming message and access the assets received through the transaction.

Difference between Public and Private Keys

As previously mentioned, the difference between a public key and a private key lies in their confidentiality. Public keys, similar to account numbers, are meant to be shared as they are used to receive crypto assets. Conversely, private keys, similar to PINs or passwords, must kept secret as they provide access to crypto wallets.

Another difference lies in how public keys and private keys work. When you receive crypto assets from another party, the transaction is encrypted using your public key. Then, the private key is used to create a digital signature and decrypt the message from the public key. This process confirms that the owner of the private key is the owner of the crypto wallet and that the transaction is authentic.

Storing Private Keys Tips

Given the highly confidential nature of private keys, which should never be disclosed to others, there are several methods to ensure their safe storage. Here are some essential tips for storing your private keys securely:

– Utilize a Hardware Wallet

One of the most secure methods for storing private keys is to keep them offline on a dedicated hardware device, such as Trezor or Ledger. Employing a hardware wallet significantly reduces the risk of hacking and cyberattacks.

– Back Up Your Private Keys

Upon creating a new crypto wallet, you will receive a recovery phrase, also known as a seed phrase. It is crucial to record this seed phrase and store it in a secure, offline location where it cannot be accessed by someone else.

– Avoid Online Storage

Storing private keys in email accounts or cloud storage exposes them to potential hacks and cyberattacks. If you must store them online, ensure that you enable two-factor authentication (2FA) for an added layer of security.

– Caution Against Phishing and Other Cyber Attacks 

Every time you enter your private key, verify that the site or app you are using is legitimate.