Today we’ll talk about how to keep our bitcoins safe. This network is rightly called the most reliable and thought out. And this is not surprising – Bitcoin was the first of its kind and it concentrated a lot of previously unseen innovations. One of them is the “private key”.
Keys exist in private and public types – let’s get acquainted with them using an example. To do this, consider the mailbox in which you receive ordinary mail. He has a one-of-a-kind address, and if someone should deliver a letter to you – for this he must know him. And you have a real physical private key with which you open the box and pick up the contents.
For security reasons, you always monitor your key and do not give it to strangers. Just like the number of your house or apartment, anyone in the world of bitcoins can know your open address on the blockchain to send you currency. And in order to unlock (spend or send) these bitcoins, you will need your personal address (or key), for which you are fully responsible, as well as for the key to the physical mailbox.
What does Bitcoin’s private key look like
A private key is a secret password or number consisting of numbers and letters that is used to carry out all financial transactions on the blockchain network.
This is a 256-bit number that is randomly generated at the time the wallet is created. The level of key uniqueness is determined by cryptographic technologies – there are no failures in this process.
The private key looks like this:
What is a public key
This is another long number also from different characters, which is obtained from private keys only using cryptographic calculations. It is not possible to reverse engineer and obtain the private key from which it was generated. This address is used to publicly receive bitcoins.
Here’s what the public address of Bitcoin looks like:
This address is visible to any network user and is used for incoming transactions. An infinite number of such addresses can be created on the blockchain.
What are Bitcoin private keys used for
Private keys are used to make irreversible transactions. This irreversibility is guaranteed by cryptographic signatures that verify, confirm and save each operation. And for each transaction, these signatures are unique, even if they are generated from the same private keys. This feature makes them impossible to duplicate.
Users can use their private keys an infinite number of times. This key is used to confirm that you own a specific cryptocurrency address. When you have control over the private key, you can complete the transaction and use the funds tied to this address.
A private key is something that you should never share with an individual or legal entity; Therefore, it is called ‘private’.
How the private key works
The private key is just your way of saying: ‘This address is mine, and I have access to it.’ Coins are stored on the blockchain, and not in your personal key. Keys are stored in wallets and, therefore, coins are NOT stored in a cryptocurrency wallet – this is a common misconception. You do not need additional storage for your keys.
However, it is reckless not to take any security measures – it is recommended that you keep your private keys in a safe wallet. To make a cryptocurrency transaction, you need to prove that you are the owner of the address. This is confirmed by the fact that you are the owner of the private key. It may seem strange that such important information must be provided for confirmation, but this private number is never broadcast anywhere.
To make the private key publicly available means harming the confidentiality and encryption that underlie any blockchain.
In fact, a private key is just like a PIN from a credit card or a password from an account in online banking is only more complicated. If the pin code can be hacked or picked up, then it is impossible to crank this with a private key.
Nevertheless, the more assets on your accounts – the more you are a welcome prey for attackers, therefore it is better to store your private keys in wallets, which in turn are protected by seed-phrase, digital or alphanumeric password.