A public key is a unique alphanumeric string that is generated from a private key. It serves as an address that others can use to send funds or encrypted messages to you. You can think of it as similar to a bank account number. Just like you can share your account number with others to receive money, you can freely share your public key with anyone without compromising the security of your funds.
A private key is a randomly generated, secret alphanumeric string that is associated with your public key. It is essentially the key to your digital assets and should be kept confidential. You can think of it as your personal password or signature that grants you access and control over your funds. If someone gains access to your private key, they can potentially steal your digital assets or perform transactions on your behalf.Read More
Also read: What is cryptography?
Let’s understand how public and private keys work with an example
Imagine you have a mailbox, and you want people to send you letters. In this analogy, your mailbox represents your public key. It’s a unique address where others can send you mail without knowing your actual home address. You can freely share your mailbox address with anyone, just like you can share your public key in cryptocurrency.
Now, to access the letters inside your mailbox, you need a key. This key represents your private key. It’s a secret key that only you possess, and it grants you exclusive access to the letters inside your mailbox. If someone else were to get a hold of your key, they could open your mailbox and read your letters. Similarly, in cryptocurrency, your private key must be kept secure because it provides access and control over your digital assets.
In the world of cryptocurrencies, these concepts are applied to secure transactions and ownership of digital assets. Just like your mailbox and key, public and private keys ensure that transactions are secure and that only the rightful owner can access and control their digital assets.
Digital signature:
When you make a cryptocurrency transaction, you create a digital signature using your private key. This signature acts as a seal of authenticity, verifying that the transaction was authorized by the owner of the private key. The public key is then used by the network to verify the signature and confirm the transaction’s validity.
Keep your private key secret
It is important to emphasize that while the public key can be freely shared, the private key must be kept secure and confidential. Losing your private key can result in permanent loss of access to your digital assets. Additionally, if someone gains unauthorized access to your private key, they can take control of your funds and perform transactions without your consent. To mitigate these risks, it is recommended to use secure cryptocurrency wallets that offer encrypted storage for private keys and additional security measures, such as two-factor authentication.
