Discover the critical distinction between private keys and public keys, and why “not your keys, not your coins” is essential.
Private keys are an essential part of the crypto network infrastructure because you need them to sign transaction requests.
In this guide, you will learn about public key cryptography and how private keys are used in crypto wallets.
Cryptography is the technique of secure communication in the presence of third parties. Public key cryptography (PKC) employs a pair of unique keys to encode and decode messages: the public key and private key.
A public key is, as the name suggests, open to the public and can be given to anyone. Conversely, a private key must be safeguarded so that the system remains secure.
PKC is a type of cryptography where a public key and private key are used. This allows for the user to encrypt information using their public key and share it publicly while also making sure that only the intended recipient can decrypt it through use of the corresponding private key.
Three computer scientists named Ron Rivest, Adi Shamir and Leonard Adleman publicly revealed the first asymmetric cryptography scheme in 1977. They called their system RSA after the initials of their last names. The system would generate two keys through a series of mathematical computations.
RSA keys are used to encode and decode messages, so that only the authorized recipient can read them.
Before the arrival of RSA cryptography, all cipher systems used symmetric key cryptography, which employs only one key to both encrypt and decrypt data. In this system, it was critical to keep this key secure. Sharing this key with all scheme participants had to happen through a safe channel before any data could be transferred. Although this was possible between two people, it became more complicated and difficult to manage as more people got involved in the scheme–a substantial security risk.
The entry of the RSA scheme provided a solution to this challenge.
RSA is based on the concept that it’s tough to factorize a large integer. A public key contains two numbers—one of which is the product of two vast prime numbers, and the corresponding private key also hails from those same two prime numbers.
Consequently, we can observe that the cypher scheme’s potency is reliant on the size or length of the keys. this is due to if a party manages to factorize the public key, then the private key is no longer secure. Though, if keys are established to be large numbers, it would be impractical from a mathematical standpoint to break them.
Bitcoin, while not using RSA specifically, functions similarly and therefore also has long keys for security purposes. The average length of a key in Bitcoin is 1,024 to 2,048 bits.
All cryptocurrency wallets have both public and private keys to ensure safety.
A private key authenticates asset ownership and encrypts the wallet, while a public key helps to identify the wallet and receive funds.
A crypto wallet will usually give the user a twelve-word seed phrase. These words are representative of an innumerable amount of public and private keys.
The twelve-word seed phrase is a representation of your private key, but does not serve as your actual private key. In the event that you lose access to your wallet, this phrase can be used to restore it.
A private key is what you need to access your crypto wallet. For example, when you first download Trust Wallet, it generates a private key for you. At that point, the app will ask you to write down and store your seed phrase somewhere safe. After doing so, you can access your crypto wallet
If you lose your smartphone that has Trust Wallet installed, for example, redownload the app and use your twelve-word seed phrase to restore your wallet. You will then have complete access to all of your funds and be able send/receive coins again.
Whoever has access to a wallet’s private keys controls the funds in thatwallet–that is where the phrase “not your keys, not your coins” comes from.