What Is A Public And Private Key In Cryptocurrency?

A crypto key is, essentially, a digital passcode. Which ensures that only the rightful owners get access to their digital wallet or funds. While this can improve the overall security of the storage and your money. If you lose this key, someone else can impersonate you and steal everything. 

However, your crypto security isn’t just based on a single key, it needs two to click perfectly. This combination of a private and a public key forms. The foundation of wallet security and keeps your digital assets protected while making seamless transactions.  

But why is having and protecting both of these keys necessary? Let’s find out. 

What’s Up With The Public And Private Key Pairs 

If you have a mailbox outside your house, almost anyone can reach and drop a letter in it. As long as they know your address. This is exactly how a public key works. If you want someone to send crypto coins to you, you provide them with this key. And they’ll send the money to your address. 

On the other hand, once the mail has been dropped. You’ll need a key to open up the box and see what’s in there, right? That’s what a private key does. Once someone sends cryptocurrency, you will need your private key to open your account and check if the fund has arrived or not. 

If someone knows your public key information, the only thing they’ll be able to do is check your address. But in case you lose your private key, all your precious digital assets could be gone forever. And thanks to blockchain being unchangeable, you won’t get it back as well. 

How Do These Keys Work? 

If someone is trying to trade with you or send you some money, you have to provide them with your public key. It works like your bank account number – so, the person has to write down the information you’ve provided to complete the transaction. 

Now, when this transaction is happening, their private key generates a new digital signature, kind of like a personalized stamp. This proves that they are the true owners of the money they’re sending without revealing information about the cryptographic key. 

Also, as a transparent ledger, a blockchain network will keep track of every transaction that’s happening on it. So, even if you lose your private key and someone steals your money by using it, you can still find the account where the funds were sent. 

But how do you keep these keys secure? 

Public keys usually don’t require any source of security, as no one can use them to get access to your account or steal your money. However private keys should be kept in a secure place, such as in a hardware wallet. These physical devices can keep your digital assets offline, which will make it impossible for hackers to access them.  

Apart from this, you can also keep a backup of these passcodes in your personal diary. This way, even if your hardware storage gets damaged, you can still access your money without using it. Furthermore, using a multi-factor authentication system will ensure that no one is able to access your keys, even if you’ve kept them in an online wallet. 

What If You Lose Your Keys 

Losing your private key is a nightmare incarnate, but we’ve already said that before. So, now, let’s talk about what you can do if you have taken the wrong turn. 

Once you create an account or buy a wallet, you’ll be asked to create a seed phrase. It’s just a series of random words (12-24) sitting together that can restore your wallet if you ever lose its access. After you receive it, it’s important that you write it down on a piece of paper, and NOT in your phone – because, if it gets lost, you’ll lose the seed phrase as well.  

So, if you ever lose your device (or it gets damaged) or someone steals your data and money – you can use the seed phrase to get it back. Oh, and don’t forget to report the account that has tried to take your funds to a digital asset regulatory agency in your country or the Customer Protection Bureau. They’ll ban the account and take necessary actions later on. 

So, That’s It? 

Keeping your crypto wallet and its keys safe isn’t a difficult task, as long as you’re not being too casual with it. We’d suggest you keep a backup of everything, from your private keys to seed phrases to passwords properly – if possible, write ‘em down in your diary and hide it somewhere. The more suspicious you are of everyone, the better.