Private Key and Public Key

When you create a cryptocurrency wallet, you will receive two keys: a public key, which functions like an email address (meaning you can safely share it with others and which allows you to send / receive funds) and a private key (also known as a seed), which is usually a string of letters and numbers (that you should never share with anyone else). You can think of the private key as a password that unlocks a virtual vault where your money is stored. If only you have access to your private key, your funds are secure and can be managed from anywhere in the world with an internet connection.

It is important to emphasize that the private key should be carefully guarded and protected from unauthorized access. If someone obtains your private key, they will have full access to your financial resources and can send or steal them. Therefore, it is important to back up and store your private key in a secure location to avoid losing access to your financial resources. You can also choose from several types of cryptocurrency wallets, such as mobile, desktop, hardware, or paper wallets, each with different levels of security.

Definition of Public Key

The public key is a fundamental component of many cryptocurrencies, including BTC, ETH, and others. It is a cryptographic code that allows the receipt of cryptocurrency transactions. The public key is paired with a private key and together they form a digital signature that provides proof of ownership of the cryptocurrency.

If someone wants to send you cryptocurrency, they need your public key, which serves as a digital address. You can share your public key with anyone and use it to receive cryptocurrency from others. However, you should keep access to your private key to yourself because it provides the necessary verification for spending received cryptocurrency.

Definition of Private Key

The private key is a secret code used to sign transactions and prove that you are the authorized owner of the sent cryptocurrency. You should keep your private key secure because anyone who has access to it can use it to spend your cryptocurrency without your permission.

The private key can take many forms:

• 256-character binary code
• 64-digit hexadecimal code
• QR code
• Mnemonic phrase

Regardless of its form, the private key is a long string of characters and there is a good reason for it. While you can generate a public key from a private key, the reverse process is practically impossible due to the one-way trapdoor function. Therefore, it is very important to keep your private key secure because it is the only way to prove ownership of your cryptocurrency. You can attach any number of public keys to your private key, each generating a unique address that you can share with anyone who needs to send you cryptocurrency.

It is worth noting that while the private key is designed to be kept secret, it is not completely invulnerable. If someone gains access to your private key, they will have access to your cryptocurrency and be able to transfer it from your account. Therefore, it is important to store your private key in a secure place and not share it with anyone. One way to secure your private key is to use a hardware wallet that stores your private key offline, making it much more difficult for a hacker to access it. Another way is to use a secure password manager that encrypts your private key and other sensitive information.

Where to store your private key?
Like any password, it is important to keep your private key secure.

There are two main ways to store it:
- Online in a cryptocurrency wallet (so-called hot wallet): For most people, the best and easiest way to manage private keys is to use a cryptocurrency wallet, such as MetaMask. These wallets are stored on the internet and are therefore called "hot wallets." This makes buying, selling, or using digital tokens just as convenient and accessible as using a credit card online. If you choose this method of storage, it is important to choose a cryptocurrency wallet from a company with a long tradition in security and features.
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- Offline in a secure location (so-called cold storage): There is the option to store your private keys in a location not connected to the internet, such as a computer, written on pieces of paper, or even just memorized. This method is called "cold storage" and while it protects your private key from digital theft, using your cryptocurrencies is much less convenient and creates additional risks.